CLO 2 Maximum Marks 10 Q1A:Assessing the risk of fraud in a financial statement audit is a difficult audit judgment. Auditing standards require the auditor to perform several audit procedures to accumulate information to assess the risk of fraud. You are the in-charge auditor responsible for planning the financial statement audit of Spencer, Inc. Two new staff auditors are assisting you with the initial audit planning and have asked you the following questions. (8 Marks). Required Briefly summarize your response to these staff auditor questions: a. What is the purpose of the audit team's brainstorming session (2 Marks)? b. Who should attend the brainstorming session and when should the session be held (2 Marks)? c. What is the role of the two staff auditors in the brainstorming session (2 Marks)? d. What is the auditor's responsibility under auditing standards for detecting fraud (2 Marks)? Answer: Q1B:During audit planning, an auditor obtained the following information (2 Marks): 1. The company's controller works very hard, including evenings and weekends, and has not taken a vacation in two years (1 Mark). 2. The company's board of directors includes a majority of directors who are independent of management (1 Mark). Required a. Indicate whether the information indicates increased risk for fraud. b. If the information indicates an increased risk of fraud, indicate which fraud condition (incentives/pressures, opportunities, attitudes/ rationalization, or NA) is indicated