Materia Blues Inc. Is a company that manufactures and distributes books internationally. The company has proposed that the following comments be included in the companys 2020 annual report to the shareholders.

The integrity of the financial information reported by Materia Blues Inc. is the responsibility of the companys Controllers office, which records and reports all financial transactions. Fulfilling this responsibility requires the preparation of financial statements in accordance with IFRS.Materia Blues Inc. has established an excellent system of accounting and internal controls, used to gather and process financial data. Management believes that the role of the internal audit department is sufficient to ensure the high quality of the business practices and monitoring activities that are used to keep operations functioning smoothly at the company. For additional independence, the internal audit team report directly to the production manager who has no discretion and knowledge of the other areas of the company and therefore cannot influence the control effectiveness of the company.

Our public accounting firm is engaged to provide an independent opinion on our financial statements. Together with our audit committee, they provide high-quality oversight over the financial accounting processes at Materia Blues Inc. The audit committee has checked the audit report prepared by the auditors and believes that it is sound. After seeking specific advance consent from the CEO, the external auditors have had free and clear access to those designated in the audit committee, management and employees of the company during the conduct of their engagement.

Required: Describe two (2) of the incorrect assumptions that are implicit in the above comments. Provide in two paragraphs (no longer than one double-spaced page combined) your clear reasoning of the incorrectness of the assumptions