Multiple Choice 6. Which of the following parties are involved in preparing and auditing financial statements? a. Management b. Audit committee. c. Internal audit function. d. External auditor. e. All of the above. 7. The quality of an organization's internal controls affects which of the following? a. Reliability of financial data. b. Ability of management to make good decisions. c. Ability of the organization to remain in business. d. Approach used by the auditor in auditing the financial statements. e. All of the above. 8. Who sets the rules of Corporate Governance globally? a. World Bank b. Organization for Economic Co-operation and Development (OECD) c. International Monetary Fund (IMF) d. Asian Development Bank 9. The total risk of material misstatement can be split into which of the two components. a. Financial Risk and Compliance risk b. Business Risk and Audit Risk c. Detection risk and Business Risk d. Financial risk and Audit Risk 10. Audit sampling means: a. selecting a sample population on the basis of the auditor's judgment of what is desirable b. drawing conclusions about an entire set of data by testing a representative sample of items c. The required cumulative addition of the population for the purposes of drawing the sample d. Individually material items are automatically selected for sampling