Auditing complex company structures

What is the main risk if a shareholder has over 50 percent company ownership?

There is an increased risk of manager opportunism

The controlling owner faces little scrutiny

There is more chance of shareholder conflict

Audits are more expensive

What is the main risk if no shareholder has over 50 percent company ownership?

There is more chance of shareholder conflict

All of these

There is an increased risk of manager opportunism

There is increased management scrutiny from small blockholders

Which of the following countries uses a concentrated ownership model?

France

Germany

Switzerland

All of these

Under the stakeholder model, where does the demand for external assurance come from?

Individual shareholders

Managers

Both major blockholders and individual shareholders

Major blockholders

Under the shareholder model, in what way is external auditing beneficial?

It provides reassurance to interested parties outside the company

All of these

It addresses conflicts between investors

It addresses conflicts between managers and investors

Which type of investor typically has a share of between 5 percent and 10 percent?

Institutional investors

All of these

Governments

Family shareholders

Which of the following statements is correct? Statement 1, under the stakeholder model, audit fees reflect lower litigation risk, or statement 2, under the stakeholder model, audit fees are more focused on business risk

Statement 1

Both statements

Neither statement

Statement 2

Under what circumstances might audit fees increase?

When a new shareholder joins the board

When a shareholder decides to sell their shares

When a government shareholder joins the board

When a shareholder starts creating a significant stake in a company

Which of the following statements is correct? Statement 1, audit fees fall when private channels are sufficient for sharing information, or statement 2, audit fees fall when controlling owners are looking to minimise costs

Both statements

Statement 2

Statement 1

Neither statement

Which of the following statements is correct? Statement 1, concentrated ownership reduces the need for public reporting, or statement 2, under the stakeholder model, smaller blockholders have more access to private information channels

Statement 2

Statement 1

Both statements

Neither statement

Auditing complex company structures

What is the main risk if a shareholder has over 50 percent company ownership?

What is the main risk if no shareholder has over 50 percent company ownership?

Which of the following countries uses a concentrated ownership model?

Under the stakeholder model, where does the demand for external assurance come from?

Under the shareholder model, in what way is external auditing beneficial?

Which type of investor typically has a share of between 5 percent and 10 percent?

Which of the following statements is correct? Statement 1, under the stakeholder model, audit fees reflect lower litigation risk, or statement 2, under the stakeholder model, audit fees are more focused on business risk

Under what circumstances might audit fees increase?

Which of the following statements is correct? Statement 1, audit fees fall when private channels are sufficient for sharing information, or statement 2, audit fees fall when controlling owners are looking to minimise costs

Which of the following statements is correct? Statement 1, concentrated ownership reduces the need for public reporting, or statement 2, under the stakeholder model, smaller blockholders have more access to private information channels

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