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Significant business risks identified by the entity's ERM that the auditor should consider:
AMay indicate risks of material misstatement requiring audit attention
BAre irrelevant to the financial statement audit
CReplace SA 315 risk identification
DAre only relevant for advisory services
Answer & Solution
Correct answer: B. Are irrelevant to the financial statement audit
1. Entity's own ERM-identified risks often overlap with RoMM under SA 315.A41.
2. The auditor uses them as input but performs independent risk identification.
3. They supplement, not replace, the auditor's assessment.
_Source: ICAI BoS CA Final Paper 3, Ch 2 "Audit Planning Strategy and Execution"_
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