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Management override of controls is, per SA 240:
AA presumed risk that the auditor must address in every audit
BNot a fraud risk
COnly relevant for listed companies
DAddressed only if internal audit raises it
Answer & Solution
Correct answer: B. Not a fraud risk
1. SA 240.32 presumes management override as a fraud risk in every audit.
2. Required procedures include unpredictable testing, journal-entry testing, and review of accounting estimates for bias.
3. It is not contingent on listing or internal audit.
_Source: ICAI BoS CA Final Paper 3, Ch 3 "Risk Assessment and Internal Control"_
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