FREE CA Audit & Risk Management Questions and Answers
What does the term 'materiality' refer to in auditing?
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Wrong!
Materiality in auditing refers to the significance of transactions, balances, or errors that could influence financial decisions.
What is the primary function of risk management in an organization?
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Wrong!
Risk management involves identifying, assessing, and mitigating risks to ensure organizational stability and success.
What is the primary objective of an external audit?
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The primary objective of an external audit is to ensure financial statements are accurate and comply with accounting standards.
Which internal control component focuses on the effectiveness of risk management strategies?
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The risk assessment component of internal control evaluates and addresses risks that may impact an organization’s objectives.
Which type of risk arises due to fluctuations in interest rates?
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Interest rate risk occurs when changes in interest rates impact an organization's financial position, particularly in borrowing and lending.
Which type of audit is conducted to evaluate compliance with laws and regulations?
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A compliance audit examines whether an organization is adhering to external laws, regulations, and policies.