CBA Auditing Internal Controls 2

Question 1

Under the COSO framework, which component addresses the ongoing processes that monitor the quality of internal control performance over time?

Accepted Answer

Monitoring Activities

Answer

Control Activities

Answer

Risk Assessment

Answer

Information and Communication

Question 2

When auditing IT general controls, which area is MOST critical to assess first because weaknesses there can undermine all application controls?

Accepted Answer

Access controls and logical security

Answer

Change management controls

Answer

Data center physical security

Answer

Backup and recovery procedures

Question 3

A bank auditor discovers that loan officers can both approve loans AND record disbursements in the general ledger. This violates which key internal control principle?

Accepted Answer

Segregation of duties

Answer

Dual authorization

Answer

Management override prevention

Answer

Control environment integrity

Question 4

Which sampling method requires the auditor to select every nth item from a population, starting from a random point?

Accepted Answer

Systematic sampling

Answer

Stratified random sampling

Answer

Cluster sampling

Answer

Judgmental sampling

Question 5

In a bank's loan review process, which compensating control is MOST effective when full segregation of duties cannot be achieved in a small branch?

Accepted Answer

Enhanced supervisory review of transactions

Answer

Requiring dual signatures on all documents

Answer

Mandatory vacation policies for key personnel

Answer

Rotating staff assignments quarterly

Question 6

The term 'control deficiency' in bank auditing refers to a situation where:

Accepted Answer

A control does not allow timely prevention or detection of misstatements

Answer

Management disagrees with the auditor's findings

Answer

The bank fails to implement recommended audit findings

Answer

An internal auditor lacks sufficient training

Question 7

Which audit procedure is MOST appropriate for testing the operating effectiveness of an automated system access control?

Accepted Answer

Attempting to access the system with revoked credentials

Answer

Reviewing the access policy documentation

Answer

Interviewing the IT security officer

Answer

Inspecting the organizational chart