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

Monitoring Activities is the COSO component focused on evaluating whether controls are present and functioning effectively on an ongoing basis.

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

Access controls and logical security are foundational IT general controls; compromised access can invalidate the effectiveness of all other controls.

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

Segregation of duties requires that authorization, custody, and recording functions be performed by different individuals to prevent fraud and error.

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

Systematic sampling selects items at uniform intervals (every nth item) after a random start, making it efficient for large populations.

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

Enhanced supervisory review compensates for lack of segregation by having a manager independently review and approve transactions processed by the same employee.

(CBA) Certified Bank Auditor Practice Test

(CBA) Certified Bank Auditor Practice Test

CBA Auditing Internal Controls 2