CBA Risk Management Auditing 3

Question 1

Which audit procedure best tests the effectiveness of a bank's third-party risk management program?

Accepted Answer

Testing whether ongoing monitoring activities are performed and documented for critical vendors

Answer

Effectiveness of third-party risk management is demonstrated through ongoing monitoring of critical vendors, not just initial onboarding.

Question 2

A bank's fraud risk assessment identifies wire transfer origination as high-risk. Which control is most effective at mitigating this risk?

Accepted Answer

Requiring dual authorization and call-back verification for large wire transfers

Answer

Dual authorization combined with out-of-band call-back verification is the most effective preventive control against fraudulent wire transfers.

Question 3

When auditing interest rate risk in the banking book (IRRBB), what does an EVE (Economic Value of Equity) measure capture?

Accepted Answer

The present value impact of rate shocks on the bank's entire balance sheet

Answer

EVE measures the change in the economic value of all assets, liabilities, and off-balance-sheet items in response to interest rate shocks.

Question 4

An auditor discovers that the risk management function reports to the CFO. Under best practices, what concern should be raised?

Accepted Answer

Risk management reporting to the CFO impairs its independence from business line influence

Answer

Best practice and regulatory guidance call for the Chief Risk Officer to report independently to the CEO or board, not through a business-oriented function like the CFO.

Question 5

Which of the following is an example of a key risk indicator (KRI) for cybersecurity risk?

Accepted Answer

Percentage of systems with overdue critical patch deployments

Answer

The percentage of systems with unpatched critical vulnerabilities is a forward-looking KRI that signals elevated cyber risk before an incident occurs.

(CBA) Certified Bank Auditor Practice Test

(CBA) Certified Bank Auditor Practice Test

CBA Risk Management Auditing 3