CCA Internal Controls & Risk Management 2

Question 1

Which COSO framework component addresses how an organization communicates information necessary for employees to carry out their internal control responsibilities?

Accepted Answer

Information & Communication

Answer

The Information & Communication component ensures relevant information is identified, captured, and communicated in a timely manner to support internal control.

Question 2

A company discovers that a single employee can both approve purchase orders and authorize payments. This represents a failure in which internal control principle?

Accepted Answer

Segregation of duties

Answer

Segregation of duties requires that no single employee controls all phases of a transaction to reduce fraud and error risk.

Question 3

Under the ERM framework, 'residual risk' is best defined as:

Accepted Answer

Risk remaining after management has applied controls

Answer

Residual risk is the level of risk that remains after management implements risk responses and controls.

Question 4

Which internal control technique involves comparing recorded amounts with independently determined amounts such as bank statements?

Accepted Answer

Reconciliation

Answer

Reconciliation is the process of comparing two sets of records to ensure they are consistent and accurate.

Question 5

A company's board audit committee is primarily responsible for:

Accepted Answer

Overseeing financial reporting and internal audit functions

Answer

The audit committee oversees financial reporting integrity, internal audit activities, and compliance with regulatory requirements.

(CCA) Certified Corporate Accountant Practice Test

(CCA) Certified Corporate Accountant Practice Test

CCA Internal Controls & Risk Management 2