CCB Internal Auditing & Control Systems 5

Question 1

Which sampling method gives every item in the population an equal chance of being selected?

Accepted Answer

Random sampling

Answer

Random sampling (also called probability sampling) ensures every item has an equal and known chance of selection, supporting statistically valid conclusions.

Question 2

A 'control gap' is BEST described as:

Accepted Answer

A situation where no control exists or existing controls are insufficient to mitigate a risk

Answer

A control gap exists when the level of risk is not adequately addressed by existing controls, leaving the organization exposed to potential losses or misstatements.

Question 3

Under Sarbanes-Oxley Section 404, management is required to:

Accepted Answer

Assess and report on the effectiveness of internal controls over financial reporting

Answer

SOX Section 404 requires management to assess and report on the design and operating effectiveness of internal controls over financial reporting, with external auditor attestation.

Question 4

Which type of audit evidence is generally considered MOST reliable?

Accepted Answer

External documents obtained directly from third parties

Answer

Evidence obtained directly from independent external sources (e.g., bank confirmations, attorney letters) is more reliable than internally generated documents.

Question 5

The purpose of an exit conference at the end of an internal audit is to:

Accepted Answer

Discuss findings and recommendations with management before the report is issued

Answer

The exit conference allows auditors to review draft findings with management, verify factual accuracy, and obtain preliminary management responses before the final report.

(CCB) Certified Compliance and Business Specialist Practice Test

(CCB) Certified Compliance and Business Specialist Practice Test

CCB Internal Auditing & Control Systems 5