CCCP Risk Management & Internal Controls 2

Question 1

Which risk appetite framework component defines the maximum level of risk an organization is willing to accept before action is required?

Accepted Answer

Risk threshold

Answer

Risk threshold is the specific level at which a risk triggers mandatory escalation or corrective action.

Question 2

A company discovers that two employees in the accounts payable department have been colluding to approve fraudulent invoices. Which control failure does this best illustrate?

Accepted Answer

Breakdown in collusion-resistant controls

Answer

Collusion-resistant controls are specifically designed to prevent two or more employees from circumventing controls together, and their failure enables collaborative fraud.

Question 3

Under the COSO ERM framework, which component involves identifying events that may affect the organization's ability to achieve its objectives?

Accepted Answer

Event identification

Answer

Event identification is the COSO ERM component focused on recognizing potential internal and external events that could impact organizational objectives.

Question 4

A Chief Compliance Officer wants to quantify the financial impact of a data breach scenario. Which risk assessment technique is MOST appropriate?

Accepted Answer

Monte Carlo simulation

Answer

Monte Carlo simulation uses probability distributions to model a range of possible financial outcomes for uncertain events like data breaches.

Question 5

Which internal control principle requires that an employee who records a transaction should NOT also have custody of the related assets?

Accepted Answer

Segregation of duties

Answer

Segregation of duties separates the functions of record-keeping and asset custody to reduce the risk of fraud or error going undetected.

(CCCP) Certified Corporate Compliance Professional Practice Test

(CCCP) Certified Corporate Compliance Professional Practice Test

CCCP Risk Management & Internal Controls 2