CCS Internal Controls & Auditing 2

Question 1

Which COSO component addresses the organization's values, ethics, and commitment to competence?

Accepted Answer

Control Environment

Answer

The Control Environment is the foundation of COSO's Internal Control framework and sets the tone at the top regarding ethics, integrity, and competence.

Question 2

A compliance officer discovers that a control designed to prevent duplicate payments has a 15% failure rate. What should be the FIRST step?

Accepted Answer

Perform a root cause analysis

Answer

Root cause analysis should precede corrective action to ensure the remediation addresses the actual source of the control failure.

Question 3

Under the Sarbanes-Oxley Act 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 effectiveness of internal controls over financial reporting as part of the annual report.

Question 4

Which type of audit evidence is generally considered MOST reliable?

Accepted Answer

Documents obtained directly from independent third parties

Answer

Evidence obtained directly from independent third parties is most reliable because it is least susceptible to management influence or manipulation.

Question 5

In the context of internal auditing, 'inherent risk' refers to:

Accepted Answer

Risk existing before any controls are applied

Answer

Inherent risk is the susceptibility of an assertion or process to material error before considering any related controls.

(CCS) Certified Compliance Specialist Practice Test

(CCS) Certified Compliance Specialist Practice Test

CCS Internal Controls & Auditing 2