CGAP Risk-Control Frameworks 3

Question 1

ISO 31000:2018 describes risk management as creating and protecting value. Which core principle most directly supports this by requiring risk management to be integrated into all organizational activities?

Accepted Answer

Integrated

Answer

ISO 31000 Principle 3 (Integrated) requires that risk management be part of all organizational activities, not a standalone function.

Question 2

In OMB Circular A-123, what is the primary purpose of management's assessment of internal control over financial reporting (ICFR)?

Accepted Answer

To provide reasonable assurance that financial reporting is reliable and assets are safeguarded

Answer

OMB Circular A-123 requires agencies to assess ICFR to provide reasonable assurance of reliable financial reporting and proper stewardship of public assets.

Question 3

A CGAP candidate reviews a county's control environment. Which factor is LEAST indicative of a strong control environment?

Accepted Answer

Reliance on detective controls only, with no preventive controls

Answer

Relying exclusively on detective controls without preventive controls indicates a weak control environment because problems are only caught after they occur.

Question 4

Which risk treatment option involves transferring risk exposure to a third party, such as through insurance or outsourcing?

Accepted Answer

Risk sharing

Answer

Risk sharing (also called risk transfer) moves some or all of the financial impact of a risk to another party, such as an insurer or outsourced service provider.

Question 5

When applying the COSO Internal Control–Integrated Framework to a government entity, which component directly addresses the policies and procedures that help ensure management directives are carried out?

Accepted Answer

Control Activities

Answer

Control Activities are the specific policies and procedures (approvals, authorizations, reconciliations, etc.) that ensure management directives are executed and risks are mitigated.

CGAP - Certified Government Auditing Professional Practice Test

CGAP - Certified Government Auditing Professional Practice Test

CGAP Risk-Control Frameworks 3