CGRC Governance Principles 3

Question 1

Which of the following best describes the concept of 'tone at the top' in governance?

Accepted Answer

Leadership's demonstrated commitment to ethical culture and compliance

Answer

'Tone at the top' refers to leadership's visible commitment to ethical conduct, which shapes organizational culture.

Question 2

Which COSO component addresses the policies and procedures that help ensure management directives are carried out?

Accepted Answer

Control Activities

Answer

Control Activities are the policies and procedures that help ensure management's risk responses are properly executed.

Question 3

A company's audit committee is composed entirely of executive directors. This arrangement violates which governance principle?

Accepted Answer

Independence

Answer

Audit committee members should be independent (non-executive) directors to provide objective oversight without conflicts of interest.

Question 4

Which governance mechanism is designed to prevent any single individual from having unchecked authority over critical processes?

Accepted Answer

Segregation of duties

Answer

Segregation of duties divides critical tasks among multiple individuals to prevent errors, fraud, and abuse of authority.

Question 5

In the CGRC context, 'governance' is best defined as:

Accepted Answer

The system of rules, practices, and processes by which an organization is directed and controlled

Answer

Governance is the system of rules, practices, and processes by which an organization is directed, controlled, and held accountable.

CGRC - Certified Governance Risk and Compliance Practice Test