CIG Governance & Internal Controls 3

Question 1

Enterprise Risk Management (ERM) expands upon traditional internal control frameworks by additionally addressing:

Accepted Answer

Strategic and reputational risks across the entire organization

Answer

ERM takes a broader, entity-wide view that includes strategic and reputational risks, not just operational and financial controls addressed in traditional frameworks.

Question 2

An agency's audit committee that includes a majority of non-federal-employee members BEST supports which governance principle?

Accepted Answer

Independence of oversight

Answer

Having outside members on an audit committee strengthens independence, ensuring oversight is not compromised by internal management relationships.

Question 3

Under OMB Circular A-123, management's responsibility for internal control includes issuing an annual assurance statement that covers:

Accepted Answer

The effectiveness of internal controls over financial reporting and operations

Answer

OMB Circular A-123 requires agency heads to provide an annual assurance statement on the effectiveness of internal controls over both financial reporting and operations.

Question 4

A 'compensating control' is BEST described as:

Accepted Answer

An alternative control that mitigates risk when a primary control cannot be implemented

Answer

Compensating controls provide alternative risk mitigation when ideal controls (like separation of duties in small offices) are not feasible.

Question 5

Which scenario BEST illustrates the governance concept of 'tone at the top'?

Accepted Answer

The agency head publicly acknowledges and corrects an internal control failure identified by the IG

Answer

A leader publicly owning and addressing a control failure demonstrates the transparency and accountability that define a strong ethical tone from the top.

(CIG) Certified Inspector General Practice Test

(CIG) Certified Inspector General Practice Test

CIG Governance & Internal Controls 3