CIG Governance & Internal Controls 4

Question 1

Which element of the COSO framework specifically involves identifying and analyzing risks that may prevent an organization from achieving its objectives?

Accepted Answer

Risk Assessment

Answer

Risk Assessment is the COSO component that requires management to identify and analyze risks that could impede achievement of organizational objectives.

Question 2

A federal IG determines that an agency's financial management system lacks adequate audit trails for transactions. This MOST directly affects which internal control objective?

Accepted Answer

Reliability of financial reporting

Answer

Audit trails are essential for tracing transactions and verifying accuracy, directly supporting the reliability of financial reporting.

Question 3

In governance frameworks, 'three lines of defense' refers to which arrangement?

Accepted Answer

Operational management, risk/compliance functions, and internal audit

Answer

The three lines of defense model positions operational management as first line, risk and compliance functions as second, and internal audit as the third independent line.

Question 4

An agency implements continuous monitoring of its financial transactions using automated data analytics. This BEST represents which type of control activity?

Accepted Answer

Detective control

Answer

Continuous monitoring detects anomalies and errors after transactions occur, classifying it as a detective control activity.

Question 5

According to GAO Government Auditing Standards, when auditors identify internal control deficiencies during a performance audit, they are required to:

Accepted Answer

Report significant deficiencies found during the audit

Answer

GAGAS requires auditors to report significant deficiencies in internal control identified during a performance audit in their audit report.

(CIG) Certified Inspector General Practice Test

(CIG) Certified Inspector General Practice Test

CIG Governance & Internal Controls 4