CRA Risk Mitigation and Controls 2

Question 1

A company implements dual authorization for all transactions above $50,000. This control is best classified as which type?

Accepted Answer

Preventive control

Answer

Dual authorization prevents unauthorized transactions from occurring by requiring two approvals before execution, making it a preventive control.

Question 2

Which risk treatment option involves purchasing insurance against potential losses?

Accepted Answer

Risk transfer

Answer

Insurance transfers the financial consequence of a risk to a third party (the insurer), making it a classic risk transfer mechanism.

Question 3

An organization discovers its residual risk exceeds its risk appetite after implementing controls. What should happen next?

Accepted Answer

Implement additional or stronger controls

Answer

When residual risk exceeds risk appetite, additional or enhanced controls must be implemented to bring the risk within acceptable thresholds.

Question 4

The COSO framework's control activities component includes which of the following?

Accepted Answer

Physical controls and IT general controls

Answer

COSO's control activities encompass both physical controls (locks, access badges) and IT general controls (access management, change control) that help ensure risk responses are carried out.

Question 5

A risk architect recommends segregation of duties (SoD) for a financial process. What risk does SoD primarily mitigate?

Accepted Answer

Fraud and error through collusion or mistake

Answer

Segregation of duties mitigates fraud and error by ensuring no single individual controls all aspects of a critical transaction.

(CRA) Certified Risk Architect Practice Test

(CRA) Certified Risk Architect Practice Test

CRA Risk Mitigation and Controls 2