CrFA Internal Controls & Risk Assessment 2

Question 1

Under the COSO 2013 Internal Control–Integrated Framework, how many principles support the five components of internal control?

Accepted Answer

17

Answer

COSO 2013 sets out 17 principles spread across the five components of internal control.

Question 2

Which COSO principle specifically requires management to consider the potential for fraud when assessing risks?

Accepted Answer

Principle 8

Answer

Principle 8 requires the organization to consider the potential for fraud when it assesses risks to its objectives.

Question 3

A forensic accountant finds that one employee can create vendors, approve invoices, and release payments. Which control weakness does this most directly show?

Accepted Answer

Lack of segregation of duties

Answer

Letting one person authorize, record, and keep custody over a transaction cycle breaks segregation of duties.

Question 4

Which type of control is a monthly bank reconciliation done by someone independent of cash receipts?

Accepted Answer

Detective control

Answer

Bank reconciliations find errors or irregularities after the transactions have happened, which makes them detective controls.

Question 5

Inherent risk is best defined as the susceptibility of an assertion to material misstatement:

Accepted Answer

Before considering any related controls

Answer

Inherent risk is the risk of misstatement before any internal controls are considered.

CrFA - Certified Forensic Accountant Practice Test

CrFA - Certified Forensic Accountant Practice Test

CrFA Internal Controls & Risk Assessment 2