CRMA Planning Risk-Based Engagements 2

Question 1

When building a risk-based engagement plan, which method BEST prioritizes auditable entities?

Accepted Answer

Risk ranking by inherent risk and control effectiveness

Answer

Risk-based planning prioritizes entities by weighing inherent risk against the strength of existing controls.

Question 2

Which definition BEST describes inherent risk in the context of engagement planning?

Accepted Answer

Risk that exists before any mitigating controls are considered

Answer

Inherent risk is the level of risk present in a process before any controls are applied or considered.

Question 3

A risk-based engagement plan should be formally updated when:

Accepted Answer

A significant change in the organization's risk profile occurs

Answer

Material changes to the risk environment require corresponding updates to the engagement plan to keep it relevant.

Question 4

On a risk heat map used during engagement planning, what do the two primary axes represent?

Accepted Answer

Likelihood of occurrence and potential impact

Answer

Heat maps plot risks on a two-dimensional grid of likelihood and impact to visualize relative risk severity.

Question 5

When determining audit engagement frequency for a high-risk area, which factor is MOST critical?

Accepted Answer

Historical audit findings indicating recurring control weaknesses

Answer

Prior audit findings reveal patterns of control failure that directly inform how often a high-risk area requires audit attention.

(CRMA) Certification in Risk Management Assurance Practice Test