CCA Internal Controls & Risk Management 1

Question 1

What is the main purpose of internal controls in a corporation?

Accepted Answer

To ensure accurate and compliant operations

Answer

Internal controls safeguard assets, ensure reliable financial reporting, and promote compliance with laws and policies.

Question 2

Which is an example of a preventive control?

Accepted Answer

Approval requirements for purchases

Answer

Preventive controls are designed to stop errors or irregularities before they occur, like requiring approvals for transactions.

Question 3

What is risk assessment in financial management?

Accepted Answer

Analyzing threats to financial goals

Answer

Risk assessment involves identifying, analyzing, and prioritizing risks that could affect the achievement of objectives.

Question 4

Which of the following is a component of the COSO internal control framework?

Accepted Answer

Monitoring activities

Answer

Monitoring activities are part of the COSO framework, helping ensure controls continue to operate effectively over time.

Question 5

Why is segregation of duties important in accounting?

Accepted Answer

It helps prevent fraud and error

Answer

Segregation of duties reduces the risk of error or fraud by ensuring that no single individual has control over all parts of a transaction.

(CCA) Certified Corporate Accountant Practice Test