CCM Risk and Internal Controls 1

Question 1

What is the primary purpose of internal controls?

Accepted Answer

To prevent fraud and ensure compliance

Answer

To boost revenue quickly

Answer

To reduce taxes

Answer

To ensure operational efficiency

Question 2

Which component is part of the COSO framework for internal control?

Accepted Answer

Control environment

Answer

Financial forecasting

Answer

Market analysis

Answer

Revenue planning

Question 3

Why is segregation of duties a critical internal control?

Accepted Answer

It helps prevent fraud and errors

Answer

It eliminates the need for audits

Answer

It increases employee workload

Answer

It reduces management authority

Question 4

Which activity is considered a risk mitigation strategy?

Accepted Answer

Transferring risk through insurance

Answer

Ignoring low-probability events

Answer

Postponing action plans

Answer

Increasing project budgets

Question 5

Which type of control is used to detect errors or irregularities after they occur?

Accepted Answer

Detective controls

Answer

Preventive controls

Answer

Corrective controls

Answer

Directive controls

Question 6

What is the role of a risk register in compliance management?

Accepted Answer

Document and track organizational risks

Answer

Track employee productivity

Answer

List financial goals

Answer

Serve as a legal document for mergers