ERAC Audit Procedures & Risk Mitigation

Question 1

What is the primary goal of an audit in energy risk management?

Accepted Answer

To evaluate controls and risks

Answer

To increase energy consumption

Answer

To ignore compliance issues

Answer

To maximize profits only

Question 2

Which step involves verifying accuracy of financial records during an audit?

Accepted Answer

Testing and verification

Answer

Planning the audit

Answer

Reporting findings

Answer

Risk assessment

Question 3

What type of risk is most effectively mitigated through audit procedures?

Accepted Answer

Operational risk

Answer

Market risk

Answer

Credit risk

Answer

Liquidity risk

Question 4

Why is documentation important during an audit?

Accepted Answer

To provide evidence of audit activities

Answer

To confuse clients

Answer

To increase paperwork unnecessarily

Answer

To hide audit findings

Question 5

What is a key benefit of risk mitigation strategies?

Accepted Answer

Reduce negative impacts

Answer

Increase risk exposure

Answer

Ignore potential risks

Answer

Delay corrective actions

Question 6

Which of the following is an example of a control activity in risk mitigation?

Accepted Answer

Segregation of duties

Answer

Ignoring risk assessments

Answer

Allowing single-person control

Answer

Skipping internal controls

Question 7

What is the role of follow-up audits?

Accepted Answer

To verify corrective actions

Answer

To ignore previous findings

Answer

To create new risks

Answer

To reduce audit frequency

Question 8

Which of these best describes risk assessment?

Accepted Answer

Identifying and evaluating risks

Answer

Ignoring potential hazards

Answer

Increasing risk exposure

Answer

Delaying audits

Question 9

Why is communication important during audit procedures?

Accepted Answer

To ensure understanding of findings

Answer

To confuse stakeholders

Answer

To hide audit results

Answer

To avoid corrective action