GRC Internal Controls and Auditing 4

Question 1

Which element of the COSO Internal Control Framework addresses the organization's commitment to integrity and ethical values?

Accepted Answer

Control Environment

Answer

The Control Environment is the foundation of COSO and encompasses the tone at the top, ethical values, and organizational culture.

Question 2

What is 'residual risk' in the context of internal controls?

Accepted Answer

Risk remaining after controls have been applied

Answer

Residual risk is the level of risk that remains after management has implemented controls to reduce inherent risk.

Question 3

An internal auditor is reviewing access logs and finds that a privileged user accessed sensitive files outside of business hours. This is an example of what type of testing?

Accepted Answer

Computer-assisted audit technique (CAAT)

Answer

CAATs use automated tools to analyze electronic data, such as log files, to identify anomalies and test controls.

Question 4

Which of the following BEST describes a 'material weakness' in internal controls?

Accepted Answer

A control deficiency where there is a reasonable possibility of material financial misstatement

Answer

A material weakness is the most severe level of deficiency, indicating a significant risk that financial statements could be materially misstated.

Question 5

Job rotation as an internal control is PRIMARILY designed to:

Accepted Answer

Detect and deter fraud by reducing opportunity for concealment

Answer

Rotating employees through different roles limits the time any individual has to commit and conceal fraud.

(GRC) Governance, Risk, and Compliance Certification Practice Test

(GRC) Governance, Risk, and Compliance Certification Practice Test

GRC Internal Controls and Auditing 4