GRC Internal Controls and Auditing 5

Question 1

What is the PRIMARY objective of an internal audit function according to the IIA Standards?

Accepted Answer

Add value and improve the organization's operations through assurance and consulting

Answer

The IIA defines internal audit's mission as enhancing and protecting organizational value through risk-based assurance, advice, and insight.

Question 2

When an auditor evaluates whether controls would have prevented or detected a known fraud scheme, this is an example of:

Accepted Answer

Fraud risk assessment

Answer

Fraud risk assessment involves identifying fraud schemes and evaluating whether existing controls adequately prevent or detect them.

Question 3

Which concept requires that no single individual should be able to initiate, authorize, record, AND reconcile a transaction?

Accepted Answer

Segregation of duties

Answer

Segregation of duties ensures that incompatible functions are divided across multiple people to reduce risk of error or fraud.

Question 4

A 'control deficiency' exists when:

Accepted Answer

A control is missing or not operating effectively enough to prevent or detect misstatements

Answer

A control deficiency occurs when the design or operation of a control does not allow management to prevent or detect misstatements on a timely basis.

Question 5

What is the purpose of an audit committee in relation to internal controls?

Accepted Answer

Provide independent oversight of financial reporting and internal audit function

Answer

The audit committee, composed of independent directors, oversees financial reporting integrity and serves as a liaison with internal and external auditors.

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

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

GRC Internal Controls and Auditing 5