GRC Internal Controls & Audit Processes 5

Question 1

What does 'inherent risk' represent in the audit risk model?

Accepted Answer

The susceptibility of an assertion to material misstatement before considering controls

Answer

Inherent risk is the natural susceptibility of an account or assertion to misstatement, independent of any internal controls.

Question 2

Which type of audit focuses on whether organizational activities conform to established policies and regulations?

Accepted Answer

Compliance audit

Answer

A compliance audit evaluates whether the organization adheres to applicable laws, regulations, and internal policies.

Question 3

IT General Controls (ITGCs) primarily address:

Accepted Answer

Pervasive controls over the IT environment that affect multiple systems

Answer

ITGCs are foundational controls over the IT environment—such as change management, access controls, and operations—that support application-level controls.

Question 4

Management's response to an audit finding typically includes:

Accepted Answer

Agreement or disagreement with the finding and a corrective action plan with a target date

Answer

Management responses address whether they concur with the finding and outline planned remediation steps and timelines.

Question 5

Which principle ensures that internal auditors are free from conditions that threaten their ability to carry out responsibilities objectively?

Accepted Answer

Independence and objectivity

Answer

Independence and objectivity are foundational to the IIA Standards, ensuring auditors can report findings without bias or conflict of interest.

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

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

GRC Internal Controls & Audit Processes 5