Compliance and Auditing Internal Controls 2

Question 1

What is an 'IT general control' (ITGC) in the context of SOX compliance?

Accepted Answer

Controls that apply broadly across IT systems to ensure overall IT integrity

Answer

IT General Controls (ITGCs) are controls that apply to all IT systems and infrastructure and are foundational to supporting the reliability of application controls and financial reporting.

Question 2

What is the purpose of a 'management review control' in financial reporting?

Accepted Answer

To provide oversight through management's review and approval of financial results and reports

Answer

Management review controls involve senior management reviewing and approving financial information to detect and correct material misstatements before reports are finalized.

Question 3

Which principle requires that all financial transactions be supported by adequate documentation?

Accepted Answer

Documented evidence

Answer

The documented evidence principle requires that every financial transaction have adequate supporting documentation to provide a verifiable record of what occurred and why.

Question 4

What is a 'user access review' (UAR) in IT compliance?

Accepted Answer

A periodic review of user accounts and access rights to ensure they remain appropriate

Answer

A User Access Review is a periodic process where managers confirm that employees' system access rights are appropriate for their current job roles and that terminated employees' access has been revoked.

Question 5

What does 'dual control' mean in banking and financial compliance?

Accepted Answer

Requiring two authorized individuals to complete a critical transaction

Answer

Dual control (also called two-man rule or dual custody) requires two authorized individuals to be present and participate simultaneously in completing a sensitive or high-value transaction.

Compliance and Auditing Practice Test

Compliance and Auditing Practice Test

Compliance and Auditing Internal Controls 2