CA Audit & Risk Management

Question 1

What is the primary objective of an external audit?

Accepted Answer

Ensure compliance with financial reporting standards

Answer

Increase company profits

Answer

Reduce tax liabilities

Answer

Eliminate internal fraud

Question 2

Which type of risk arises due to fluctuations in interest rates?

Accepted Answer

Interest Rate Risk

Answer

Operational Risk

Answer

Reputation Risk

Answer

Strategic Risk

Question 3

What does the term 'materiality' refer to in auditing?

Accepted Answer

The significance of financial misstatements

Answer

The total assets of a company

Answer

The overall company revenue

Answer

The number of employees in an organization

Question 4

Which internal control component focuses on the effectiveness of risk management strategies?

Accepted Answer

Risk Assessment

Answer

Monitoring Activities

Answer

Control Environment

Answer

Information & Communication

Question 5

Which type of audit is conducted to evaluate compliance with laws and regulations?

Accepted Answer

Compliance Audit

Answer

Operational Audit

Answer

Financial Audit

Answer

Forensic Audit

Question 6

What is the primary function of risk management in an organization?

Accepted Answer

Identify, assess, and mitigate risks

Answer

Eliminate all business risks

Answer

Increase short-term profits

Answer

Reduce employee workload