RCC Risk Management and Internal Controls 3

Question 1

Under the COSO ERM framework, which component directly addresses the organization's culture, values, and ethical behavior?

Accepted Answer

Governance and Culture

Answer

The Governance and Culture component of COSO ERM sets the tone for risk management, embedding ethical values and behaviors throughout the organization.

Question 2

A detective control would be MOST useful in which scenario?

Accepted Answer

Reconciling bank statements to general ledger entries monthly

Answer

Monthly bank reconciliations detect discrepancies after transactions have occurred, making them a classic detective control.

Question 3

Which of the following is an example of a key risk indicator (KRI)?

Accepted Answer

The rate of employee turnover in the compliance department

Answer

High compliance department turnover is a leading indicator that may signal future control breakdowns, making it a KRI.

Question 4

A compliance officer at a bank is asked to assess the risk of money laundering through wire transfers. Which approach is most appropriate?

Accepted Answer

Apply a risk-based approach analyzing transaction volume, geography, and customer type

Answer

A risk-based approach tailors AML controls to the actual risk profile of transactions, customers, and geographies rather than applying blanket measures.

Question 5

The purpose of a control self-assessment (CSA) program is to:

Accepted Answer

Enable management and staff to evaluate the effectiveness of controls in their own areas

Answer

CSA programs empower business unit personnel to assess control design and operating effectiveness, fostering risk ownership at the operational level.

(RCC) Regulatory Compliance Certification Practice Test

(RCC) Regulatory Compliance Certification Practice Test

RCC Risk Management and Internal Controls 3