Audit and Risk Management Quiz

Audit charter includes all the following except:

• The mission, purpose, and objective of the audit function

• The responsibilities of management

• The responsibilities of internal auditors

• The scope of the audit project

Depending on how the risk can be calculated/measured, two types of risk can be distinguished. What are the two types?

• Inherent, residual

• Gross, net

• Qualitative, quantitative

High risk is identified when:

• A process issue may result in damage to the reputation of the organization that will take more than six months to recover.

• A process issue may result in damage to the reputation of the organization that will take less than six months but more than three months to recover.

• A process issue may result in damage to the reputation of the organization that will take less than three months to recover.

What is not a characteristic of type of control?

• Automated

• Manual

• Written

• Combined

What is the primary purpose of corrective control?

• Prevent the occurrence

• Detect as well as correct the error

• Detect the error

• Act as deterrence to prevent error

The assessment of countermeasures should be based on the following:

• The cost of the control compared to the benefit of minimizing the risk

• Management's risk appetite (i.e., the level of residual risk that management is prepared to accept)

• Preferred risk-reduction methods

• All the above

The involvement of a third party is an example of what type of risk response?

• Risk mitigation

• Risk transfer

• Risk avoidance

• Risk acceptance

Choose the correct chain of audit project management basic steps:

• Plan → build → execute → monitor

• Plan → execute → develop → close

• Plan → execute → build → monitor

• Plan → develop → execute → close

What can be considered as the bridge or interface between the audit objectives and the final deliverables?

• Audit charter

• Work paper

• Executive report

• SLA

Substantive testing is used when:

• Controls are not in place

• Compliance testing failed

• Test of details is required

• All of above