Question 1

Which of the following is included in the G20/OECD Principles of Corporate Governance?

Options :

A :

A requirement for corporations to establish a legal, regulatory, and institutional framework to support good governance practices

B : A call to support the equal treatment of all members of an organization's governing body

C : Guidance regarding appropriate board structures, responsibilities, and procedures

D :

An examination of the importance of effectively designed and implemented internal control mechanisms within an organization

Answer: C

Question 2

Which of the following Is NOT Included In Ihe five fraud risk management principles described In Fraud Risk Management Guide, a joint publication by COSO and the ACFE?

Options :

A : Communicating the expectations of those governing the fraud risk management program

B : Performing comprehensive fraud risk assessments to identify specific fraud schemes

C : Deploying preventive and detective fraud control activities to mitigate fraud risk

D : Developing one-time evaluations for each fraud risk management principle

Answer: D

Question 3

Effectively documenting and communicating organizational hierarchies, including the proper flow of information, can be a helpful tool in preventing fraud

Options :

A : True

B : False

Answer: A

Question 4

Which of the following best defines ‘exponential moving average’?

Options :

A :

A process by which the reorder of an item is triggered by the inventory level dropping to a predetermined level

B :

A forecasting technique where the average is calculated by dividing the sum of the values by the number of values

C : A forecasting technique where each demand is multiplied by a weighting factor

D :

A process by which a decision is taken at a period end or review point to determine how much to reorder

Answer: C

Question 5

During an external audit, the audit team identifies evidence that management has intentionally omitted some expenses from the company's financial statements in order to conceal an asset misappropriation scheme. However, the amount of the resulting misstatement does not meet the quantitative materiality threshold for the audit. Which of the following is TRUE regarding this situation?

Options :

A :

The auditors should assume that all audit evidence collected previously is unreliable and withdraw from the audit engagement

B :

The auditors should assess the need to adjust the nature, timing, and extent of remaining audit procedures based on this evidence.

C :

The auditors can ignore the misstatement because the omitted amount is less than the quantitative materiality threshold and therefore immaterial to the audit.

D :

The auditors do not need to be concerned with this evidence, as asset misappropriation schemes are not considered relevant or material for external audit purposes.

Answer: B

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