Question 1

In response to a risk identified during a fraud risk assessment, management decides to purchase fidelity insurance to help protect the company against the associated risk of loss. This response is known as:

Options :

A : Assuming the risk

B : Mitigating the risk

C : Avoiding the risk

D : Transferring the risk

Answer: D

Question 2

Before buying a capital asset, an organisation should weigh the costs and benefits of the asset. What factors are included in this analysis? Select TWO that apply.

Options :

A : The cumulative cash flows generated by the asset

B : Current liabilities in the balance sheet

C : The cost of the asset

D : Dividends paid

E : Shareholders' equity

Answer: A,C

Question 3

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) defines____________ as

"a process, effected by an entity's board of directors, management, andother personnel, designed to provide

reasonable assurance regarding the achievement of objectives relating to operations, reporting, and

compliance."

Options :

A : Corporate compliance

B : Fraud risk management

C : Risk assessment

D : Internal control

Answer: D

Question 4

Which of the following is TRUE regarding the internal audit function's reporting responsibilities pertaining to fraud?

Options :

A :

The internal audit function should discuss how and when to report fraud-related issues with senior management and the board of directors before such issues arise.

B :

The internal audit function is permitted, but not required, to periodically report about the organization's fraud risks to senior management and the board of directors.

C :

The internal audit function should not disclose the results of its fraud audits to senior management or the board of directors in order to maintain independence

D :

The internal audit function is not permitted to communicate with the board of directors about fraud, as that is the responsibility of external auditors.

Answer: A

Question 5

Which of the following Is TRUE regarding an organization's ethics program?

Options :

A :

To be most effective, access to the organization's ethics policy should be restricted to employees and other Internal parties only

B :

In designing the ethics program, management should consider whether the organization currently has any ethical leadership Issues

C :

An effective written ethics policy alone is sufficient to communicate management's ethical philosophy and serve as a comprehensive ethics program

D : All of the above

Answer: B

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