Internal Auditing & Control Systems Flashcards
7 cards from real CCB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Internal Auditing & Control Systems flashcards as text
A company requires two senior managers to approve wire transfers over $500,000. This is an example of:
Answer: Dual control
Dual control (also called dual authorization) requires two authorized individuals to approve a single transaction, reducing the risk of unauthorized transfers.
In an IT environment, which control ensures that only authorized users can access sensitive financial data?
Answer: User access management controls
User access management controls, including role-based access and periodic access reviews, ensure that only authorized individuals can view or modify sensitive data.
The 'tone at the top' concept is MOST directly associated with which element of a strong control environment?
Answer: Management's commitment to integrity and ethical values
Tone at the top refers to senior leadership's visible commitment to ethics and compliance, which sets the behavioral standard for the entire organization.
Which internal audit technique compares financial ratios and trends over time to identify unusual fluctuations?
Answer: Analytical procedures
Analytical procedures involve evaluating financial information through analysis of relationships and trends, helping auditors identify areas requiring further investigation.
An organization's internal audit charter should PRIMARILY:
Answer: Define the purpose, authority, and responsibility of the internal audit function
The internal audit charter is a formal document approved by the board that defines the function's purpose, authority, scope, and reporting relationships.
Which of the following BEST describes a compensating control?
Answer: An alternative control that mitigates risk when an ideal control is not feasible
Compensating controls provide alternative risk mitigation when primary controls cannot be implemented, such as enhanced monitoring when segregation of duties is not practical in a small business.
During an audit, the auditor discovers that account reconciliations have not been completed for three months. This is MOST likely a failure of:
Answer: Monitoring controls
Monitoring controls include regular reconciliations, reviews, and supervisory checks; failure to perform them indicates a breakdown in the monitoring component of COSO.