Practice Test Geeks(CRA) Certified Risk Analyst Practice Test
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Regulatory Compliance & Corporate Governance Flashcards

7 cards from real CRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Under the Sarbanes-Oxley Act, which section specifically requires CEOs and CFOs to certify the accuracy of financial reports?

    Answer: Section 302

    Section 302 of SOX requires principal executives to personally certify quarterly and annual financial reports filed with the SEC.

  2. The 'three lines of defense' model assigns risk management functions to business units, risk/compliance functions, and which third line?

    Answer: Internal audit

    Internal audit serves as the third line of defense, providing independent assurance that the first and second lines are functioning effectively.

  3. Which regulatory framework is primarily used by U.S. publicly traded companies to evaluate internal controls over financial reporting?

    Answer: COSO Internal Control — Integrated Framework

    The COSO Internal Control — Integrated Framework is the standard most widely used for evaluating ICFR under SOX Section 404 requirements.

  4. A company's audit committee is best described as a committee of the:

    Answer: Board of directors

    The audit committee is a subcommittee of the board of directors responsible for overseeing financial reporting and the external audit process.

  5. Which principle of corporate governance requires that boards consist of a sufficient number of independent directors to avoid conflicts of interest?

    Answer: Independence

    Independence is a core governance principle ensuring directors can exercise objective judgment free from conflicts of interest.

  6. Under Dodd-Frank, which newly created agency oversees systemic risk in the U.S. financial system and monitors threats to financial stability?

    Answer: Financial Stability Oversight Council (FSOC)

    FSOC was created by Dodd-Frank to identify and respond to systemic risks to U.S. financial stability posed by large, interconnected financial firms.

  7. A 'material weakness' in internal controls, as defined under SOX, indicates that there is:

    Answer: A reasonable possibility that a material misstatement will not be prevented or detected on a timely basis

    A material weakness is a deficiency where there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected timely.