GRC - Governance, Risk, and Compliance Internal Controls and Auditing Questions and Answers

Question 1

A financial services company is preparing for its annual audit.
The internal audit team wants to ensure that controls are in place to stop incorrect data from being entered into the financial system in the first place.
Which type of internal control is MOST relevant to this objective?

Accepted Answer

Preventive controls

Answer

Detective controls

Answer

Corrective controls

Answer

Directive controls

Question 2

Which of the following is a primary responsibility of the internal audit function within a Governance, Risk, and Compliance (GRC) framework?

Accepted Answer

Providing independent assurance on the effectiveness of risk management processes.

Answer

Setting the organization's risk appetite.

Answer

Designing and implementing internal controls.

Answer

Making final decisions on risk response strategies.

Question 3

According to the COSO Internal Control-Integrated Framework, which component establishes the 'tone at the top' and includes the ethical values and integrity of the organization?

Accepted Answer

Control Environment

Answer

Risk Assessment

Answer

Control Activities

Answer

Monitoring Activities

Question 4

A company's external auditor is required to provide an opinion on management's assessment of the internal controls over financial reporting. This requirement is a key provision of which regulation?

Accepted Answer

The Sarbanes-Oxley Act (SOX)

Answer

The Foreign Corrupt Practices Act (FCPA)

Answer

The Gramm-Leach-Bliley Act (GLBA)

Answer

The Health Insurance Portability and Accountability Act (HIPAA)

Question 5

An IT auditor is reviewing the security of a specific accounting application. They are testing controls that check for valid data formats in entry fields and ensure that users can only approve transactions within their authorized limits. These controls are best classified as:

Accepted Answer

IT Application Controls (ITACs)

Answer

IT General Controls (ITGCs)

Answer

Physical Security Controls

Answer

Administrative Controls

Question 6

During the audit planning phase, an internal auditor identifies and analyzes potential events that could hinder the achievement of organizational objectives. They then assess the likelihood and potential impact of these events. This process is known as:

Accepted Answer

Risk assessment

Answer

Control testing

Answer

Compliance verification

Answer

Continuous monitoring

A financial services company is preparing for its annual audit.The internal audit team wants to ensure that controls are in place to stop incorrect data from being entered into the financial system in the first place.Which type of internal control is MOST relevant to this objective?

A financial services company is preparing for its annual audit.
The internal audit team wants to ensure that controls are in place to stop incorrect data from being entered into the financial system in the first place.
Which type of internal control is MOST relevant to this objective?