Pre-Travel Assignment #4
Q1
Question 1
Which of the following is an appropriate role for internal auditors to play in a fraud risk
management program?
Select one:
a. Set an appropriate tone and realistic expectations of management to enforce an anti-fraud
culture.
b. Develop a strategy to assess and manage fraud risk.
c. Punish perpetrators of discovered fraud appropriately.
d. Maintain an attitude of professional skepticism and be on guard for signs of fraud.
Pre-Travel Assignment #4
Q2
Question 2
Which of the following represents the best order in which to perform the steps involved in the
creation of a fraud risk management program?
Select one:
a. Communicate expectations, assess risk, design program components, and implement program
components.
b. Design program components, assess risk, communicate expectations, and implement program
components.
c. Assess risk, communicate expectations, design program components, and implement program
components.
d. Assess risk, design program components, implement program components, and communicate
expectations.
Q3
Question 3
Which of the following encompasses strong board governance practices?
Select one:
a. Access to multiple layers of management
b. Nomination processes that are not independent
c. Management ownership of agendas
d. Limited flow of information to the board
Q4
Question 4
Which of the following is an example of a positive outcome for management implementing an
effective risk management program?
Select one:
a. Reduction in operational losses
b. Ability to manage enterprise risks individually
c. Reduce capital deployment
d. Ability to relinquish opportunities
Q5
Question 5
Which of the following is a component of the COSO Enterprise Risk Management—Integrating
with Strategy and Performance?
Select one:
a. Internal controls
b. Information, communication, and reporting
c. Ethics
d. Risk aversion
Q6
Question 6
An organization’s reporting policies and procedures should include which of the following?
Select one:
a. Clearly define and communicate channels to use to report suspected fraud.
b. Be thoroughly and openly communicated only to those internal to the organization.
c. Provide ambiguous support and protection for whistleblowers.
d. Set the expectation that suspected fraud should be immediately reported when it can be backed
up by factual statements or evidence.
Pre-Travel Assignment #4
Q7
Question 7
Of COSO’s five components of internal control, which component includes the standards,
processes, and structures that form the foundation for carrying out internal controls across an
organization?
Select one:
a. Monitoring
b. Control activities
c. Control environment
d. Information and communication
Q8
Question 8
Conducting employee surveys is an example of which of the following?
Select one:
a. Detective control
b. Residual risk
c. Inherent risk
d. Preventive control
Q9
Question 9
When it comes to managing fraud risk, which of the following is the responsibility of senior
management?
Select one:
a. Engaging in candid and open conversations with external auditors about any known or
suspected fraud
b. Performing an initial fraud risk assessment and updating it on an ad hoc basis
c. Ensuring the organization has effective internal controls in place to prevent and detect fraud
d. Having only significant allegations of fraud investigated
Q 10
Question 10
Risk that is present before management takes action to mitigate it is referred to as __________.
Select one:
a. Fraud risk
b. Residual risk
c. Reputation risk
d. Inherent risk
Q 11
Question 11
A fraud awareness program should include which of the following?
Select one:
a. Lengthy and private action in the case of violations
b. Mandates that certain employees participate in fraud awareness training
c. Employee education only at the time of hire
d. A well-publicized reporting mechanism
Q 12
Question 12
Why is it important for an organization to effectively manage fraud risk?
Select one:
a. When an organization is reactive in managing fraud risk, it will spend less time and money
managing fraud occurrences.
b. Based on findings from the ACFE’s 2018 Report to the Nations on Occupational Fraud and
Abuse, the typical organization loses an estimated 1% of its annual revenues to fraud.
c. By being proactive in managing fraud risk, management can stop fraud before it occurs and
decrease the organization’s bottom line.
d. Management can enhance an organization’s public image and reputation by effectively
managing fraud risk.
Q 13
Question 13
_________ is primarily responsible for designing, implementing, monitoring, and improving the
fraud risk management program.
Select one:
a. Management
b. The board of directors
c. Internal audit
d. Everyone
Q 14
Question 14
Of COSO’s five components of internal controls, which of the following includes implementing
controls to mitigate risks identified during a fraud risk assessment?
Select one:
a. Control environment
b. Risk assessment
c. Control activities
d. Monitoring
Q 15
Question 15
According to the Fraud Risk Management Guide, which of the following is one of the five
guiding principles of an effective fraud risk management program?
Select one:
a. Addresses deviations of conduct in a timely manner
b. Sets the tone at the top
c. Performs a fraud risk assessment
d. Establishes standards of conduct

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