ACTUAL CIA EXAM STUDY REVIEW
2026/2027
Acceptable Risk - ANSWER-A type of risk that revolves around the business impact that
would be experienced if certain risks became realized. The loss is deemed to be
acceptable; no additional controls are warranted.
Acceptable Risk Level - ANSWER-A risk level derived from an organizations' legal and
regulatory compliance responsibilities, its threat profile, and its business drivers and
impacts.
Adequate Control - ANSWER-A level of control that is present if management has
planned and organized (designed) in a manner that provides reasonable assurance that
the organization's risk have been managed effectively and that the organization's goals
and objectives will be achieved efficiently and economically.
Audit Risk - ANSWER-The risk that internal auditors may arrive at the wrong
conclusions and opinions of the work that they have undertaken.
Compliance - ANSWER-Conformity and adherence to policies, plans, procedures, laws,
regulations, contracts, or other requirements.
Control Deficiency - ANSWER-A condition that warrants attention as a potential or real
shortcoming that leaves an organization excessively at risk.
Control Environment - ANSWER-The attitude and actions of the board and
management regarding the significance of control within the organization. The control
environment provides the discipline and structure for the achievement of the primary
objectives of the system of internal control.
Elements of the Control Environment - ANSWER-1) Integrity and ethical values
2) Management's philosophy and operating style
3) Organizational structure
4) Assignment of authority and responsibility
5) Human Resource policies and practices
6) Competence of personnel
Control Process - ANSWER-The policies, procedures, and activities that are part of a
control framework, designed to ensure that risks are contained within the risk tolerances
established by the risk management process.
Control Risk - ANSWER-The potential that control activities will fail to reduce
controllable risk to an acceptable level.
, Enterprise risk management (ERM) - ANSWER-A structured, consistent, and
continuous process across the whole organization for identifying, assessing, deciding
on responses to, and reporting on opportunities and threats that affect the achievement
of its objectives.
Event - ANSWER-An incident or occurrence resulting from internal or external sources
that affects the implementation of strategy or achievement of objectives.
Impact - ANSWER-The result, effect, or consequences of an event.
Inherent Limitations - ANSWER-Limitations of risk management, control, and
governance related to human judgement, resource limitations, and the need to balance
the costs of controls in relation to expected benefits; considers the reality of breakdowns
occurring and the possibility of management override and collusion.
Inherent Risk (or Absolute Risk) - ANSWER-The risk derived from the environment
without the mitigating effects of internal controls
Likelihood - ANSWER-The probability that a given event will occur.
Opportunity - ANSWER-As related to risk, an uncertain event with a positive
consequence.
Pervasive Risk - ANSWER-The type of risk found throughout the environment.
Residual Risk - ANSWER-The risk remaining after management takes action to reduce
the impact and likelihood of an adverse event, including control activities in responding
to a risk.
Risk Appetite - ANSWER-The level of risk an organization is willing to accept.
Risk Assessment (or Risk Analysis) - ANSWER-The identification and measurement of
risk and the process of prioritizing risk.
Risk Classification - ANSWER-The assignment of risk into categories, such as financial
risk, operational risk, strategic risk, or reputation risk.
Risk Identification - ANSWER-The method of recognizing possible threats and
opportunities.
Risk Management - ANSWER-A process to identify, assess, manage, and control
potential events or situations, to provide reasonable assurance regarding the
achievement of the organization's objectives.
Risk Prioritization - ANSWER-Ranking risks, formally or informally, from the highest to
the lowest.
2026/2027
Acceptable Risk - ANSWER-A type of risk that revolves around the business impact that
would be experienced if certain risks became realized. The loss is deemed to be
acceptable; no additional controls are warranted.
Acceptable Risk Level - ANSWER-A risk level derived from an organizations' legal and
regulatory compliance responsibilities, its threat profile, and its business drivers and
impacts.
Adequate Control - ANSWER-A level of control that is present if management has
planned and organized (designed) in a manner that provides reasonable assurance that
the organization's risk have been managed effectively and that the organization's goals
and objectives will be achieved efficiently and economically.
Audit Risk - ANSWER-The risk that internal auditors may arrive at the wrong
conclusions and opinions of the work that they have undertaken.
Compliance - ANSWER-Conformity and adherence to policies, plans, procedures, laws,
regulations, contracts, or other requirements.
Control Deficiency - ANSWER-A condition that warrants attention as a potential or real
shortcoming that leaves an organization excessively at risk.
Control Environment - ANSWER-The attitude and actions of the board and
management regarding the significance of control within the organization. The control
environment provides the discipline and structure for the achievement of the primary
objectives of the system of internal control.
Elements of the Control Environment - ANSWER-1) Integrity and ethical values
2) Management's philosophy and operating style
3) Organizational structure
4) Assignment of authority and responsibility
5) Human Resource policies and practices
6) Competence of personnel
Control Process - ANSWER-The policies, procedures, and activities that are part of a
control framework, designed to ensure that risks are contained within the risk tolerances
established by the risk management process.
Control Risk - ANSWER-The potential that control activities will fail to reduce
controllable risk to an acceptable level.
, Enterprise risk management (ERM) - ANSWER-A structured, consistent, and
continuous process across the whole organization for identifying, assessing, deciding
on responses to, and reporting on opportunities and threats that affect the achievement
of its objectives.
Event - ANSWER-An incident or occurrence resulting from internal or external sources
that affects the implementation of strategy or achievement of objectives.
Impact - ANSWER-The result, effect, or consequences of an event.
Inherent Limitations - ANSWER-Limitations of risk management, control, and
governance related to human judgement, resource limitations, and the need to balance
the costs of controls in relation to expected benefits; considers the reality of breakdowns
occurring and the possibility of management override and collusion.
Inherent Risk (or Absolute Risk) - ANSWER-The risk derived from the environment
without the mitigating effects of internal controls
Likelihood - ANSWER-The probability that a given event will occur.
Opportunity - ANSWER-As related to risk, an uncertain event with a positive
consequence.
Pervasive Risk - ANSWER-The type of risk found throughout the environment.
Residual Risk - ANSWER-The risk remaining after management takes action to reduce
the impact and likelihood of an adverse event, including control activities in responding
to a risk.
Risk Appetite - ANSWER-The level of risk an organization is willing to accept.
Risk Assessment (or Risk Analysis) - ANSWER-The identification and measurement of
risk and the process of prioritizing risk.
Risk Classification - ANSWER-The assignment of risk into categories, such as financial
risk, operational risk, strategic risk, or reputation risk.
Risk Identification - ANSWER-The method of recognizing possible threats and
opportunities.
Risk Management - ANSWER-A process to identify, assess, manage, and control
potential events or situations, to provide reasonable assurance regarding the
achievement of the organization's objectives.
Risk Prioritization - ANSWER-Ranking risks, formally or informally, from the highest to
the lowest.
