ARM 400 Risk in an Evolving World 2025
Latest Exam
ARM 400 Risk in an Evolving World 2025
Latest Exam 200 Questions and Correct
Detailed Answers with Rationales / ARM 400
Exam Practice Test Bank
Which one of the following best explains how the role of the internal auditor changed with the
passage of the Sarbanes-Oxley Act of 2002?
Select one:
A. The internal auditor must adopt the attitude of an external auditor, carefully reviewing and
critiquing the finances of an organization.
B. The internal auditor must adopt a stakeholder orientation by anticipating, monitoring and
assessing business and operational risk.
C. The internal auditor must be able to recognize current fraud risks as well computer theft of
intellectual property.
D. The internal auditor must adapt to the ever changing environment of risk control through the use
of electronic reconciliation programs.
- Correct Answer :B
The Auditing Standard No. 5 (AS 5) calls for a specific fraud assessment because
Select one:
A. Failure to detect fraud through regular transactions in an organization remains the highest risk.
B. The failure to prevent or detect fraudulent misstatements is higher than the risk of failing to
prevent or detect other types of errors.
C. Of the financial scandals of the late twentieth century; there is now an obligation to detect fraud.
D. Fraud within an organization remains the most serious threat to the economic well-being of
society. –
A+ TEST BANK 1
, ARM 400 Risk in an Evolving World 2025
Latest Exam
Correct Answer :B
Developing a risk-based audit plan requires a risk assessment. Under the model of the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) Internal Control—Integrated
Framework, which one of the following explains how risk assessment is addressed?
Select one:
A. It is essentially the same as the traditional model, but is codified in steps that are reported.
B. It expands the risk assessment concept by comparing it to competitor audits.
C. It is narrower and it provides concrete steps which are recommended and differ by industry.
D. It expands the risk assessment concept by identifying five interrelated components of internal
control. –
Correct Answer :D
Which one of the following best describes how the modern approach to internal auditing differs
from the traditional approach?
Select one:
A. The traditional approach uses systems-based controls, determines materiality of potential risks to
the organization's achievement of its objectives rather than reviewing adherence to regulations.
B. The modern approach uses many systems-based techniques, determines activity based on the
organization's business objectives, materiality of the risk and key threats to achieving business
objectives rather than evaluating current controls.
C. The modern approach uses a systems-based technique, evaluating current controls and threats to
the organization, and considers the materiality of risks, but does not consider an organization's
business objectives.
D. The traditional approach confines itself to review of current system controls, compliance with
those controls and any potential to -
Correct Answer :B
A+ TEST BANK 2
, ARM 400 Risk in an Evolving World 2025
Latest Exam
Which one of the following is true regarding internal audit involvement with enterprise risk
management (ERM) efforts?
Select one:
A. Internal audit is not becoming more involved with ERM efforts because internal audit must remain
independent and objective.
B. Internal audit is responsible for reviewing controls in an organization which includes ERM
programs.
C. Internal audit is responsible for the organization's compliance with all governance issues, including
ERM compliance.
D. Internal audit is increasingly asked to evaluate organizational risks, including strategic, financial
and hazard risks. –
Correct Answer :D
One internal control integrated framework consists of five essential components: the control
environment, risk assessment, control activities, information and communication, and monitoring
activities. When these components are applied across the organization, they create a "cube." This
framework is the
Select one:
A. Committee of Sponsoring Organizations of the Treadway Commission's (COSO's) framework.
B. Financial Accounting Standards Board's (FASB's) Internal Control Standard.
C. Institute of International Auditors (IIA) International Standards for the Practice of International
Auditing.
D. International Organization for Standardization's (ISO's) framework. –
Correct Answer :A
The Committee of Sponsoring Organizations of the Treadway Commission's (COSO's) Internal
Control—Integrated Framework provides
A+ TEST BANK 3
, ARM 400 Risk in an Evolving World 2025
Latest Exam
Select one:
A. Guidance on assessing risk and evaluating internal controls to government agencies but not to
other organizations.
B. Common standards designed to increase effectiveness and efficiency of operations and reliability
of financial reporting while ensuring compliance with applicable laws and regulations.
C. International standards to help ensure that organizations meet the needs of customers and
stakeholders while also complying with statutory and regulatory requirements.
D. Not a system of controls, but a framework for auditors to provide independent, objective, and
reasonable assurances that management has adopted a system of controls that is effective and
functioning as intended. –
Correct Answer :B
In accordance with the Three Lines of Defense Model, how does risk management act as the second
line of defense?
Select one:
A. Risk management supports and monitors operational management's implementation of risk
management practices.
B. Risk management provides oversight to the operational management's assessment of risk and
internal controls.
C. Risk management alerts internal audit of potential threats within a department and works with
internal audit to neutralize the threat.
D. Risk management has authority to initiate activity demanding an external audit should a risk be
deemed imminent. –
Correct Answer :A
The importance of strong control environments with independent oversight have become
increasingly important
Select one:
A. Because international trade is dependent upon consistent accounting processes.
A+ TEST BANK 4
Latest Exam
ARM 400 Risk in an Evolving World 2025
Latest Exam 200 Questions and Correct
Detailed Answers with Rationales / ARM 400
Exam Practice Test Bank
Which one of the following best explains how the role of the internal auditor changed with the
passage of the Sarbanes-Oxley Act of 2002?
Select one:
A. The internal auditor must adopt the attitude of an external auditor, carefully reviewing and
critiquing the finances of an organization.
B. The internal auditor must adopt a stakeholder orientation by anticipating, monitoring and
assessing business and operational risk.
C. The internal auditor must be able to recognize current fraud risks as well computer theft of
intellectual property.
D. The internal auditor must adapt to the ever changing environment of risk control through the use
of electronic reconciliation programs.
- Correct Answer :B
The Auditing Standard No. 5 (AS 5) calls for a specific fraud assessment because
Select one:
A. Failure to detect fraud through regular transactions in an organization remains the highest risk.
B. The failure to prevent or detect fraudulent misstatements is higher than the risk of failing to
prevent or detect other types of errors.
C. Of the financial scandals of the late twentieth century; there is now an obligation to detect fraud.
D. Fraud within an organization remains the most serious threat to the economic well-being of
society. –
A+ TEST BANK 1
, ARM 400 Risk in an Evolving World 2025
Latest Exam
Correct Answer :B
Developing a risk-based audit plan requires a risk assessment. Under the model of the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) Internal Control—Integrated
Framework, which one of the following explains how risk assessment is addressed?
Select one:
A. It is essentially the same as the traditional model, but is codified in steps that are reported.
B. It expands the risk assessment concept by comparing it to competitor audits.
C. It is narrower and it provides concrete steps which are recommended and differ by industry.
D. It expands the risk assessment concept by identifying five interrelated components of internal
control. –
Correct Answer :D
Which one of the following best describes how the modern approach to internal auditing differs
from the traditional approach?
Select one:
A. The traditional approach uses systems-based controls, determines materiality of potential risks to
the organization's achievement of its objectives rather than reviewing adherence to regulations.
B. The modern approach uses many systems-based techniques, determines activity based on the
organization's business objectives, materiality of the risk and key threats to achieving business
objectives rather than evaluating current controls.
C. The modern approach uses a systems-based technique, evaluating current controls and threats to
the organization, and considers the materiality of risks, but does not consider an organization's
business objectives.
D. The traditional approach confines itself to review of current system controls, compliance with
those controls and any potential to -
Correct Answer :B
A+ TEST BANK 2
, ARM 400 Risk in an Evolving World 2025
Latest Exam
Which one of the following is true regarding internal audit involvement with enterprise risk
management (ERM) efforts?
Select one:
A. Internal audit is not becoming more involved with ERM efforts because internal audit must remain
independent and objective.
B. Internal audit is responsible for reviewing controls in an organization which includes ERM
programs.
C. Internal audit is responsible for the organization's compliance with all governance issues, including
ERM compliance.
D. Internal audit is increasingly asked to evaluate organizational risks, including strategic, financial
and hazard risks. –
Correct Answer :D
One internal control integrated framework consists of five essential components: the control
environment, risk assessment, control activities, information and communication, and monitoring
activities. When these components are applied across the organization, they create a "cube." This
framework is the
Select one:
A. Committee of Sponsoring Organizations of the Treadway Commission's (COSO's) framework.
B. Financial Accounting Standards Board's (FASB's) Internal Control Standard.
C. Institute of International Auditors (IIA) International Standards for the Practice of International
Auditing.
D. International Organization for Standardization's (ISO's) framework. –
Correct Answer :A
The Committee of Sponsoring Organizations of the Treadway Commission's (COSO's) Internal
Control—Integrated Framework provides
A+ TEST BANK 3
, ARM 400 Risk in an Evolving World 2025
Latest Exam
Select one:
A. Guidance on assessing risk and evaluating internal controls to government agencies but not to
other organizations.
B. Common standards designed to increase effectiveness and efficiency of operations and reliability
of financial reporting while ensuring compliance with applicable laws and regulations.
C. International standards to help ensure that organizations meet the needs of customers and
stakeholders while also complying with statutory and regulatory requirements.
D. Not a system of controls, but a framework for auditors to provide independent, objective, and
reasonable assurances that management has adopted a system of controls that is effective and
functioning as intended. –
Correct Answer :B
In accordance with the Three Lines of Defense Model, how does risk management act as the second
line of defense?
Select one:
A. Risk management supports and monitors operational management's implementation of risk
management practices.
B. Risk management provides oversight to the operational management's assessment of risk and
internal controls.
C. Risk management alerts internal audit of potential threats within a department and works with
internal audit to neutralize the threat.
D. Risk management has authority to initiate activity demanding an external audit should a risk be
deemed imminent. –
Correct Answer :A
The importance of strong control environments with independent oversight have become
increasingly important
Select one:
A. Because international trade is dependent upon consistent accounting processes.
A+ TEST BANK 4
