COSO ACTUAL EXAM TEST PAPER FULL QUESTIONS CORRECT RESPONSES.pdf

COSO ACTUAL EXAM TEST PAPER FULL QUESTIONS CORRECT RESPONSES




Question:
When was COSO originally formed?

Answer:
1985



Question:
What are the three primary areas of guidance provided by COSO?

Answer:
Enterprise risk management (ERM), internal control, and fraud prevention



Question:
What is the fundamental principle of COSO regarding long-term success?

Answer:
Good risk management is necessary for long-term success



Question:
Why was the COSO ERM framework updated in 2017?

Answer:
To address an evolved, more complex, technologically driven, and global risk landscape



Question:
What is the underlying premise of ERM for any entity?

Answer:

, Every entity exists to provide value for its stakeholders



Question:
How does COSO define value creation?

Answer:
When the benefits derived from resources deployed exceed the cost of those resources used



Question:
What is value preservation in the context of ERM?

Answer:
Focusing on resources, processes, and systems in day-to-day operations to create sustained value



Question:
What is value erosion in the context of ERM?

Answer:
When a strategy does not yield expected outcomes or when there is a failure to execute day-to-day
activities



Question:
How is value realization achieved?

Answer:
When stakeholders receive the monetary or non-monetary benefits created by the entity



Question:
List three reasons why it is important for an entity to apply ERM.

Answer: