COSO Exam Questions and Answers
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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:
To achieve performance targets, avoid negative surprises, and ensure compliance with
laws and regulations
Verified Solutions Latest Update
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:
To achieve performance targets, avoid negative surprises, and ensure compliance with
laws and regulations
