COSO EXAM QUESTIONS AND CORRECT
ANSWERS
The COSO framework treats internal control as a process designed to provide
reasonable assurance regarding the achievement of objectives related to
A. Reliability of financial reporting.
B. Effectiveness and efficiency of operations.
C. Compliance with applicable laws and regulations.
D. All of the answers are correct. - ANSWER D
Which of the following statements is correct regarding corporate compensation
systems and related bonuses?
1. A bonus system should be considered part of the control environment of an
organization and should be considered in formulating a report on internal
control.
2. Compensation systems are not part of an organization's control system and
should not be reported as such.
3. An audit of an organization's compensation system should be performed
independently of an audit of the control system over other functions that impact
corporate bonuses.
A. 1 only.
B. 2 only.
C. 3 only.
D. 2 and 3 only. - ANSWER A
, An organization's directors, management, external auditors, and internal
auditors all
play important roles in creating a proper control environment. Senior
management is
primarily responsible for
A. Establishing a proper organizational culture and specifying a system of
internal
control.
B. Designing and operating a control system that provides reasonable assurance
that
established objectives and goals will be achieved.
C. Ensuring that external and internal auditors adequately monitor the control
environment.
D. Implementing and monitoring controls designed by the board of directors. -
ANSWER A
Internal control can provide only reasonable assurance that the organization's
objectives will be met efficiently and effectively. One factor limiting the
likelihood of
achieving those objectives is that
A. The internal auditor's primary responsibility is the detection of fraud.
B. The board is active and independent.
C. The cost of internal control should not be more than the benefit.
D. Management monitors performance. - ANSWER C
Which of the following is the control component that reflects the attitude and
actions
ANSWERS
The COSO framework treats internal control as a process designed to provide
reasonable assurance regarding the achievement of objectives related to
A. Reliability of financial reporting.
B. Effectiveness and efficiency of operations.
C. Compliance with applicable laws and regulations.
D. All of the answers are correct. - ANSWER D
Which of the following statements is correct regarding corporate compensation
systems and related bonuses?
1. A bonus system should be considered part of the control environment of an
organization and should be considered in formulating a report on internal
control.
2. Compensation systems are not part of an organization's control system and
should not be reported as such.
3. An audit of an organization's compensation system should be performed
independently of an audit of the control system over other functions that impact
corporate bonuses.
A. 1 only.
B. 2 only.
C. 3 only.
D. 2 and 3 only. - ANSWER A
, An organization's directors, management, external auditors, and internal
auditors all
play important roles in creating a proper control environment. Senior
management is
primarily responsible for
A. Establishing a proper organizational culture and specifying a system of
internal
control.
B. Designing and operating a control system that provides reasonable assurance
that
established objectives and goals will be achieved.
C. Ensuring that external and internal auditors adequately monitor the control
environment.
D. Implementing and monitoring controls designed by the board of directors. -
ANSWER A
Internal control can provide only reasonable assurance that the organization's
objectives will be met efficiently and effectively. One factor limiting the
likelihood of
achieving those objectives is that
A. The internal auditor's primary responsibility is the detection of fraud.
B. The board is active and independent.
C. The cost of internal control should not be more than the benefit.
D. Management monitors performance. - ANSWER C
Which of the following is the control component that reflects the attitude and
actions
