COSO Quiz – Questions With Accurate Answers (A+)
[ 1 ] 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. Right Ans - D
[ 2 ] 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. Right Ans - A
[ 3 ] 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.
Right Ans - A
[ 4 ] 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 exceed its benefits.
D. Management monitors performance. Right Ans - C
[ 5 ] Which of the following is the control component that reflects the attitude
and actions of the board and management regarding the significance of
control within the organization?
A. Risk assessment.
B. Control activities.
C. Control environment.
D. Monitoring. Right Ans - C
[ 6 ] According to COSO, which of the following is the most effective method to
transmit a message of ethical behavior throughout an organization?
A. Demonstrating appropriate behavior by example.
B. Strengthening internal audit's ability to deter and report improper
behavior.
C. Removing pressures to meet unrealistic targets, particularly for short-term
results. D. Specifying the competence levels for every job in an organization
and translating
those levels to requisite knowledge and skills. Right Ans - A
[ 7 ] Within the COSO Internal Control - Integrated Framework, which of the
following components is designed to ensure that internal controls continue to
operate effectively?
A. Control environment.
B. Risk assessment.
[ 1 ] 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. Right Ans - D
[ 2 ] 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. Right Ans - A
[ 3 ] 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.
Right Ans - A
[ 4 ] 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 exceed its benefits.
D. Management monitors performance. Right Ans - C
[ 5 ] Which of the following is the control component that reflects the attitude
and actions of the board and management regarding the significance of
control within the organization?
A. Risk assessment.
B. Control activities.
C. Control environment.
D. Monitoring. Right Ans - C
[ 6 ] According to COSO, which of the following is the most effective method to
transmit a message of ethical behavior throughout an organization?
A. Demonstrating appropriate behavior by example.
B. Strengthening internal audit's ability to deter and report improper
behavior.
C. Removing pressures to meet unrealistic targets, particularly for short-term
results. D. Specifying the competence levels for every job in an organization
and translating
those levels to requisite knowledge and skills. Right Ans - A
[ 7 ] Within the COSO Internal Control - Integrated Framework, which of the
following components is designed to ensure that internal controls continue to
operate effectively?
A. Control environment.
B. Risk assessment.
