PVL2601 EXAM PACK 2025 [DETAILED QUESTIONS AND ANSWERS]
internal audit - (answer)independent, objective assurance and consulting activity designed to add value
and improve an organization's operations. independence and objectivity, systematic and disciplined
approach
governance - (answer)the process conducted by the BOD to authorize, direct, and oversee management
toward the achievement of the organization's objectives.It is the system of rules, practices, and
processes by which a company is directed and controlled.
risk management - (answer)the process conducted by management to understand and deal with
uncertainties that could affect the organization's ability to achieve its objectives
control - (answer)the process conducted by management to mitigate risks to acceptable levels
assurance - (answer)an objective examination of evidence for the purpose of providing an independent
assessment on risk management, control, or governance processes for the organization
consulting - (answer)advisory and related client service activities, the nature and scope of which are
agreed with the client and which are intended to add value and improve an organizations governance,
risk management, and control processses without the internal auditor assuming management
responsibilities
3 components of value proposition - (answer)assurance, insight, objectivity
insight - (answer)Internal auditor acts as a catalyst for improving an organization's effectiveness and
efficiency by providing insight and recommendation based on analyses and assessment of data and
business processes.
objectivity - (answer)With commitment to integrity and accountability, internal auditor provides value to
governing bodies and senior management as an objective source of independent advice.
auditing vs accounting - (answer)accounting collects, classifies, summarizes and communicates data, as
well as measures and communicates business events and conditions.
, PVL2601 EXAM PACK 2025 [DETAILED QUESTIONS AND ANSWERS]
auditing considers business events and conditions also but does not have the task of measuring or
communicating them. they review them for propriety. it is analytical and investigative
Risk - (answer)the effect of uncertainty on business objectives; risk mgmt refers to the set of
coordinated activities to direct and control an organization to recognize opportunities while
management negative events
compliance - (answer)adherence to policies, plans, procedures, laws, regulations, contracts of other
requirements
corporate governance - (answer)values/goals are established and communicated, accomplishment of
goals are monitored, accountability is ensured, and values are preserved
governance umbrella - (answer)board of directors up top- they have strategic direction, governance
oversight
role of the Board in Governance - (answer)to identify the stakeholders of an organization, understand
the needs and expectations of the stakeholders, identify the potential outcomes that would be
unacceptable to key stakeholders
different types of outcomes - (answer)financial, compliance, operations, strategic
Risk appetite - (answer)Amount of risk the organization or function is willing to pursue or accept to
attain its goals
risk tolerance - (answer)The degree of uncertainty that an investor can ACTUALLY handle in regard to a
negative change in the value of his or her portfolio.
risk owners - (answer)individuals who have day to day responsibility for ensuring that risk management
activities effectively manage risks within the organization's risk tolerance levels
internal audit - (answer)independent, objective assurance and consulting activity designed to add value
and improve an organization's operations. independence and objectivity, systematic and disciplined
approach
governance - (answer)the process conducted by the BOD to authorize, direct, and oversee management
toward the achievement of the organization's objectives.It is the system of rules, practices, and
processes by which a company is directed and controlled.
risk management - (answer)the process conducted by management to understand and deal with
uncertainties that could affect the organization's ability to achieve its objectives
control - (answer)the process conducted by management to mitigate risks to acceptable levels
assurance - (answer)an objective examination of evidence for the purpose of providing an independent
assessment on risk management, control, or governance processes for the organization
consulting - (answer)advisory and related client service activities, the nature and scope of which are
agreed with the client and which are intended to add value and improve an organizations governance,
risk management, and control processses without the internal auditor assuming management
responsibilities
3 components of value proposition - (answer)assurance, insight, objectivity
insight - (answer)Internal auditor acts as a catalyst for improving an organization's effectiveness and
efficiency by providing insight and recommendation based on analyses and assessment of data and
business processes.
objectivity - (answer)With commitment to integrity and accountability, internal auditor provides value to
governing bodies and senior management as an objective source of independent advice.
auditing vs accounting - (answer)accounting collects, classifies, summarizes and communicates data, as
well as measures and communicates business events and conditions.
, PVL2601 EXAM PACK 2025 [DETAILED QUESTIONS AND ANSWERS]
auditing considers business events and conditions also but does not have the task of measuring or
communicating them. they review them for propriety. it is analytical and investigative
Risk - (answer)the effect of uncertainty on business objectives; risk mgmt refers to the set of
coordinated activities to direct and control an organization to recognize opportunities while
management negative events
compliance - (answer)adherence to policies, plans, procedures, laws, regulations, contracts of other
requirements
corporate governance - (answer)values/goals are established and communicated, accomplishment of
goals are monitored, accountability is ensured, and values are preserved
governance umbrella - (answer)board of directors up top- they have strategic direction, governance
oversight
role of the Board in Governance - (answer)to identify the stakeholders of an organization, understand
the needs and expectations of the stakeholders, identify the potential outcomes that would be
unacceptable to key stakeholders
different types of outcomes - (answer)financial, compliance, operations, strategic
Risk appetite - (answer)Amount of risk the organization or function is willing to pursue or accept to
attain its goals
risk tolerance - (answer)The degree of uncertainty that an investor can ACTUALLY handle in regard to a
negative change in the value of his or her portfolio.
risk owners - (answer)individuals who have day to day responsibility for ensuring that risk management
activities effectively manage risks within the organization's risk tolerance levels
