CIA Exam: Part 1 Study Guide with Complete Solutions

CIA Exam: Part 1 Study Guide with Complete Solutions Acceptable Risk - Correct Answer A type of risk that revolves around the business impact that would be experienced if certain risks became realized. The loss is deemed to be acceptable; no additional controls are warranted. Acceptable Risk Level - Correct Answer A risk level derived from an organizations' legal and regulatory compliance responsibilities, its threat profile, and its business drivers and impacts. Adequate Control - Correct Answer A level of control that is present if management has planned and organized (designed) in a manner that provides reasonable assurance that the organization's risk have been managed effectively and that the organization's goals and objectives will be achieved efficiently and economically. Audit Risk - Correct Answer The risk that internal auditors may arrive at the wrong conclusions and opinions of the work that they have undertaken. Compliance - Correct Answer Conformity and adherence to policies, plans, procedures, laws, regulations, contracts, or other requirements. Control Deficiency - Correct Answer A condition that warrants attention as a potential or real shortcoming that leaves an organization excessively at risk. Control Environment - Correct Answer The attitude and actions of the board and management regarding the significance of control within the organization. The control environment provides the discipline and structure for the achievement of the primary objectives of the system of internal control. Elements of the Control Environment - Correct Answer 1) Integrity and ethical values 2) Management's philosophy and operating style 3) Organizational structure 4) Assignment of authority and responsibility 5) Human Resource policies and practic