1.COSO's Internal Control Model has five components and 17 principles. Which of the following is(are) principle(s) of the control environment component? (Check all that apply.)

A.A commitment to attract, develop, and retain competent individuals in alignment with objectives

B. Considering the potential of fraud

C. Selecting, developing, and performing ongoing or separate evaluations of the components of internal control

D. Holding individuals accountable for their internal control responsibilities in pursuit of objectives

E.Commitment to integrity and ethics

2.which of the following statements is true with respect to a company's control environment? (Check all that apply.)

A.

One of the greatest control strengths is the dishonesty of employees; one of the greatest control weaknesses is the honesty of employees.

B.

Management should assign authority and responsibility for goals and objectives to departments and individuals and hold them accountable for achieving them.

C.

An overly complex or unclear organizational structure is not an indication of possible serious problems in an organization.

D.

An involved board of directors represents shareholders and provides an independent review of management that acts as a check and balance on their actions.

3.Which of the following statements are true? (Check all that apply.)

A.

Residual risk is the susceptibility of a set of accounts or transactions to significantly control problems in the absence of internal control.

B.

Management must specify objectives clearly enough for risks to be identified and assessed.

C.

Inherent risk is the risk that remains after management implements internal controls, or some other response, to risk.

D.

Management must take an entity-wide view of risk.

E.

Management must identify and analyze risks to determine how they should be managed.

4.According to the text, management can respond to risk in which of the following ways? (Check all that apply.)

A.

Avoid it by not engaging in the activity that produces the risk

B.

Share it or transfer it to someone else

C.

Accept its likelihood and impact

D.

Reduce its likelihood and impact

E.

Examine its likelihood and impact

5.Which of the following statements are true? (Check all that apply.)

A.

The objective of an internal control system is to provide reasonable assurance that events do not take place.

B.

Detective controls are superior to preventive controls; neither is as good as a corrective control.

C.

The likelihood and impact of a risk must be considered separately.

D.

The benefits of an internal control procedure are usually easier to measure than the costs.

E.

Some events pose a greater risk because they are more likely to occur.

6.Which of the following is in the correct sequence for assessing and responding to risk?

A.

Identify controls, estimate cost and benefits of controls, identify threats, estimate likelihood of risk

B.

Identify threats, estimate likelihood of risk, identify controls, estimate cost and benefits of controls

C.

Identify the impact of a threat, estimate cost and benefits of controls, estimate likelihood of risk, identify controls

D.

Estimate cost and benefits of controls, estimate likelihood of risk, identify threats, identify control

7.Which of the following statements is true? (Check all that apply.)

A.

Risk should never be accepted, even if it is within the company's risk tolerance range.

B.

The benefits of implementing controls are generally easier to quantify accurately than are the costs of implementing controls.

C.

In evaluating internal controls, management must consider factors other than those in the expected cost/benefit calculation.

D.

Cost-effective controls should be implemented to reduce risk.

8.Which of the following are true statements? (Check all that apply.)

A.

Virtually all calls to fraud hotlines are worthy of investigation.

B.

Neural networks and other programs with learning capabilities are still not able to accurately identify fraud.

C.

Fraudsters follow distinct patterns and leave clues behind that can be discovered by fraud detection software.

D.

People witnessing fraudulent behavior are eager and willing to report fraud perpetrators.

E.

Some whistle-blowers have been ostracized, persecuted, or suffered damage to their careers.

9.Which of the following statements are true? (Check all that apply.)

A.

Customer relationship management (CRM) software includes budgets, schedules, and standard costs; reports comparing actual and planned performance; and procedures for investigating and correcting significant variances.

B.

All system transactions and activities should be recorded in a log that indicates who accessed what data and when.

C.

Accounting systems generally consist of several subsystems, each designed to process a particular type of transaction.

D.

Most mobile devices do not need to be tracked and monitored as their loss represents minimal exposure.

E.

Supervision is especially important in organizations without responsibility reporting or an adequate segregation of duties.