COSO etc.

Question 1

What is most useful when risk is being prioritized?

Answer 1

Expected value - integrates the likelihood of losses with the amt of losses. hence, an expected value combines the info in low and high probability exposures and low and high degree loss exposures into a decision relevant, single, valuable (for decision analysis number

Question 2

Strategic, operations, reporting, and compliance are a part of which of the following models of internal control?

Answer 2

COSO ERM

Question 3

Monitoring control effectiveness

Answer 3

Benchmarking assessments.
focus groups and interviews
reviewing flowcharts and other risk and control doc

Question 4

Internal audit must include periodic external assessments - how often?

Answer 4

at least every 5 years

Question 5

Give an example of a general control

Answer 5

restricting access to the computer center is an example of a general control

Question 6

Managing internal audit activity is characterized by

Answer 6

they primarily address the chief audit executive’s responsibility for overseeing the internal audit activity and for adding value to the org

Question 7

What are the 7 primary performance standards?

Answer 7

Managing the Internal audit activity
nature of work
Engagement planning
Performing the engagement
Communicating results
Monitoring progress
Resolution of Senior mgmt's acceptance of risks

Question 8

What is a compensating control?

Answer 8

a control that accomplishes the same objective as another control

Question 9

Monitoring internal controls

Answer 9

Est a foundation for monitoring
Designing and executing monitoring procedures that are prioritized based on risks to achieve org objectives
Assessing and reporting results, including following up on corrective action where needed

Question 10

What is assoc with the attributes standards Standard 1000?

Answer 10

purpose, authority, and responsibility

Question 11

In perfect competition what is always correct?

Answer 11

Price equals marginal revenue

Question 12

Law of diminishing returns

Answer 12

As more units of a variable input are added to fixed inputs, a point is reached at which the continued addition of variable inputs results in decreasing output per unit of variable input.

Question 13

What is a characteristic of a natural monopoly?

Answer 13

A firm has increasing returns to scale - such that a single firm can produce at a lower cost than two or more firms. typically fixed costs are extremely high, making it inefficient for a second firm to enter the market