To reduce the probability of fraud in financial reports, the National Commission on Fraudulent Financial Reporting, also known as the Treadway Commission, made which of the following recommendations?

• A.Appoint a mandatory independent finance committee.
• B.Develop a written charter for the audit committee.
• C.Assign oversight of the hotline reporting program to shareholders.
• D.Provide adequate resources and authority to management.

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According to G20/OECD Principles of Corporate Governance (the Principles):

• A.A corporate governance framework should focus on the rights of shareholders but does not need to include the rights of other organizational stakeholders
• B.Governments should have in place a corporate governance framework that promotes transparent and fair markets
• C.Companies should disclose all financial information to investors, regardless of the cost burden of the disclosure
• D.All of the above

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Joanna is leading the fraud risk assessment process for her organization. Which of the following considerations about the fraud risk assessment process is MOST ACCURATE and should be incorporated into Joanna's plans?

• A.To ensure the independence of the team members, a consultant or another external party must conduct the fraud risk assessment.
• B.If the individuals conducting the fraud risk assessment believe that fraud could not happen within the organization, then the assessment process should reflect that belief.
• C.The fraud risk assessment can be conducted effectively by people inside or outside of the organization.
• D.The fraud risk assessment is most effective when management's influence on the process is limited.

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The Committee of Sponsoring Organizations of the Treadway Commission (COSO) defines internal control as:

• A.A process implemented to review how well the organization's risk management capabilities have increased value over time and how they will continue to drive value for the organization.
• B.A process, effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance.
• C.A process involving personnel at all levels of the organization that aims to eliminate all uncertainty and risk while also ensuring the effectiveness of the organization's strategy.
• D.A process aimed at proactively identifying, evaluating, and addressing an organization's vulnerabilities to fraud by both internal and external sources.

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Which of the following statements is MOST ACCURATE regarding the internal audit function?

• A.The primary objective of the internal audit function is to ensure that public resources are used efficiently, legally, and for their intended purposes.
• B.The most common type of internal audit engagement involves performing an audit of the financial statements to provide assurance regarding their accuracy and reliability to the organization's external stakeholders.
• C.Internal auditing helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes.
• D.Internal auditors are auditors who are not employed by, and thus are fully independent of, the organization being audited.

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