With regard to organizational governance assurance, which of the following is an appropriate role for the internal audit activity'?

• A.Assess compliance with the organization's code of conduct
• B.Provide advice on organizational governance activities
• C.Initiate new organizational control processes
• D.Oversee the governance and risk management processes

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The chief audit executive should periodically report the internal audit activity's purpose, authority, responsibility, and performance, as well as significant risk exposures and control issues, to which of the following?
I. Board of directors.
II. Senior management.
III. Shareholders.
IV. External auditors.

• A.I and II only
• B.I, II, and III only
• C.II only
• D.I, III, and IV only

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Which of the following statements about risk assessment is true?

• A.Risk assessment focuses on the quantitative evaluation of exposures.
• B.Risk assessment determines the organization's tolerance for exposure.
• C.Risk assessment evaluates risk both on an inherent and residual basis.
• D.Risk assessment is the amount of inherent risk in a separately identifiable business entity.

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The top three sales representatives for a company consistently include non-allowable charges on their expense reports. Line management is reluctant to deny reimbursement of the charges for fear of losing the sales representatives.
This situation has the greatest negative impact on which of the following internal control components?

• A.Control environment.
• B.Information and communication.
• C.Control activities.
• D.Monitoring.

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According to the COSO Enterprise Risk Management - Integrated Framework, which of the following statements is true regarding the role of risk appetite in an organization?

• A.Risk appetite reflects the organization's risk philosophy and influences its operating style.
• B.A high risk appetite may limit capital investment in high risk areas.
• C.Risk appetite is determined in part by how an entity allocates its resources.
• D.Risk appetite is often best measured in the same units as its related objective.

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