CPA Business Environment and Concepts (BEC) : COSO Framework
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Example Questions
Example Question #1 : Cpa Business Environment And Concepts (Bec)
Per the COSO ICIF, the main purpose of monitoring internal controls is to confirm that the internal control system can adequately address changes in:
Risk Assessment
Information and communication
Monitoring
Control Environment
Monitoring
Risks constantly change in terms of likelihood and severity. Internal controls should be created and upheld to address changes in risks.
Example Question #1 : Cpa Business Environment And Concepts (Bec)
A company's management is experiencing a lack of segregation of duties within its application environment as its programmers have access to both development and production. The programmers have the ability to implement changes in code in production without monitoring or quality assurance. This is a deficiency in which area?
Management override
Data integrity
Computer operations
Change control
Change control
Programmers who have access to both instructions and live data can undermine management's control of data and their ability to verify that all changes have been performed in a manner consistent with their instructions.
Example Question #3 : Cpa Business Environment And Concepts (Bec)
Of the following positions, which best describes the nature of a company's Board of Directors in relation to the company?
Representative
Agent
Executive
Fiduciary
Fiduciary
A company's board of directors has a fiduciary duty to act on behalf of and in the best interest of a corporation.
Example Question #4 : Cpa Business Environment And Concepts (Bec)
According to COSO, which of the following is included in the assess and report phase of an effective approach to monitoring internal controls?
Prioritize findings
Identify controls
Tone at the top
Prioritize risks
Prioritize findings
Findings result from monitoring internal controls.
Example Question #5 : Cpa Business Environment And Concepts (Bec)
The Treadway Commission was established by:
Private sponsoring organizations
SOX 2002
The SEC
The Treadway Foundation
Private sponsoring organizations
The COSO was an independent private sector initiative.
Example Question #6 : Corporate Governance
Of the following components, which would not be included in Risk Assessment activities?
Consider the potential for fraud
Identify and assess changes
These are all included
Specify objectives
These are all included
All of these components are required when conducting Risk Assessment under the COSO framework.
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