CA Foundation Business Economics Questions 2023 - Part 32
Fri, 03 Mar 2023
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CRISC—Certified in Risk and Information Systems Control Certification Questions and answer - Part 44
1. Which of the following is a technique that provides a systematic description of the combination of unwanted occurrences in a system?
A) Sensitivity analysis
B) Scenario analysis
C) Fault tree analysis
D) Cause and effect analysis
2. What is the process for selecting and implementing measures to impact risk called?
A) Risk Treatment
B) Control
C) Risk Assessment
D) Risk Management
3. Which section of the Sarbanes-Oxley Act specifies 'Periodic financial reports must be certified by CEO and CFO'?
A) Section 302
B) Section 404
C) Section 203
D) Section 409
4. What is the PRIMARY need for effectively assessing controls?
A) Control's alignment with operating environment
B) Control's design effectiveness
C) Control's objective achievement
D) Control's operating effectiveness
5. You work as the project manager for Bluewell Inc. There has been a delay in your project work that is adversely affecting the project schedule. You decide, with your stakeholders' approval, to fast track the project work to get the project done faster. When you fast track the project, what is likely to increase?
A) Human resource needs
B) Quality control concerns
C) Costs
D) Risks
A) Sensitivity analysis
B) Scenario analysis
C) Fault tree analysis
D) Cause and effect analysis
2. What is the process for selecting and implementing measures to impact risk called?
A) Risk Treatment
B) Control
C) Risk Assessment
D) Risk Management
3. Which section of the Sarbanes-Oxley Act specifies 'Periodic financial reports must be certified by CEO and CFO'?
A) Section 302
B) Section 404
C) Section 203
D) Section 409
4. What is the PRIMARY need for effectively assessing controls?
A) Control's alignment with operating environment
B) Control's design effectiveness
C) Control's objective achievement
D) Control's operating effectiveness
5. You work as the project manager for Bluewell Inc. There has been a delay in your project work that is adversely affecting the project schedule. You decide, with your stakeholders' approval, to fast track the project work to get the project done faster. When you fast track the project, what is likely to increase?
A) Human resource needs
B) Quality control concerns
C) Costs
D) Risks
1. Right Answer: C
Explanation: Fault tree analysis (FIA) is a technique that provides a systematic description of the combination of possible occurrences in a system, which can result in an undesirable outcome. It combines hardware failures and human failures.Incorrect Answers:A: Sensitivity analysis is the quantitative risk analysis technique that:Assist in determination of risk factors that have the most potential impact Examines the extent to which the uncertainty of each element affects the object under consideration when all other uncertain elements are held at their baseline valuesB: This analysis provides ability to see a range of values across several scenarios to identify risk in specific situation. It provides ability to identify those inputs which will provide the greatest level of uncertainty.D: Cause-and-effect analysis involves the use of predictive or diagnostic analytical tool for exploring the root causes or factors that contribute to positive or negative effects or outcomes. These tools also help in identifying potential risk.
2. Right Answer: A
Explanation: The process for selecting and implementing measures for impacting risk in the environment is called risk treatment.Incorrect Answers:C: The process of analyzing and evaluating risk is called risk assessment.D: Risk management is the coordinated activities for directing and controlling the treatment of risk in the organization.
3. Right Answer: A
Explanation: Section 302 of the Sarbanes-Oxley Act requires corporate responsibility for financial reports to be certified by CEO, CFO, or designated representative.Incorrect Answers:B: Section 404 of the Sarbanes-Oxley Act states that annual assessments of internal controls are the responsibility of management.C: Section 203 of the Sarbanes-Oxley Act requires audit partners and review partners to rotate off an assignment every five years.D: Section 409 of the Sarbanes-Oxley Act states that the financial reports must be distributed quickly and currently.
4. Right Answer: C
Explanation: Controls can be effectively assessed only by determining how accurately the control objective is achieved within the environment in which they are operating. No conclusion can be reached as to the strength of the control until the control has been adequately tested.Incorrect Answers:A: Alignment of control with the operating environment is essential but after the control's accuracy in achieving objective. In other words, achieving objective is the top most priority in assessing controls.B: Control's design effectiveness is also considered but is latter considered after achieving objectives.D: Control's operating effectiveness is considered but after its accuracy in objective achievement.
5. Right Answer: D
Explanation: Fast tracking allows entire phases of the project to overlap and generally increases risks within the project.Fast tracking is a technique for compressing project schedule. In fast tracking, phases are overlapped that would normally be done in sequence. It is shortening the project schedule without reducing the project scope.Incorrect Answers:A: Human resources are not affected by fast tracking in most scenarios.B: Quality control concerns usually are not affected by fast tracking decisions.C: Costs do not generally increase based on fast tracking decisions.
Explanation: Fault tree analysis (FIA) is a technique that provides a systematic description of the combination of possible occurrences in a system, which can result in an undesirable outcome. It combines hardware failures and human failures.Incorrect Answers:A: Sensitivity analysis is the quantitative risk analysis technique that:Assist in determination of risk factors that have the most potential impact Examines the extent to which the uncertainty of each element affects the object under consideration when all other uncertain elements are held at their baseline valuesB: This analysis provides ability to see a range of values across several scenarios to identify risk in specific situation. It provides ability to identify those inputs which will provide the greatest level of uncertainty.D: Cause-and-effect analysis involves the use of predictive or diagnostic analytical tool for exploring the root causes or factors that contribute to positive or negative effects or outcomes. These tools also help in identifying potential risk.
2. Right Answer: A
Explanation: The process for selecting and implementing measures for impacting risk in the environment is called risk treatment.Incorrect Answers:C: The process of analyzing and evaluating risk is called risk assessment.D: Risk management is the coordinated activities for directing and controlling the treatment of risk in the organization.
3. Right Answer: A
Explanation: Section 302 of the Sarbanes-Oxley Act requires corporate responsibility for financial reports to be certified by CEO, CFO, or designated representative.Incorrect Answers:B: Section 404 of the Sarbanes-Oxley Act states that annual assessments of internal controls are the responsibility of management.C: Section 203 of the Sarbanes-Oxley Act requires audit partners and review partners to rotate off an assignment every five years.D: Section 409 of the Sarbanes-Oxley Act states that the financial reports must be distributed quickly and currently.
4. Right Answer: C
Explanation: Controls can be effectively assessed only by determining how accurately the control objective is achieved within the environment in which they are operating. No conclusion can be reached as to the strength of the control until the control has been adequately tested.Incorrect Answers:A: Alignment of control with the operating environment is essential but after the control's accuracy in achieving objective. In other words, achieving objective is the top most priority in assessing controls.B: Control's design effectiveness is also considered but is latter considered after achieving objectives.D: Control's operating effectiveness is considered but after its accuracy in objective achievement.
5. Right Answer: D
Explanation: Fast tracking allows entire phases of the project to overlap and generally increases risks within the project.Fast tracking is a technique for compressing project schedule. In fast tracking, phases are overlapped that would normally be done in sequence. It is shortening the project schedule without reducing the project scope.Incorrect Answers:A: Human resources are not affected by fast tracking in most scenarios.B: Quality control concerns usually are not affected by fast tracking decisions.C: Costs do not generally increase based on fast tracking decisions.
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