Question

Match the following definitions with the correct example:

A) control environment

B) monitoring

C) business process risk

D) information and communication

E) strategic risk

1. A member of upper management was fired for violating the company’s code of conduct

2. Reports documenting problems with production are forwarded to management

3. Competitors begin offering warranty coverage on products

4. Problems with our suppliers have resulted in lost sales because our stores were out of stock.

5. The internal audit group is testing the operating effectiveness of various internal control activities

Answer 1

A. Control environment - The internal audit group is testing the operating effectiveness of various internal control activities.

B. monitoring - A member of upper management was fired for voilating the company's code of conduct.

C. business process risk - Problems with our suppliers have resulted in lost sales because our stores were out of stock.

D. information and communication - Reports documenting problems with production are forwarded to management.

E. Strategic risk - Competitors begin offering warranty coverage on products.