IIA-CIA-Part1 VCE Exam Download

A detective control is designed to identify and correct errors or irregularities that have occurred. A compliance specialist conducting quarterly reviews fits this definition as it involves monitoring and detecting non-compliance issues after they have occurred, allowing for corrective actions to be taken. References:

COSO Internal Control Framework and the IIA ' s guidance on types of controls.

A responsibility of the internal audit activity as it relates to risk and risk management is evaluating and suggesting improvements to the risk management process. This role includes assessing the adequacy and effectiveness of the process in identifying, analyzing, and managing risks, as well as recommending improvements based on audit findings.

IIA Standards for the Professional Practice of Internal Auditing related to risk management.

Internal audit may provide advisory assistance in developing processes and controls, provided management retains responsibility for decisions and risk ownership. Helping a newly appointed manager understand appropriate controls can add value and strengthen governance, risk management, and control without necessarily impairing internal audit independence. However, internal audit must not determine the organization’s or operational area’s risk appetite, because establishing acceptable levels of risk is a management and governance responsibility. Option A is incomplete because it does not preserve this important boundary. Options B and D are too restrictive because internal audit is permitted to provide advisory services relating to process and control design when safeguards are maintained. Therefore, the CAE may assist the manager while clearly ensuring that risk ownership, risk appetite, final control decisions, and implementation responsibilities remain with management.

Risk evaluation involves analyzing identified risks to determine their significance. A formal technique that evaluates both the likelihood of a risk event and its potential consequences provides clear evidence that risk evaluation is occurring. Identifying sources, areas of impact, and potential events corresponds primarily to risk identification. Ranking risks according to relative importance is risk prioritization, which generally follows evaluation. Selecting avoidance, sharing, or controls represents risk treatment or response. Effective risk management therefore follows a logical progression: identify relevant risks, evaluate their likelihood and impact, prioritize them, and determine suitable responses. The Internal Audit Fundamentals material similarly identifies effective risk management as requiring organization-wide mechanisms for identification and adequate assessment of significant risks. Accordingly, option C specifically demonstrates that the risk evaluation element has been established.