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10. Which of the following is a technique used 16. Which method is commonly used in
to assess risk during the internal audit process? Enterprise Risk Management (ERM) to
quantify risks and their financial impact?
A. Forecasting
B. Root Cause Analysis A. Monte Carlo Simulation
C. Data Mining B. SWOT Analysis
D. Risk Heat Map C. Delphi Method
D. Balanced Scorecard
11. Which of the following risks can be classified
as a financial risk? 17. What is the difference between inherent
risk and residual risk?
A. Customer dissatisfaction
B. Foreign exchange fluctuations A. Inherent risk is the risk before controls,
C. Employee turnover and residual risk is the risk after controls are
D. Inventory turnover applied.

B. Inherent risk is controllable, and residual
12. Which of the following are key parameters of risk is uncontrollable.
risk assessment? C. Residual risk refers to operational risks

only.
A. Recency of the risk D. Inherent risk only applies to financial risks.
B. Impact of risk
C. Likelihood risks 18. In risk management, what is the purpose
D. Velocity of risk of a ‘risk appetite statement’?

13 Which of the following is a characteristic of an A. To quantify the maximum risk an
effective internal control system? organisation is willing to accept
B. To ensure no risks are taken in the
A. Reduction of potential frauds organisation
B. Alignment of processes with organisational goals C. To communicate external risks to
C. High cost of controls shareholders
D. Delegation of all responsibilities to junior D. To eliminate all operational risks
management
19. Which advanced tool can internal
14. What is a key advantage of conducting a risk- auditors use to analyse large datasets and
based audit? identify fraud

patterns?
A. Focuses solely on compliance
B. Reduces audit timelines A. Forensic techniques
C. Prioritises high-risk areas and allocates resources B. Predictive Analytics
effectively C. Manual Sampling
D. Guarantees error-free processes D. Risk Control Matrix

15. Which of the following is NOT part of the 20. Which of the following is a key challenge
internal audit function’s responsibility? in auditing an organisation’s cybersecurity

risk management framework?
A. Evaluating the effectiveness of risk management
practices A. Rapid evolution of cyber threats
B. Implementing the organisation’s strategic plan B. The complexity of financial reporting
C. Reviewing internal controls C. The limited availability of IT resources
D. Providing recommendations for process D. Decreased operational costs
improvement
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