Exam IIA-CIA-Part2 topic 3 question 22 discussion

Actual exam question from IIA's IIA-CIA-Part2

Question #: 22
Topic #: 3

A bank uses a risk analysis matrix to quantify the relative risk of auditable entities. The analysis involves rating auditable entities on risk factors using a scale of 1 to 10, with 10 representing the greatest risk. A partial list of risk factors and the ratings given to three of the bank's departments is provided below:

Which of the following statements regarding risk in the department is true?

A. As compared to departments A and C, department B has a stronger control system to compensate for the greater complexity of the department's transactions and dollar value of its assets.
B. The internal audit activity should schedule audits of department B more often than audits of department C because of the relative control strength of department C as compared to department B.
C. The nature of department A's control structure may be justified by the nature of the department's assets and the complexity of its transactions.
D. The relative ranking of the departments in order of their risk, from greatest to least risk, is: A; C; B.

Show Suggested Answer

Suggested Answer: C 🗳️

by wiseminosse at Sept. 27, 2020, 4:41 p.m.

Comments

Submit Cancel

Yupar

1 year, 5 months ago

Since the risks in the nature of assets and complexity of transactions in Dept A are kind of low, there may be no need to have a strong control structure. Since there is no strong control structure, the risk is high in dept A regarding control structure.

upvoted 3 times