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Practice CPA®CPA ISC Practice Exam 4Question 82

Hard1 markMultiple Choice

Area I: Information SystemsCOSORisk AssessmentArea I

CPA · Question 82 · Area I: Information Systems

An auditor is reviewing the 'Risk Assessment' component of COSO. Which of the following is a prerequisite for risk assessment?

Answer options:

A.

Monitoring activities

B.

Establishing objectives

C.

Control activities

D.

Information and communication

How to approach this question

You can't have a risk unless you have a goal. Risk = Uncertainty on objectives.

Full Answer

B.Establishing objectives✓ Correct

Establishing objectives

According to COSO, objectives must be established before management can identify and assess risks to their achievement.

Common mistakes

Thinking controls come before risk assessment.

Question 81 All questions

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