Exam IIA-CIA-Part1 Topic 9 Question 66 Discussion

Actual exam question for IIA's IIA-CIA-Part1 exam
Question #: 66
Topic #: 9

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:
Department
Risk Factor
A
B
C
Control structure
9
5
7
Nature of assets in department
2
7
9
Dollar value of assets
6
6
8
Complexity of transactions
3
4
8
Which of the following statements regarding risk in the departments is true?

A. 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. B. 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. C. 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. D. The relative ranking of the departments in order of their risk, from greatest to least risk, is: A; C; B.

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