{"id":130403,"date":"2023-12-14T05:41:52","date_gmt":"2023-12-14T05:41:52","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=130403"},"modified":"2023-12-14T05:41:54","modified_gmt":"2023-12-14T05:41:54","slug":"arm-400-risk-in-an-evolving-world-exam-practice-questions-and-verified-answers-100-correct-grade-a-latest-2023-2024-update","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2023\/12\/14\/arm-400-risk-in-an-evolving-world-exam-practice-questions-and-verified-answers-100-correct-grade-a-latest-2023-2024-update\/","title":{"rendered":"ARM 400: Risk in an Evolving World Exam | Practice Questions and Verified Answers| 100% Correct| Grade A (Latest 2023\/ 2024 Update)"},"content":{"rendered":"\n

ARM 400: Risk in an Evolving World Exam | Practice Questions and Verified Answers| 100% Correct| Grade A (Latest 2023\/ 2024 Update)<\/p>\n\n\n\n

ARM 400: Risk in an Evolving World Exam |
Practice Questions and Verified Answers|
100% Correct| Grade A (Latest 2023\/ 2024
Update)
Q: The Committee of Sponsoring Organizations of the Treadway Commission (COSO)
describes internal control as consisting of five essential components, one of which is risk
assessment. This component
Select one:
A. Verifies adherence to control results and assists in identifying other procedures that the entity
may wish to adopt.
B. Should be included in the audit as an internal control to minimize unforeseen events.
C. Considers management’s efforts to identify and analyze risks relevant to achieving
predetermined objectives.
D. Sets the tone for internal control by providing resources, discipline, and structure.
Answer:
C. Considers management’s efforts to identify and analyze risks relevant to achieving
predetermined objectives.
Q: Which one of the following best describes an effective way to construct internal controls?
Select one:
A. The controls should be linear and create checks and balances.
B. The controls should be system based with oversight by one or two individuals.
C. The controls should lend themselves to true risk management concerns.
D. The controls should be quantitative and include segregation and transfer options.
Answer:
A. The controls should be linear and create checks and balances.
Q: Which one of the following statements is true with regard to the application of emerging
technologies such as artificial intelligence and machine learning to internal auditing of an
organization?
Select one:<\/p>\n\n\n\n

A. Deviations from desired practices and procedures will be more quickly identified by emerging
technologies, and auditors can focus on designing and implementing new systems.
B. There should be no improvement given that the same practices are subject to internal audit
with or without the application of emerging technology.
C. Although such techniques are applicable to the risk management function, they are not
applicable to internal audit.
D. While the application of such technologies may be beneficial, the cost of implementation
makes the use of emerging technologies unrealistic.
Answer:
A. Deviations from desired practices and procedures will be more quickly identified by
emerging technologies, and auditors can focus on designing and implementing new systems.
Q: Which one of the following best describes how internal audit compliments a risk
management initiative?
Select one:
A. Risk managers identify, assess and prioritize risks. Internal audit develops a risk-based
auditing plan that addresses material risks to an organization.
B. Internal audit tests the controls initiated by the risk management team. The risk management
team reviews the results and responds to internal audit on the control assessment.
C. Internal audit tests controls for risks identified by risk managers. Risk management and
internal audit are similar in that they are both charged with protecting the assets of an
organization.
D. Risk managers identify, assess and prioritize risks with the assistance of internal audit.
Internal audit requires that the controls for the risks are tested.
Answer:
A. Risk managers identify, assess and prioritize risks. Internal audit develops a risk-based
auditing plan that addresses material risks to an organization.
Q: Colossal Casualty Insurance Company decided to conduct an internal audit of the company’s
operations. As part of the internal audit, several fictitious claims were submitted to the claims
department to see if the claims would be approved and paid. Which one of the Committee of
Sponsoring Organizations of the Treadway Commission’s (COSO’s) components of internal
control was examined by this internal audit test?
Select one:
A. Risk assessment.
B. Monitoring activities.
C. Information and communication.
D. Control environment.<\/p>\n\n\n\n

Answer:
D. Control environment.
Q: A risk-based auditing approach is deemed to be a top-down approach because
Select one:
A. It involves review of the current financial controls and compliance to regulations as
determined by external auditors.
B. It involves identifying and analyzing material risks to the achievement of the organization’s
objectives and then determining how the risks should be managed.
C. It involves review of each department’s dependence on financial controls, compliance with
federal statutes and audit history.
D. It involves an external review of known potential threats to the organization and then
developing an organizational response to those threats.
Answer:
B. It involves identifying and analyzing material risks to the achievement of the organization’s
objectives and then determining how the risks should be managed.
Q: Martin Pruitt was hired by Regional Bank Company (RBC) to strengthen the company’s
internal control efforts. Martin implemented a computer scanning program to detect fraud. The
scanning program flagged a suspicious account. When Martin investigated the account, he
learned that someone in the bank’s technology department had created the account. When the
bank credits monthly interest on depositor accounts, any fractional cents are rounded-down to the
nearest cent. The technology department official programmed the system so that any fractional
cents lost due to rounding were deposited to the account owned by the technology department
official. The scanning program Martin Pruitt implemented used computers to learn from the data
analyzed. This application of emerging technology illustrates the use of
Select one:
A. Machine learning.
B. Risk management information systems.
C. Computer simulation.
D. Artificial intelligenc
Answer:
A. Machine learning.<\/p>\n\n\n\n

Q: Which one of the following statements regarding the structure and role of a board of
directors is true?
Select one:
A. The board of directors must be comprised of ten directors, with an equal number of inside and
outside directors.
B. The board is responsible for the day-to-day decisions at a corporation.
C. Members of the board are appointed by the president of the company.
D. Members of the board elect a director to be chairman of the board.
Answer:
D. Members of the board elect a director to be chairman of the board.
Q: Which one of the following statements is true regarding separation of ownership and control
in corporations?
Select one:
A. The incentive for managers and non-management board members to pursue their own
interests at the expense of shareholders gives rise to agency costs.
B. Corporate governance is not concerned with the separation of ownership and control.
C. Shareholders retain decision-making authority while managers control business operations.
D. Limited liability of shareholders impedes the separation of ownership and control in
corporations.
Answer:
A. The incentive for managers and non-management board members to pursue their own
interests at the expense of shareholders gives rise to agency costs.
Q: The board of directors must use a thorough understanding of the organization’s overall risk
philosophy to determine the amount of risk the organization is willing to seek or accept in the
pursuit of long-term objectives. This amount of risk is called the organization’s
Select one:
A. Maximum possible loss.
B. Retention level.
C. Risk appetite.
D. Probable maximum loss.
Answer:
C. Risk appetite.
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\"ARM<\/figure>\n","protected":false},"excerpt":{"rendered":"

ARM 400: Risk in an Evolving World Exam | Practice Questions and Verified Answers| 100% Correct| Grade A (Latest 2023\/ 2024 Update) ARM 400: Risk in an Evolving World Exam |Practice Questions and Verified Answers|100% Correct| Grade A (Latest 2023\/ 2024Update)Q: The Committee of Sponsoring Organizations of the Treadway Commission (COSO)describes internal control as consisting […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-130403","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/130403","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=130403"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/130403\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=130403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=130403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=130403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}