New Risk Based Audit Approach

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| By Markg23

Markg23

Community Contributor

Quizzes Created: 10 | Total Attempts: 2,734

Questions: 10 | Attempts: 143 | Updated: Mar 21, 2023

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Questions and Answers

1.

What are the first two columns in the ministry wide risk assessment project table (MWRAP)?
- A.
  
  Risks, controls
- B.
  
  Goals, risks
- C.
  
  Risks, fraud risk
- D.
  
  Risks, audit working papers
Correct Answer
B. Goals, risks

Explanation
The first two columns in the ministry wide risk assessment project table (MWRAP) are "goals" and "risks". This means that the table is structured to list the goals or objectives of the project in the first column, and then identify the associated risks or potential obstacles in the second column. This allows for a systematic analysis of the project's goals and the potential risks that may impact their achievement.

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2.

In terms of risk factors (e.g World Vision Lanka/Philippines), how many are there?
- A.
  
  10
- B.
  
  5
- C.
  
  8
- D.
  
  2
Correct Answer
A. 10

Explanation
The question is asking about the number of risk factors in terms of World Vision Lanka/Philippines. The correct answer is 10, indicating that there are 10 risk factors associated with World Vision Lanka/Philippines.

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3.
Why did Global Internal audit (GIA) decide to implement the new risk based audit approach?
1. To be in line with the Institute of Internal audit standards
2. To be aligned with World Vision’s strategic mandate and goals
3. To allocate audit’s limited resources to risks
4. To provide work for the GIA auditors and regional audit managers (RAMs)
- A.
  
  I, II, III and IV
- B.
  
  I and IV
- C.
  
  III only
- D.
  
  I, II and III
Correct Answer
D. I, II and III

Explanation
The Global Internal Audit (GIA) decided to implement the new risk-based audit approach for three main reasons. Firstly, it was to be in line with the Institute of Internal Audit standards, which are recognized best practices in the field. Secondly, it was to be aligned with World Vision's strategic mandate and goals, ensuring that the audit approach supports the organization's overall objectives. Lastly, the new approach aimed to allocate the limited resources of the audit department to the areas of highest risk, ensuring that audits are focused on the most critical areas.

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4.

In World Vision Lanka’s presentation, what is the risk factor with the highest weighting?
- A.
  
  Complexity of the program
- B.
  
  Donor interest and expectation
- C.
  
  Project internal controls
- D.
  
  Results of prior audit results
Correct Answer
B. Donor interest and expectation

Explanation
The risk factor with the highest weighting in World Vision Lanka's presentation is donor interest and expectation. This means that the organization considers the expectations and interests of donors as the most significant risk factor in their program. They recognize that meeting the expectations of donors is crucial for the success of their projects.

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5.

Based on the new risk based audit approach, the audit plan is now determined by:
- A.
  
  The WVI FFM Internal audit frequency policy
- B.
  
  Prioritized areas based on the most critical risk
- C.
  
  Prior audit findings
- D.
  
  Management
Correct Answer
B. Prioritized areas based on the most critical risk

Explanation
The new risk based audit approach determines the audit plan by prioritizing areas based on the most critical risk. This means that the areas that pose the highest risk to the organization will be given priority in the audit plan. This approach ensures that resources are allocated to areas that are most in need of attention and helps to mitigate potential risks. By focusing on the most critical risk areas, the audit plan can effectively address and mitigate any potential issues that may arise.

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6.

What is the definition of risk? I) chance of something that will have an impact on objectives II) effect of uncertainty on objectives III) combination of the probability of an event and its consequences IV) probability that an event will occur and adversely affect the achievement of objectives
- A.
  
  I, II, III and IV
- B.
  
  I and IV only
- C.
  
  II only
- D.
  
  I, II and III
Correct Answer
A. I, II, III and IV

Explanation
The definition of risk encompasses all four statements. Risk is the chance of something happening that will have an impact on objectives. It is also the effect of uncertainty on objectives, as uncertainty creates the potential for risk. Risk is a combination of the probability of an event occurring and the consequences it may have. Finally, risk is also the probability that an event will occur and negatively affect the achievement of objectives. Therefore, all four statements accurately describe the definition of risk.

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7.

Based on Standard and Poor ( a rating agency), what are the four main types of risk? I) Environmental II) Financial III) Management IV) Reputation V) Supply
- A.
  
  I, II, III and IV
- B.
  
  II and III only
- C.
  
  IV only
- D.
  
  I, II and III and V
Correct Answer
D. I, II and III and V

Explanation
The correct answer is I, II, III, and V. This is based on the information provided that Standard and Poor, a rating agency, identifies four main types of risk: environmental, financial, management, and supply. Therefore, the correct answer includes all four types mentioned.

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8.

Compared with WV India and Sri Lanka’s presentations, the Philippines audit department determined their audit universe by looking at:
- A.
  
  Local office ministry strategy
- B.
  
  PBAS
- C.
  
  Different sectors’ risk
- D.
  
  Last year’s audit plan
Correct Answer
A. Local office ministry strategy

Explanation
The Philippines audit department determined their audit universe by looking at the local office ministry strategy. This means that they considered the strategic goals and objectives of the local office ministry in order to identify the areas that needed to be audited. By aligning the audit universe with the local office ministry strategy, the audit department can ensure that their audits are focused on the areas that are most important for achieving the ministry's goals.

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9.

Impact of the risk identified (by WVDF – the Philippines) was measured by: I) Reputation II) $ III) Regulatory environment in the country IV) human poverty indicators.
- A.
  
  I, II, III and IV
- B.
  
  I and II only
- C.
  
  I only
- D.
  
  I, II and III
Correct Answer
B. I and II only

Explanation
The impact of the risk identified by WVDF in the Philippines was measured by reputation and financial impact ($). This means that the organization considered the potential damage to their reputation and the financial consequences that could arise from the identified risk. The other options, III and IV, are not included in the measurement of the risk's impact.

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10.

In terms of risk, what are the projects that have the highest risk, resulting in being audited every year?
- A.
  
  National office
- B.
  
  Cost allocation method (CAM)
- C.
  
  Sponsorship projects (ADPs)
- D.
  
  Government grants
Correct Answer
D. Government grants

Explanation
Government grants are considered to have the highest risk in terms of being audited every year. This is because government grants involve the allocation of public funds and are subject to strict regulations and accountability. The use of government grants must be carefully monitored to ensure that the funds are being used for their intended purpose and in compliance with the specified guidelines. As a result, organizations receiving government grants are often audited annually to ensure transparency and accountability in the use of these funds.

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New Risk Based Audit Approach

What are the first two columns in the ministry wide risk assessment project table (MWRAP)?

In terms of risk factors (e.g World Vision Lanka/Philippines), how many are there?

In World Vision Lanka’s presentation, what is the risk factor with the highest weighting?

Based on the new risk based audit approach, the audit plan is now determined by:

What is the definition of risk? I) chance of something that will have an impact on objectives II) effect of uncertainty on objectives III) combination of the probability of an event and its consequences IV) probability that an event will occur and adversely affect the achievement of objectives

Based on Standard and Poor ( a rating agency), what are the four main types of risk? I) Environmental II) Financial III) Management IV) Reputation V) Supply

Compared with WV India and Sri Lanka’s presentations, the Philippines audit department determined their audit universe by looking at:

Impact of the risk identified (by WVDF – the Philippines) was measured by: I) Reputation II) $ III) Regulatory environment in the country IV) human poverty indicators.

In terms of risk, what are the projects that have the highest risk, resulting in being audited every year?