Question

1. A major area of concern for companies is the risks surrounding the telecommunications networks that support many of today’s enterprises. T/F
2. In the United States, the American Society for Quality (ASQ), under its earlier name of American Society for Quality Control, played a leading role in setting standards and promoting best practices in quality control. T/F
3. The risk management function may identify governmental actions that may place some foreign country operations at risk. T/F
4. An important difference between an ERM function and internal audit is that the ERM group will usually go beyond just reviewing an area and making recommendations for subsequent follow-up. T/F
5. The last step in an auditing project is to create a detailed report that describes and summarizes the findings. T/F
6. Based on the overall payment history of all of its customers, an enterprise will establish an accounting reserve allowance for doubtful accounts to offset and estimate that a certain number of customers will never pay what they owe the company. T/F
7. Stakeholders at all levels of an enterprise need to be aware of some of the risks that the enterprise is facing, the consequences of those risk exposures, and some of the steps they can put in place to limit those risks. T/F
8. Due to the wide variety of internal and external risks that an enterprise can face at all levels, it is simple to build a comprehensive risk-oriented principles document that can be circulated throughout the entire enterprise. T/F
9. The Sarbanes-Oxley Act (Sox) mandates that the internal audit function must report to the audit committee. T/F
10. The ERM group in a company should identify and focus on significant areas in the enterprise with low levels of likelihood of occurrence. T/F

Answer 1

A major area of concern for companies is the risks surrounding the telecommunications networks that support many of today’s enterprises.

False
In the United States, the American Society for Quality (ASQ), under its earlier name of American Society for Quality Control, played a leading role in setting standards and promoting best practices in quality control. True
The risk management function may identify governmental actions that may place some foreign country operations at risk.

True

An important difference between an ERM function and internal audit is that the ERM group will usually go beyond just reviewing an area and making recommendations for subsequent follow-up.

True

The last step in an auditing project is to create a detailed report that describes and summarizes the findings.

False. The last step of auditing is check whether the changes recommended are properly implemented by the company or not.

Based on the overall payment history of all of its customers, an enterprise will establish an accounting reserve allowance for doubtful accounts to offset and estimate that a certain number of customers will never pay what they owe the company.

True

Stakeholders at all levels of an enterprise need to be aware of some of the risks that the enterprise is facing, the consequences of those risk exposures, and some of the steps they can put in place to limit those risks.

True

Due to the wide variety of internal and external risks that an enterprise can face at all levels, it is simple to build a comprehensive risk-oriented principles document that can be circulated throughout the entire enterprise.

False. Due to changing external environment it is quite difficult to build a comprehensive risk oriented principles document and it is preferable to keep analyzing the risk that might affect the organization.

The Sarbanes-Oxley Act (Sox) mandates that the internal audit function must report to the audit committee.

False. The SOX mandates the company and it's top managers to certify the accuracy of financial reports

The ERM group in a company should identify and focus on significant areas in the enterprise with low levels of likelihood of occurrence.

False. The ERM group should monitor detailed operations of the company minutely.