QUESTION: 13

What is the difference between reasonable assurance and limited assurance?

Reasonable assurance is provided by external auditors as part of a financial audit and indicates conformity to suitable criteria and freedom from material error, while limited assurance results from reviews, compilations, and other activities performed by competent personnel who are sufficiently objective about the subject matter.
Reasonable assurance is provided by internal auditors as part of a risk assessment, while limited assurance results from external audits and regulatory examinations.
Reasonable assurance is provided by the Board of Directors as part of governance activities, while limited assurance results from employee self-assessments.
Reasonable assurance is provided by management as part of strategic planning, while limited assurance results from operational reviews and performance evaluations.

Answer(s): A

Explanation:

The primary distinction between reasonable assurance and limited assurance lies in the level of confidence and the scope of procedures performed.

Reasonable Assurance:

Provides a high level of confidence that the subject matter is free from material misstatement.

Typically offered in external audits, such as financial audits, where auditors perform extensive procedures to validate conformity with established criteria.

Limited Assurance:

Offers a moderate level of confidence based on less rigorous procedures (e.g., inquiries and analytical reviews).

Common in reviews and compilations, often performed by internal or external personnel with sufficient expertise.

Key Differences:

Reasonable assurance requires more evidence and detailed testing.

Limited assurance is less comprehensive but still provides an informed opinion.

Reference:

International Auditing Standards (ISA 200): Explains assurance levels and their requirements.

COSO Framework: Highlights the application of assurance in governance and risk management.

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QUESTION: 14

In the context of GRC, which is the best description of the role of assurance in an organization?

Allocating financial resources and evaluating their use to manage the organization's budget better.
Providing the governing body with opinions on how well its objectives are being met based on expertise and experience.
Designing and monitoring the organization's information technology systems to be accurate and reliable so management can be assured of meeting established objectives.
Objectively and competently evaluating subject matter to provide justified conclusions and confidence.

Answer(s): D

Explanation:

The role of assurance in an organization is to objectively evaluate various subject matters to provide reliable conclusions and build confidence among stakeholders.

Objective Evaluation:

Assurance providers use established standards to impartially assess processes, controls, and systems.

Justified Conclusions:

Conclusions are based on evidence gathered through audits, reviews, or evaluations.

Stakeholder Confidence:

Assurance activities ensure stakeholders can trust that objectives are being met and risks are managed effectively.

Reference:

IIA Standards: Emphasizes objectivity and competence in assurance activities.

ISO 19011: Provides guidelines for auditing management systems.

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QUESTION: 15

In the context of assurance activities, what does the term "assurance objectivity" refer to?

To the degree to which an Assurance Provider can adhere to industry standards and best practices in performing audits.
To the degree to which an Assurance Provider can provide accurate and reliable information to stakeholders on which they can form an opinion about the subject matter themselves.
The degree to which an Assurance Provider can be impartial, disinterested, independent, and free to conduct necessary activities to form an opinion about the subject matter.
To the degree to which an Assurance Provider can minimize costs and maximize efficiency in performing audits.

Answer(s): C

Explanation:

Assurance Objectivity refers to the assurance provider's ability to maintain independence and impartiality in evaluating subject matter.

Impartiality:

Assurance providers must remain unbiased and free from conflicts of interest to ensure their conclusions are trustworthy.

Independence:

Assurance activities should be conducted independently of the area or individuals being evaluated.

Conduct of Activities:

The assurance provider must have the freedom to perform all necessary procedures to evaluate the subject matter comprehensively.

Reference:

IIA Standards (Independence and Objectivity): Highlights the importance of maintaining objectivity in internal audit and assurance activities.

ISO 19011: Reinforces objectivity as a core principle in auditing practices.

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QUESTION: 16

What are key compliance indicators (KCIs) associated with?

Number of non-compliance events investigated
The level of employee training and understanding of requirements
The impact of environmental and social initiatives
The degree to which obligations and requirements are addressed

Answer(s): D

Explanation:

Key Compliance Indicators (KCIs) are metrics that evaluate how well an organization meets its legal, regulatory, and policy-based obligations.

Obligations and Requirements:

KCIs measure the effectiveness of compliance programs by tracking adherence to regulations,

standards, and internal policies.

Examples of KCIs:

Percentage of compliance with mandatory training completion.

The number of corrective actions implemented after audits.

Adherence to environmental, safety, or industry-specific standards.

Why Other Options Are Incorrect:

A (Non-compliance events): Measures failures, not compliance effectiveness.

B (Training): Is one of many components but not the overall measure.

C (Environmental initiatives): Relates to sustainability metrics, not compliance.

Reference:

ISO 37301 (Compliance Management Systems): Highlights KCIs as a tool for measuring adherence to compliance obligations.

COSO Framework: Stresses the importance of monitoring compliance through KPIs and KCIs.

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Free OCEG GRCP Exam Questions (page: 5)

QUESTION: 13

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QUESTION: 14

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QUESTION: 15

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QUESTION: 16

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