Certified Government Auditing Professional (CGAP) Practice Exam 2025 – The All-in-One Guide to Exam Success

The observation that management has taken corrective action to resolve past audit observations indicates a proactive approach to addressing weaknesses in asset safeguarding. In the context of internal controls, it is essential for management to not only recognize issues identified in previous audits but also to take steps to mitigate these weaknesses. By implementing corrective actions based on prior findings, management demonstrates a commitment to improving control measures, which is vital in safeguarding assets.

When controls are weak or ineffective, it can lead to mismanagement, loss, or theft of assets. Therefore, a management team that actively resolves audit findings is typically improving the overall control environment. This includes ensuring that policies and procedures are followed, reinforcing the importance of compliance, and creating an atmosphere of accountability regarding asset management.

In contrast, being well located, conducting background checks, or lacking access to performance reports do not directly point to the effectiveness of control measures concerning asset safeguarding. These factors may affect operational efficiency or compliance with procedures but do not inherently represent control weaknesses over asset safeguarding specifically. Thus, while they are relevant to the overall governance framework, they do not provide as clear an indicator of the strength or weakness of controls in asset safeguarding as the proactive correction of past deficiencies does.