Certified Government Auditing Professional (CGAP) Practice Exam

Which statement accurately describes risk management requirements for government auditors?

1. The audit organization's entire audit program must be justified and documented based on specific consideration of risks.

2. Auditors evaluate and document risk considerations similarly in all types of audits.

3. Auditors have a responsibility to assist the organization in monitoring their risk management system.

4. There are no differences between INTOSAI, GAGAS, and the Standards on this topic.

The correct answer is: Auditors have a responsibility to assist the organization in monitoring their risk management system.

Auditors have a crucial role in understanding and supporting an organization's risk management system. This involves not only assessing risks inherent in various processes and functions but also helping to ensure that risk management strategies are effectively monitored and evaluated. By assisting the organization in this capacity, auditors add value beyond compliance and provide insights that can enhance the organization's overall risk posture. In conducting audits, government auditors are expected to apply specific standards that require them to recognize and evaluate the risk management practices within the organization. This evaluation is essential for identifying areas where the organization can improve its risk management, thus supporting the overall governance structure. The other statements do not align with the primary focus of government auditors on risk management. For example, while it is important for audit organizations to justify and document their audit programs, this requirement is not as overarching as suggested. Additionally, the risk considerations in audits may vary based on the type of audit due to differences in objectives and contexts, and there are indeed distinctions between international standards and government auditing standards regarding risk management requirements.