Application Questions, Answers & Explanations

24. You have decided that a Control Self-Assessment process, a control by itself, will be the best tool for the business situation you are addressing. The first step in developing this control process should be to:

a.   set standards.
b.   compare the actual results with the desired results.
c.   evaluate a cost-benefit analysis and determine the relative costs of alternative controls.
d.   determine the objectives.

This question goes back to the basic business concepts: objectives, risks, and controls. Control Self-Assessment is a control task. Therefore, the objectives need to be considered first. Setting standards, comparing actual results with desired results, and evaluating the cost-benefit analysis are valid tasks in a Control Self-Assessment process. However, these should be addressed after the objectives of the Control Self-Assessment process have been identified, agreed upon, and are being addressed.

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Note: The question, answer, and expanation above is one of the 102 in all 3 production versions.