Compliance Auditing CRAGE Practice Questions (Page 9)

Questions 41–45

1. 41application · medium

   A company has deployed an AI system for dynamic pricing. The regulatory landscape is uncertain, and new rules may be introduced. The compliance team wants to ensure they can adapt quickly. Which approach best supports continuous compliance monitoring?

   • AConduct a full audit only when a complaint is received.
   • BEstablish a regulatory watch process and a scheduled review of the AI system against any new requirements.
   • CWait for the regulator to notify the company of any new requirements.
   • DFreeze the AI system's configuration to avoid any changes that could affect compliance.
   Reveal Solution Discussion Select an answer first
2. 42foundation · easy

   What is the purpose of continuous compliance monitoring in AI governance?

   • ATo replace the need for periodic audits entirely
   • BTo automate all compliance decisions without human oversight
   • CTo ensure that compliance is maintained over time as regulations and systems evolve
   • DTo ensure that AI systems never change after deployment
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4. 43expert · hard

   An audit of an AI system for predictive maintenance found that the system does not log when it makes incorrect predictions, which is required for post-market monitoring. The organization has implemented a logging mechanism, but the auditor is concerned that the logs are not being reviewed. What is the most effective corrective action follow-up?

   • ATrain the maintenance team on how to use the logging system.
   • BConfirm that the logging mechanism is installed and close the finding.
   • CSchedule a re-audit in six months to check if the logs are being reviewed.
   • DVerify that the logging mechanism captures incorrect predictions and that there is a process for regularly reviewing the logs.
   Reveal Solution Discussion Select an answer first
5. 44application · medium

   An organization has received an audit finding that its AI-based loan approval system lacks a documented process for handling customer appeals. The corrective action plan has been implemented, and the audit team must verify its effectiveness. Which verification method is most appropriate?

   • ACheck that the corrective action plan has been marked as 'closed' in the tracking system.
   • BInterview the customer service team to ask if they are aware of the new appeals process.
   • CReview the new appeals process documentation and test it by submitting a sample appeal to confirm it is processed as designed.
   • DConfirm that the appeals process documentation has been approved by the compliance officer.
   Reveal Solution Discussion Select an answer first
6. 45application · medium

   A financial institution uses an AI system for credit risk assessment. New regulations are expected to be introduced in the next year that will require additional explainability for AI decisions. The institution wants to ensure continuous compliance. Which approach best supports sustained compliance?

   • AConduct a one-time comprehensive audit when the new regulations take effect.
   • BRely on the AI vendor's annual compliance certification to ensure the system remains compliant.
   • CEstablish a quarterly review process that monitors regulatory changes and assesses the AI system's compliance against the new requirements.
   • DWait for the regulator to issue guidance before making any changes to the AI system.
   Reveal Solution Discussion Select an answer first