IIA-CFSA Online Practice Questions and Answers

The scope of an audit defines the boundaries of the audit by addressing such items as the audit period or number of locations to be reviewed.. Some important considerations when defining the scope of an audit include:

A. Needs of potential users of the audit reportB Preliminary judgment about materiality levels

B. Both A and B

C. None of the above

Standards related to information technology are not as well-developed or universally accepted as standards in some other audit areas. Financial statements that are fairly presented meet the following ____________: Generally accepted accounting principles are used Appropriate accounting principles are used Financial statements address matters that may affect their use or interpretation Financial statements classify and summarize information in a reasonable manner Financial statements reflect underlying transactions and events in a way that facilitates the presentation of the financial position, results of operation , and cash flows

A. Limitations

B. Guidelines

C. Objective controls

D. Processing controls

Stockholders are generally allowed one vote per share held. As a result, individuals who hold large blocks of share are more likely to be board members. Which of the following are out of the basic rights of stockholders?

A. Proxy rights

B. Reorganization rights

C. Exception rights

D. Liquidation rights

A bond currently priced at $1,250 with a 10% nominal yield of $100 would have a current field of _____________. The same bond priced at $800 would have a current yield of __________.

A. 9%, 12.5%

B. 12.5%, 9%

C. 8%, 12.5%

D. 12.5%, 8%

Main areas within financial services are:

A. Banking

B. Stock Exchange

C. Operations

D. All of these

When a bank charges off a loan as a loss, it reduces an account called the"_____________"

A. Lease payable

B. Lease Expense

C. Allowance of loans and lease losses

D. Prepaid loans and lease

The term used to describe the process of raising funds through the sale of securities is called:

A. D. Securitizations

B. C. Securitizations

C. Securitizations and sales

D. Subprime loans

The federal open market committee (FOMC) board sets reserve requirements and shares the responsibility with the reserve banks for:

A. Interest rate policy

B. Premium policy

C. Discount rate policy

D. All of these

Insiders are generally barred from:

A. Short-Selling

B. Hedging

C. OTC

D. None of these

Pension plans that an Employer establishes for retired or disabled employees, regardless of whether an employee contributes, are known as:

A. Defined benefit plans

B. Guaranteed Pension benefits

C. Pre-Pension Schemes

D. None of the above

The primary regulatory entities of banking industry include:

A. Federal reserve system

B. Office of the comptroller of the currency

C. Federal deposit insurance Cooperation

D. All of these

Recent activities in the marketplace have caused your company to comply with requests from 50 percent of your policyholders to cancel their policies. The company complies and refunds them amounts due. Your audit of this should ensure these refunds were charged against what account?

A. Incurred but not reported (IBNR)

B. Unearned premium reserve

C. Goodwill

D. Allocation for uncollectible accounts

HMO (Health maintenance organization) must meet the specifications of the federal HMO act as well as meeting many rules and regulations required at state level. There are following basic models EXCEPT:

A. Group model

B. Individual practice association

C. Network model

D. None of these

The trustee is responsible for producing a schedule of distribution which includes information as:

A. Assets and their current fair market value

B. The method of distribution

C. Each beneficiary's share of assets and the trust's liability

D. All of these

Close-end funds:

A. Are not redeemable

B. The investment portfolios generally are managed by separate entities

C. Are permitted to invest in a greater amount of "illiquid" securities than mutual funds.

D. All of these