Certified Financial Services Auditor v5.0 (IIA-CFSA)

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Total 519 questions

A client makes the following statement: If you make us put property tags and numbers on major equipment, next we will have to put tags on every pen, pencil, and paper clip in the place. This is the argument that if a particular action is taken, it will inevitably lead to another, less desirable action. We may call this:

  • A. Slippery slope
  • B. Hasty generalization
  • C. False use of authority
  • D. Ad Hominem


Answer : A

After implementation of a drop out recovery program, employment rate rose. The drop out recovery program is responsible for increases in employment and look for possible economic or other factors that might have contributed to the rise. This example may be referred towards:

  • A. Post Hoc, Ergo Propter Hoc
  • B. Ad Hominem
  • C. Non Sequiter
  • D. False use of authority


Answer : A

For Example one exception in 1000 cases is probably not the reason enough to recommend overhauling the entire system, although the final answer must be derived from the context and the condition of the related control system. Which one of the following statements is clearly supported by this example?

  • A. Auditors should base findings and recommendations on significant information
  • B. Auditors should be aware of that the concept of materiality and significance take on different meanings in the public and private sectors
  • C. Both of these
  • D. None of these


Answer : A

A manager of a very controversial program may have stolen only $200, but the controversy and public accountability aspects may make the 200 significant, where it would not be material private sector financial statement opinion audit. It means:

  • A. Auditors should be aware that the concepts of materiality and significance take on different meanings in the public and private sector
  • B. During the planning and reporting processes, government auditors may need to consider qualitative factors such as the visibility of the program under audit, or the newness of the program or changes in its condition
  • C. Both of these
  • D. None of these


Answer : C

Audit evidence:

  • A. Is sufficient when it is factual and would convince an informed person to reach the sameconclusion
  • B. Is competent if it consistently produces the same outcomes
  • C. Is relevant when it is directly related to audit comments, recommendations and conclusions
  • D. All of these


Answer : D

Data gathering and evaluation during field work includes:

  • A. Gaining and understanding of the activity, system, or process under review
  • B. Observing conditions and operations
  • C. Interviewing people and examining assets and accounting, and other operational business, and other operational records.
  • D. All of these


Answer : D

Compliance testing is designed primarily to:

  • A. Hold detection risk to an acceptable level
  • B. Determine whether policies and procedures have been followed
  • C. Determine that account balances exit, are accurate, and are properly classified
  • D. Provide evidence about monetary misstatements


Answer : B

Which one of the following is NOT an indicator of control weakness in derivatives?

  • A. Application of inappropriate valuation models
  • B. Management not involved
  • C. Evidence of a “Star Manager” syndrome
  • D. Absence of fiduciary mentality


Answer : A

Major categories of loans include all of the following EXCEPT:

  • A. Commercial loans
  • B. Residential loans
  • C. Consumer loans
  • D. Agricultural loans


Answer : D

__________ allows businesses that sell durable goods such as auto-mobiles to finance inventories. As the business sells goods, the loan advance against those goods is repaid.

  • A. Term loans
  • B. Consumer loans
  • C. Installment loans
  • D. Floor-plan financing


Answer : D

Common type/s of installment loans is/are:

  • A. Credit card loans
  • B. Residential loans
  • C. Mortgage loans
  • D. All of these


Answer : C

Types of commercial loans are /are:

  • A. Installment loans
  • B. Floor plan financing
  • C. Asset-based financing
  • D. Both B and C


Answer : D

Management of the lending institution sets a reserve for loan losses at a given point based onsuch factors as mentioned below EXCEPT:

  • A. Number and type of loans made
  • B. Quality of loans made
  • C. Historical loss experience
  • D. Loan portfolio


Answer : D

If more funds than expected are needed to cover loans losses in a given period, the reserve must be increased and the difference is charged to:

  • A. Administration expenses
  • B. Prepaid assets
  • C. Operating expenses
  • D. Loan expenses


Answer : C

When a loan becomes delinquent or when collection seems unlikely, banks often suspend:

  • A. Accrual of interest
  • B. Deferral of interest
  • C. Loan losses
  • D. Loan prepayments


Answer : A

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Total 519 questions