IIA-CFSA Exam Practice Test Instant Access

Question 1

Some objectives of an audit related to mutual funds might include determining that:

AMutual fund checks are issued in accordance with firm policies and supported by valid trades

BMutual fund purchases are confirmed on a timely basis

CMutual fund switches are not authorized by the client

DAll EXCEPT ''C''

Answer : D

Question 2

Customer accounts:

Ensure that the firm is exercising due diligence in the opening and supervision of customer accounts. The procedures should be formalized in writing and in accordance with the rules and regulations of the appropriate regulatory authority.

Ensure that daily customer positions and option exercises are in accordance with the limits established by the appropriate exchange. Verify that commissions generated by customer trades are properly calculated and posted to the general ledger.

AThis is one of the primary audit objectives of stock and options

BThis is one of the primary audit objectives of swaps

CThis is one of the primary audit objectives of bonds

DNone of these

Answer : A

Question 3

Adequate procedures and controls associated with swap transactions should exist to help minimize the risks inherent in transaction process. Example/s of these controls may include:

AA daily reconciliation of traders' positions should be performed

BTo minimize market risk in hedge transactions:
There should be independent sign-off procedures for hedging models
All hedge strategies should be clearly defined
All software and products should be secure and temper resistant

CAll transactions should be authorized and affirmed

DAll of these

Answer : D

Question 4

The main objective/s of an audit of swaps is/are:

ATo determine the adequacy and effectiveness of controls relating to rate swap transactions

BTo ascertain that swap transaction are properly recorded in accordance with their term

CTo ensure that the company's financial statements and regulatory reports properly reflect in accordance with generally accepted accounting principles, the results of swap activity

DAll of these

Answer : D

Question 5

Standard and poor's 500 index, the Dow Jones Industrial average, or the Toronto stock Exchange index is the examples of:

AEquity indices

BStock exchange indices

COTC market indices

DAll of these

Answer : A

Question 6

I- Surrender Changes

II- Mortality and Expense risk change

III- Administrative Fees

IV- Underlying funds expenses

V- Fees charges for other features

These are the charges which investors pay when they invest in:

AVariable annuity

BFixed annuity

CMixed annuity

DBoth B & C depends upon situation

Answer : A

Question 7

The benefits of tax deferral will out weigh the costs of a variable annuity only if the investor

holds it as:

ALong-Term investment

BShort-Term investment

CCredit-Risk investment

DAnnuity investment

Answer : A

IIA-CFSA Certified Financial Services Auditor CFSA Exam Practice Test