IIA-CFSA Online Practice Questions and Answers

The extent to which an organization has implemented controls to minimize the actual occurrences of the risk determines the vulnerability to the risk actually occurring, or the "_______"

A. Inherent Risk

B. Understanding Risk

C. Control Risk

D. Disguised Risk

Obtaining feedback from client management throughout the audit is encouraged in order to ensure that appropriate information is being obtained and to alleviate problems at the conclusions of the audit. Some specific components of continual communication to consider include:

A. Keep client management informed of audit issues and concerns as they arise.

B. Submit a draft audit report ensure that accurate and appropriate information has beenreported

C. Advise client management of projected audit days and weeks

D. Both A and B

"These are usually secured by mortgages, deeds of trust, land contracts, or other types of real estate liens. Interest rates for residential mortgages loans may be fixed or variable. Repayments of principal may be set up for full amortization, negative amortization, or partial amortization with a balloon payment at a specified rate." What are these?

A. Asset-based loans

B. Residential loans

C. Consumer loans

D. Term loans

_____________ insures two lives under one policy. Death benefits are paid to the surviving insured. The surviving insured usually has the option of purchasing an individual whole life policy of the same face amount without providing evidence of insurability.

A. Joint whole life policies

B. First-to-die policies

C. Modified premium whole life policies

D. A and B are one and the same category

Foreign currency futures contracts may be legitimately traded either on a recognized futures exchange or in the ___________, which generally involves trading between large institutions such as banks and corporations.

A. Secondary security market

B. Interbank market

C. Over the counter market

D. Dealers market

For refinancing home and mortgage loans for example, the underwriter may request additional documentation such as:

A. Savings/source of money for down payment

B. Appraisal

C. Credit History

D. Only AandB

Individuals can invest in REITs:

A. By purchasing their shares directly on an open exchange

B. By investing in a mutual fund that specializes in public real estate

C. Both AandB

D. Either A or B; it depends

To server as family and/or financial planning tool To provide for retirement To obtain favorable tax treatment These are the primary reasons

A. For establishing a trust

B. For naming an institution as trustee

C. of Safekeeping

D. of Custodial

One fund may invest on mostly established "blue chip" (Companies that pay regular dividends). Another fund may invest in newer technology companies that pay no dividends but that may have more potential for growth. These are the examples of:

A. Mutual funds

B. Index funds

C. Stock funds

D. Bond funds

Money market funds bond funds (also called "fixed income" funds) , and stock funds (also called equity funds) are the categories of:

A. Mutual funds

B. Professionally managed portfolio

C. Hedge funds

D. None of these