Major categories of loans include all of the following EXCEPT:
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
Following statements define risk EXCEPT:
Stock transfer agent, Bond registrar, stock registrar and dividend reinvestments agent are the additional duties of:
A trust agreement is called:
Common type/s of installment loans is/are:
Low-risk scores are those with an average of scores:
Five internal control components are:
“Audit management must decide whether to sample (judgment or statistical) or use the entire universe, and which specific quantitative and qualitative methodologies will provide sufficient, competent and relevant evidence to answer the questions posed in the audit objectives.” It is an example of:
Nature of internal audit activities and quality criteria against which the performance of these services can be evaluated is best portrayed by:
___________ help bring performance back into compliance, or address problems that have been identified such as employee grievance system, employee performance approvals, or an administrative appeal’s process.
Which of the following is a limitation in an audit that affects auditors’ ability to detect material misstatements?
When a loan becomes delinquent or when collection seems unlikely, banks often suspend:
The responsibility for preparing and presenting the audited financial statements is that of:
The plans developed for the audit functions should be updated as circumstances dictate. Such specific types of plans include all EXCEPT:
Carefully crafted audit objectives are important BECAUSE:
Which one of the following does NOT depicts a common indexing method?
All members of a group insurance plan (group insureds) are covered under a single contract, known as a master group insurance contract. The employer or entity purchasing the group insurance is known as group policyholder. In _____________, group insureds do not pay any premium for the coverage.
Cash on hand refers to:
A statement of cash flows in a financial report that shows incoming and outgoing money during a particular period (often monthly or quarterly). It does not include _________ items such as depreciation. The statement is a useful tool for determining the short-term viability of a company, particularly its ability to pay bills.
The financial institutions’ general ledger records activity on deposit accounts. Posting of time deposit transactions usually occurs on the day transaction occurs or the next day. The following audit objectives and steps should be considered when performing an audit of deposit accounts EXCEPT:
The balance sheet is the fundamental report of a company’s financial position. An examination of a balance sheet will assist in determining:
System tailoring is accomplished by setting optional system parameters and, therefore, has an impact on system performance and security. Control techniques for system’s software include:
The purpose of audits of financial statements is to issue an opinion on the fairness of the financial statements and to evaluate all of the following assertions (explicit or implicit) by management EXCEPT:
These are used to speculate on the direction of interest rates. The trading of these contracts is limited. The future market is the main trading market for securities based on interest-rate movements. What are these?
Continuous auditing is a method used to automatically perform control and risk assessment more frequently. Technology is the key to enable such an approach. Continuous auditing changes the audit paradigm from periodic reviews of a sample to ongoing audit testing of ______ percent of transactions.
Which of the following does NOT come under the consideration of systematic or interconnection risk?
COBIT (Control Objectives for Information and Related Technology) is based on existing Information Systems Audit and Control Foundation, control objectives enhanced with existing and emerging international technical, professional, regulatory, and industry-specific standards. COBIT has four domains or high-level classifications. Which is of the following is NOT out of those domains?
Financial institutions regularly identify uncollectible and charge them off against the reserve for loan losses. Auditors should ensure that the institution has developed adequate criteria for charge-offs and select a sample of charged-off loans whether they are handled properly.
Another useful test is:
Information technology general controls set the foundation for effective control over computerized information system assets. General controls apply to the entire computer operation. Which of the following is/are NOT out of these controls?
Which of the following is/are included in the specific steps for auditing short-term investments?
The actual amount of payment the annuitant pays is based on:
Following are the examples of illegal sales practice EXCEPT:
If investment returns are very poor, this could lead to:
There may be instances of massive losses, in case of derivatives, most notably by __________________, these have not had repercussions.
The primary component of the McCarran-Ferguson Act is/are:
Which of the following are typical information system controls that are used to ensure properly authorized transaction?
I. Online validation routines that check dollar authority limits.
II. Online user access controls.
III. Automated balancing and reconciliation routine.
IV. Edits that validate full completion of data input fields.
Which premium life insurance is flexible enough under which policy holder may change the death benefit from time to time?
Time deposit transactions are recorded in:
“An incoming wire transfer with instruction to pay the beneficiary upon presentment of proper identification. The beneficiary usually does not maintain a checking or savings account with the paying financial institution.” This definition refers to:
All the activities, mentioned below, cause rise in interest rate EXCEPT:
Banks also serves as “registrar” for stocks and bond issues. The registrar accounts for all shares issued, certificates outstanding, and Certificates cancelled. The role/s of the registrar is/are:
Insurance Brokers work for:
Which of the following is/ are the responsibility /ies of state insurance commission:
Which statement is correct concerning commercial letters of credit?
Pension plans that an Employer establishes for retired or disabled employees, regardless of whether an employee contributes, are known as:
A contract whereby one undertakes to indemnify another or pay a specified amount upon determinable contingencies is called:
A major function of NAIC is to encourage __________ among state insurance departments through the development of model bills and regulations.
The EU saving Directive is aimed at effective taxation of saving income in the form of:
Examples of illegal sales practices may be:
Insurance companies decide on a _________ whether an investigation is necessary
Purchasers of universal life policies specify the policy’s face amount and whether the death benefit will be level or vary as the policy’s cash value changes. Under level death benefit policies the death benefit payable:
__________ agency system uses agents who sell the policies of a group of affiliated companies.
Known limitations of VaR methodology include the fact that changes in market may not tend to normal distribution (specifically, that very large movements are more likely than predicated by the normal distribution assumption); BECAUSE:
Insurance companies assist individuals in managing personal risk through risk pooling. Risk pooling is based on fact that the probability of any one type of loss occurring for a given individual is small. Therefore insurers can insure:
Once the underwriter has reviewed all of the file documentation provided, he or she will be issued a written decision .The decision may be one of the following:
Sarbanes Oxley and bases are:
When a bank charges off a loan as a loss, it reduces an account called the”_____________”
Which one of the following is common misinterpretation during the calculation of VaR
Which of the following best suits in place of question mark?
Underwriting decisions are more influenced by what underwriters think they can sell to the public than _____________.
Insurance is a method of transferring, for a fee, the financing responsibility for the risk to another party. Insurance polices are legal contracts. There are four elements that constitute a legal, binding contract. Which of the following is NOT out of those elements?
Historical simulation and model based approach are the methods to calculate:
Return on investmentAnswer:
Return on RiskAnswer:
Value at RiskAnswer:
Value at parAnswer:
Securities lending refers to the practice of temporarily transferring securities to a borrower with the intent that the lender will buy them back at a future date. The borrower is required to return the securities to the lender, either on demand or at a specified time. A major reason for securities lending is:
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:
To server as family and/or financial planning tool
To provide for retirement
To obtain favorable tax treatment
These are the primary reasons
I – In term life insurance premium increase with age no cash value.
II- In whole life insurance high cost is involved if you surrender early. Usually no cash value for at least three to five years. So, may not meet short-term needs.
III – Universal life insurance is also same a whole life and buyer assumes greater risk due to program flexibility. Low interest rates can affect cash value and premiums.
These are the __________ of different types of life insurances.
Managed care health techniques are most often practical by organizations and professionals that assume risk for a/an:
Which one of the following is not commonly granted trustee’s powers?
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?
Deductibles for dental insurance plans are _________
When one buys a cash instrument, for example 100 shares of ABC Inc., the payoff is linear (disregarding the impact of dividends). If share are purchased at $50 and the price appreciated to $75, we have ________ on a mark-to-mark basis.
The administration of personal trust accounts is primarily controlled by all of the following EXCEPT:
When purchasing a flood insurance policy, there is a standard 30-day waiting period for new applications and endorsements for coverage. Exclusions of flood insurance are all EXCEPT:
Liability insurance is a part of general insurance system of _________.