Bank may serve as trustee or custodian for pension and profit sharing plans that self- employed individuals establish for them selves and their employees. These types of trust are referred to as:
___________ result from a failure to follow the logic of a series of statements.
The auditor should plan an audit with an attitude of:
Following elements should be documented in the audit scope EXCEPT:
If principal is paid on a loan after it has been placed on non-accrual status, the bank must determine whether it should record the payment as a reduction of:
The risk analysis process involves all of the following steps EXCEPT:
Low-risk scores are those with an average of scores:
Which of the following is a limitation in an audit that affects auditors’ ability to detect material misstatements?
Which one of the following is an internal control component?
The main purposes of the audit survey are to assist with following goals and tasks EXCEPT:
Financial institutions regularly identify uncollectible accounts and charge them off against the reserve of:
Engagement client management often has a negative perception of audit process; therefore, communication throughout the audit process is essential to alleviate some of the concerns of management. The very first step in communicating the audit information with the client is:
Data gathering and evaluation during field work includes:
There are multiple sets of attribute and performance standards:
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
“_______”
Deposit accounts are:
Which of the following is/are included in the specific steps for auditing short-term investments?
Deposit accounts are either interest bearing or non-interest bearing. Interest bearing accounts includes _________ and ___________. The types of accounts bear interest for a fixed period of time and are known as time deposits.
Workpapers serve as the connecting link between the audit assignment, the auditor’s fieldwork, and the final report. Most importantly, the workpapers document the auditor’s conclusions and the reasons those conclusions were reached. Workpapers also provide a basis for demonstrating compliance with the IIA’s Standards. Among other things, workpapers may include all of the following EXCEPT:
Although generally attached to bonds or preferred stock, warrants can also be attached to other securities, such as speculative stock. Warrants allow holder to buy more stock as its value appreciates. Below are the terms that must be considered in order to understand warrants EXCEPT:
Feasibility studies and cost benefit analysis Approval process for initiating system development and implementation of systems that are developed Change control procedures for new system developments and modifications to existing systems to ensure that only authorized changes are moved to production General and detailed design specification Project review, including periodic milestones reviews and post-implementation reviews Contracting procedures that include the requirements for describing expected project deliverables such as system components and source codes, project timeframes, estimated hours, and the maximum allowable expenses for each phase These are some of the standards of:
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?
“An element of information, from a transaction to an entire system, is appropriately entered, developed, changed, or used with proper authority.” Which of the following element of integrity supports this statement?
In the United States, banks are required to report cash deposits that exceed $10,000 a day to any one account, regardless of how many branches or deposits have been used in the transactions. Banks are also required to report when cash is used to purchase cashier’s checks, money orders, traveler’s checks, or bank checks in excess of $3000. In the Untied States, accounts are federally insured by the Federal Deposit Insurance Corporations (FDIC). An individual is limited to __________ in insurance coverage at each bank (including branches).
Visa and MasterCard have teamed up to develop payment card Industry ( PCI) Data Security standards to govern the safekeeping of account information. Which of the following is NOT out of the major goals of PCI standards?
Exception reports generated by the lending institution are designed to identify past-due loans. Auditors should review these exception reports to identify an unusually high number of exceptions and old or unusual exceptions that might indicate that:
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:
When looking at account receivables auditors should ensure:
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.
Group insurance policies typically include a preexisting condition provision that excludes:
As interest rate change, the price of an issued bond also changes. The change in price has an inverse relationship to changes in interest rates (if one rises, the other falls). If new bond issues are paying a higher interest rate than existing bonds, investors will not purchase existing bonds unless:
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 __________.
__________ is a tool to transfer qualified investments from one account to another. In order to retain certain special tax treatments, funds may not be co-mingled with other types of assets, including other IRAS.
Pension plans that an Employer establishes for retired or disabled employees, regardless of whether an employee contributes, are known as:
Checking account may pay interest. Checking accounts that pay interest are referred as a:
Other asset categories are mentioned in:
The primary objective/s of ECB is/are:
Banks should account for trading securities at market value. Any changes in cost should be regarded as a/an:
Notes are debt instruments issued to:
CAMEL is an acronym that comes from the key areas of a financial institution’s safety and soundness examination. It stands for:
Insurance in law and economics, is a form of risk management primarily used to:
Types of barrowed funds include all EXCEPT:
A contract whereby one undertakes to indemnify another or pay a specified amount upon determinable contingencies is called:
Preliminary prospectuses are often called:
Banks often make loans to officers, directors, employees, and principal shareholders. Discloser of these related-party transactions is required:
The primary regulatory entities for banking include all EXCEPT:
Life insurance includes all of following the products EXCEPT:
The mission of the NAIC is to assist State Insurance regulators, individually and collectively, in serving the public interest and achieving all the following fundamental insurance regulatory goals in a responsive, efficient and cost effective manner, consistent with the wishes of its members EXCEPT:
Some of the risks associated with bond funds are all of the following EXCEPT:
A gold producer wants to hedge his loses attributable to a fall in the price of gold for his current gold currency. This is an example of:
Option’s in major types of life insurance is/are:
The approximate per-share NAV plus any fees the fund imposes is the price:
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.
Life insurance that can be made valid up to a certain age or period is called ___________. This insurance coverage continues up until an agreed time without having to be renewed.
Money market funds bond funds (also called “fixed income” funds) , and stock funds (also called equity funds) are the categories of:
Endowment policies are similar to___________ policies in that premiums are usually level through the term of policy and the policies build cash values.
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:
There are some investment companies, known as exchange-traded funds or ETFS, which are legally classified as open-end companies or UITs. EFTs differ from traditional open-end companies and UITs because:
General Market indices in the commodities market with which many people would be familiar include:
In which of the following ways are calls and put options used by the options investor in purchase and sales transaction?
I. A long call allows the investor to purchase the underlying security at the specified strike price after the option expiration date
II. Along put allows the investor to sell the underlying security at the specified strike price until the option expiration date
III. An investor who is short a call is at the underlying security at the specified strike price if a call option is exercised after the option expiration date
IV. An investor who is short a put is obligated to buy the underlying security at the specified strike price if a put option is exercised by the option expiration date
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.
Which of the following are NOT common funding vehicles used by insurers to invest in retirement plan assets as they are accumulated?
In which of the following ways would the writer of an uncovered call usually make a profit?
I. The call expires
II. The underlying stock splits
III. The underlying stock goes up in price
IV. The underlying Stock goes down in price
A derivative with a convex payoff-profile at some point before the option’s maturity is a simple plan vanilla option. As the option becomes progressively more-in-the money, the rate at which the position makes money increases until a sympathetically approaches the linear payoff of the future. Similarly, as the option becomes progressively more out-of – the money, the rate at which the position loses money decreases until that rate becomes zero. This is an example of:
For example, $50,000 five-year policy might decrease to $40,000 in benefits payable the second year, to $30,000 the third year, to $20,000 the fourth year, and to $10,000 in the final year. This is an example of:
Asset/liability management is a planning tool designed to maximize earnings. ALM tries to create optimal risk/reward decisions and focuses on creating prices that achieve a desired spread. A sound ALM policy must manage many types of risks such as:
Back-office operations are _____________ as offshore operations which establish business entities in tax-free export zones or offshore centers.
All of the following are financial instrument EXCEPT:
An intelligent risks management platform approaches risk from the:
Which one of the following Factors does NOT ensure the financial health and security of the organization?
Universal life policies are a form of permanent life insurance that has flexible premiums, flexible face amounts, and separate pricing for the three major pricing categories. Which of the following is/are out of those categories?
To limit strategic risk management should ensure proper balance between the:
The tax implications are to be considered in case of life insurance. As, you can take out in chunks to supplement the income, and minimize tax burden, while keeping the majority still under the tax differed status (Not to mention the benefit of Roth IRA).So, the end result of what you have is for disposable income is once again better with the:
Main areas within financial services are:
Historical simulation and model based approach are the methods to calculate:
Which of the following best suits in place of question mark?
