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If a surgeon loses a hand, she may not be able to perform surgery. If she has an ____________ policy, she would be able to recover, even though she can still work as a doctor in a nonsurgical field. If she has a ____________ policy, there would be no recovery, even if the surgeon’s only possible alternative is to be a tour guide.
Typically, the costs associated with receiving care from the “in network” or approved providers are ______________ when care is rendered by non-contracting providers.
Which one of the following is NOT the rule of National Association of Securities Dealers (NASD)?
Banks often make loans to officers, directors, employees, and principal shareholders. Discloser of these related-party transactions is required:
Which of the following does NOT come under the consideration of systematic or interconnection risk?
Shareholders also have the right to receive declared dividends. Besides the potential for capital appreciation, investors also have the potential to receive dividend income. There are several types of dividends. For instance, an investor with 500 shares of stock selling at $50 per share would have 1,000 shares at $25 per share after a 2-for-1 split. These types of dividends are called:
An objective of an exit conference is that it provides the client management with findings and recommendations identified during the audit which addresses all of the followings EXCEPT:
Standards related to information technology are not as well-developed or universally accepted as standards in some other audit areas. Financial statements that are fairly presented meet the following ____________: Generally accepted accounting principles are used Appropriate accounting principles are used Financial statements address matters that may affect their use or interpretation Financial statements classify and summarize information in a reasonable manner Financial statements reflect underlying transactions and events in a way that facilitates the presentation of the financial position, results of operation , and cash flows
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?
Banks should develop policies related to ALM, including specific guidelines regarding risk/reward tradeoffs. The goal is to manage risks while achieving acceptable returns on investments. In developing these policies bank officials analyze:
Banks generally record securities transactions as of trade date. However, it is acceptable to record the transactions as of the _________ if the difference between the settlement date and trade date is not materially different.
Which one of the following questions is NOT considered when claims department review the claims?
“A valid contract involves each party giving something of value. This exchange of value, or consideration, may take the form of money, action, or promise. For insurance contracts, the insured’s consideration is the payment or premiums and a promise to fulfill the conditions of the contracts, and the insurer’s consideration is the promise to pay after a loss occurs.” This is related to an element in an insurance policy contract. It is known as:
Under the principles of bank accounting, loans reported as non-performing have not yet been charged off as _____________.
The primary mechanism for estimating potential losses is mathematical methodology, value at risk (“VaR”) which estimates the exposure to market risk:
Insurance contracts are also considered ____________ in that they are legal documents that required the insurer to pay if covered events occur. Because the insurance company creates the contract, it is liable if there are any ambiguities in the contract language.
Insurance products yield _________ compared to regular investment option and this is besides the added incentives (read bonuses) offered by insurers.
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?
Securities products include:
1. Trusts
2. Annuities
3. Derivatives
4. Stocks
5. Bonds
6. Commodities
7. Mutual Funds
8. Pension Funds
9. Term Loans
10. Asset Management
11. Money Market Products
The trustee is responsible for producing a schedule of distribution which includes information as:
Which two of the following characteristics apply to universal life insurance policies?
I. To provide the insured with a number of investment options.
II. To provide the insured with a minimum guaranteed cash value.
III. To provide a cash value fund that accumulates tax deferred.
IV. To provide flexibility of both premium and death benefits.
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.
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?
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:
Risks related to assets/liability management that auditors should be aware of include all of the following EXCEPT:
The Federal Reserve issue oral or written statement to encourage banks to increase or decrease their lending activities. This is a condition of:
________ are insurance company representatives with the authority to sell the company’s product.
____________ is a form of insurance, to move risk from someone major loss to someone who could absorb the loss, or is able to hedge against the risk by buying some other derivative.
The types of accounts that bear interest include savings accounts, negotiable orders of withdrawal (NOW) accounts, and certificates of deposit. These interest bearing accounts are known as:
The due from bank either credits the due to bank’s account or pays the due to bank directly with a ______________.
Banks should account for trading securities at market value. Any changes in cost should be regarded as a/an:
There may be instances of massive losses, in case of derivatives, most notably by __________________, these have not had repercussions.
While the SEC review is in progress, the issuer can circulate a preliminary prospectus to determine the interest in issue. The preliminary prospectus must include all of the following EXCEPT.
Deposit in many banks are insured by the ______________, which ensure that depositors will get their money back up to a stated limit, if a bank should fail:
Which one of the following statements is NOT the part of audit work schedule?
The responsibility for preparing and presenting the audited financial statements is that of:
Most municipal and corporate bonds are rated by an independent rating firm such as Standard & Poor’s (S&P) or Moody’s. These ratings provide investors with information regarding the risk of default on the bond issue. The higher rated bonds are considered _________.
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.
Internal auditors, engaging in activities that are illegal and discreditable to the profession of internal auditing or the organization, violate which of the following principles:
Which of the following steps is/are NOT considered in the audit planning process?
Financial institutions regularly identify uncollectible accounts and charge them off against the reserve of:
Risk is the probability that an event or action may adversely affect the organization or activity under review. In other words, risk is anything that can prevent an organization from achieving an objective. Major components of risk are as follows EXCEPT:
Both residual and control risk need to be_______________ dealt with in project management.
Which one of the following is/are NOT the type of retirement plans that banks may administer?
The plans developed for the audit functions should be updated as circumstances dictate. Such specific types of plans include all EXCEPT:
The fund prospectus is the document that provides a general overview and description of the fund. The intent is to provide a potential investor with enough information to make a sound financial decision. The following information is generally placed in a prospectus EXCEPT:
I- Restrict access to data by business need-to-know
II- Assign Unique ID t each person with computer access
III-Restrict physical access to cardholder data
The above requirements of PCI (Payment Card Industry) achieve which one of the following goals?
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:
Financial services organizations are challenged to provide responsible fiduciary management while:
____________insurance provides a specified benefit amount in either of the following cases:
If the insured survives to the maturity date of the policy is reached.
If the insured dies before the maturity date of the policy is reached.
It is a characteristic of insurance policy according to which the insured decides whether or not to pay the premium to be covered by the policy. If the insured pays the premium, the insurance coma pay is obliged to make payments as stated in the policy. What is it?
Whole life policies accrue a cash value that the insurer must surrender to the policyholder if the policy does not remain in force until the policyholder’s death. The actual cash value payable to the policyholder in this circumstance would be:
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:
TESTED 06 May 2024