Exam 1: Certified Financial Services Auditor

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:

I- A gold producers wants to hedge his losses attributable to a fall in the price of gold for his current gold inventory. II- A cattle farmer wants to hedge his exposure to changes in the price of his livestock. These are the examples of __________ who need to manage their exposure to fluctuations in the prices of their commodities.

Traditionally, insurance is paid:

The U.S government is the largest borrower in the world and has a variety of debt instruments. These government obligations or issues are a safe form of debt security, and there has never been a default. The "full faith and credit of the government" back these issues. Some terms and definitions include:

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:

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:

Financial institutions regularly identify uncollectible accounts and charge them off against the reserve of:

Types of commercial loans are /are:

Some specific requirements of securities and exchange 1934 Act are:

Deposit accounts are:

CDs typically require a minimum deposit of at least ________ US, and often require at least ________ US.

Compliance risk can lead t[o all of the following situations EXCEPT:

Basel Accord II's addition to key factors that an organization encounters is:

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:

Organization's Objectives are described in three general categories:

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 entity has comprehensive, written credit risk management policies and procedures for derivative activities. This addresses to:

A UIT typically issues redeemable securities (or "units"), like a mutual fund, which means

Insider rule/s:

Which one of the following does NOT depicts a common indexing method?