Question 1

The interagency statement calls for these disclosures to be provided EXCEPT:

Accepted Answer

The interagency statement requires disclosures to be made in various forms, including orally during sales presentations and when providing investment advice, as well as in advertisements and promotional materials. Therefore, none of the options listed are exceptions to the disclosure requirements.

Question 2

Basic control/s to consider when auditing derivates strategies is/are:

Accepted Answer

The answer of Basic control/s to consider when auditing derivates...

Question 3

Derivatives can be:

Accepted Answer

Derivatives can be traded on exchanges (like futures and options) or over-the-counter (OTC), which are private contracts between parties.

Question 4

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:

Accepted Answer

The answer of The purpose of audits of financial statements...

Question 5

Electronic financial services audits should focus on whether there are adequate internal controls in place to protect customer transactions information, and assets. Some key steps in clued all of the following EXCEPT:

Accepted Answer

Stress testing related to market and credit conditions is not directly related to electronic financial services audits, which focus more on internal controls and security measures.

Question 6

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:

Accepted Answer

The answer of System tailoring is accomplished by setting optional...

Question 7

A sound data classification scheme sets the foundation for the effective implementation of access control to ensure that data is adequately protected. The elements of a data classification scheme are as follows EXCEPT:

Accepted Answer

The answer of A sound data classification scheme sets the...

Question 8

Which of the following does NOT come under the consideration of systematic or interconnection risk?

Accepted Answer

Due diligence of enforcement activities is more related to compliance and regulatory risk rather than systematic or interconnection risk.

Question 9

Cash equivalent may include:

Accepted Answer

The answer of Cash equivalent may include:
...

Question 10

"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?

Accepted Answer

The statement refers to the element of integrity that ensures information is handled with proper authority, which aligns with the concept of being "Authorized."

Question 11

In option- type securities contracts the option's price is called:

Accepted Answer

The option's price is called the premium.

Question 12

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

Accepted Answer

Counterparty risk is the risk that the other party to a derivative contract will not fulfill its obligations. Comprehensive, written credit risk management policies and procedures for derivative activities would address this risk by establishing criteria for evaluating the creditworthiness of counterparties and by outlining the steps to be taken in the event of a counterparty default.

Question 13

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:

Accepted Answer

These are standards related to system development methodology, which includes processes and procedures for developing and implementing systems, ensuring authorized changes, and managing project deliverables and timelines.

Question 14

Elements of information and process integrity are that it should be authorized, accurate, complete, timely, recorded processed, and reported in the proper time. Each of the elements in the above has a relationship to the:

Accepted Answer

All elements of information and process integrity relate to the selection, collection, and classification of data, as they ensure data is handled correctly throughout its lifecycle.

Question 15

Non-deposit investment product includes:

Accepted Answer

Fixed and variable annuities are both non-deposit investment products.

Question 16

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?

Accepted Answer

These requirements are part of implementing strong access control measures, which is a key goal of PCI compliance to ensure that only authorized individuals have access to sensitive cardholder data.

Question 17

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?

Accepted Answer

COBIT's four domains are Planning and Organization, Acquisition and Implementation, Delivery and Support, and Monitoring. "Evaluation" is not one of the COBIT domains.

Question 18

Under the interagency statement when a bank recommends or sells non-deposit investment product it should inform the customer that the product is:

Accepted Answer

The interagency statement requires banks to inform customers that non-deposit investment products are not insured by the FDIC and are not obligations of or guaranteed by the bank.

Question 19

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?

Accepted Answer

The major goals of PCI standards include building and maintaining a secure network, protecting cardholder data, maintaining a vulnerability management program, and regularly monitoring and testing networks. An annual review of an information security policy is not specifically listed as one of the major goals of PCI standards.

Question 20

Which one of the annuities, mentioned below, is not regulated by the SEC:

Accepted Answer

Fixed annuities are not regulated by the SEC because they are considered insurance products, not securities.

Exam 1: Certified Financial Services Auditor