SOFE SOFE Certifications AFE Questions & Answers

• Question 101:

  The pro rata portion of premiums written allocable to unexpired policy periods represents unearned premiums, which are reflected as in the balance sheet.

  A. Liabilities

  B. Expenses

  C. Revenues

  D. None of the above

  Correct Answer: A

• Question 102:

  Audit regulatory is more reliable when it is obtained from knowledgeable independent sources inside the entity.

  A. True

  B. False

  Correct Answer: B

• Question 103:

  is provided by original documents is more reliable than audit evidence provided by photocopies or facsimiles.

  A. Enterprise evidence

  B. Property evidence

  C. Audit evidence

  D. Regulatory evidence

  Correct Answer: C

• Question 104:

  The Module Rule requires the insurer to provide:

  A. to the insurance commissioner of the state of domicile, a copy of notification of adverse financial condition

  B. to the auditor, evidence that the notification has been provided to the organization

  C. Both A and B

  D. Neither A nor B

  Correct Answer: A

• Question 105:

  The SEC rules clarify that management's assessment and report is limited to internal control over financial reporting.

  A. True

  B. False

  Correct Answer: A

• Question 106:

  The auditor responds to risks of material misstatements due to fraud in which of the following ways?

  A. a response that has an overall effect on how the audit is conducted

  B. a response to identified risks involving the nature, timing and extent of auditing procedures to be performed

  C. a response involving the performance of certain procedures to further address the risk of material misstatement due to fraud involving management override of controls.

  D. All of the above

  Correct Answer: D

• Question 107:

  Which of the following may NOT involve a high degree of management judgment and subjectivity and may present risks of material misstatement due to fraud?

  A. Investments

  B. Deferred acquisition costs

  C. Reinsurance

  D. key estimates

  Correct Answer: D

• Question 108:

  An estimate due to time lags in the receipt of reports from cendants is called reinsurance.

  A. True

  B. False

  Correct Answer: A

• Question 109:

  Which are the types of misstatements relevant to the auditor's consideration of fraud in a financial statement audit?

  A. misstatements arising from fraudulent financial reporting

  B. misstatements arising from misappropriations of assets

  C. Both A and B

  D. Neither A nor B

  Correct Answer: C

• Question 110:

  An attitude that includes a questioning mind and a critical assessment of audit evidence is called:

  A. Operational skepticism

  B. Audit skepticism

  C. Professional skepticism

  D. None of the above

  Correct Answer: C