IIA IIA-CFSA Online Practice Questions and Exam Preparation

IIA IIA-CFSA Online Questions & Answers

• Question 51:

  You are auditing the claim handing of your branch office. You note that one of the claims is for lost revenue due to a windstorm damaging the building. The claim file states that the insured requested coverage for this type of loss. However, the independent agent failed to request the coverage though an oversight. Which action is required to appropriately handle the claim?

  A. The claim should be denied since coverage was never present, and the claim should be placed against the agency's errors and omissions policy for reimbursement of the claimant.
  B. The claim should be accepted and paid up to the policy limits since the insured meant to create coverage for business interruption. Due premiums for the coverage can be charged retrospectively
  C. The claim should be denied since repaying for business interruption and lost revenues would financially enrich the insured, which is against one of the principle of insurance
  D. The claim should be paid and the insured indemnified since the insured requested thecoverage. Since the produce was acting as an "agent" of the carrier, they commute their liability
  A. The claim should be denied since coverage was never present, and the claim should be placed against the agency's errors and omissions policy for reimbursement of the claimant.

• Question 52:

  Preliminary prospectuses are often called:

  A. Red hearing
  B. Introductory Notes
  C. Initial Coverage
  D. None of these
  A. Red hearing

• Question 53:

  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:

  A. Assess the adequacy of policies, procedures, and internal controls regarding deposit accounts
  B. Determine whether documentation exists to show that accounts are properly opened and closed in a timely manner and in accordance with establish policies. Ensure that applications and signature cards are on file. Send confirmations on a sample of accounts. If any confirmations are not received, compare the signature on recent checks or transactions to the signature card for the account
  C. Determine whether deposit transactions and any expense is posted properly
  D. Ensue that there is adequate separation of duties between the posting and reconciling functions. Recalculate a sample of reconciliations to verify accuracy. Note whether any nusual transactions were properly verified and authorized
  C. Determine whether deposit transactions and any expense is posted properly

• Question 54:

  Commonly used distribution system/s in the insurance industry is/are:

  A. Personal selling distribution system and the direct response distribution
  B. Ordinary agency system
  C. Career agency system
  D. All of these whereas B and C are the same
  A. Personal selling distribution system and the direct response distribution

• Question 55:

  Non-interest bearing accounts including checking accounts and escrow accounts are known as:

  A. Term deposit accounts
  B. Demand deposit accounts
  C. Fixed deposit accounts
  D. Both A and C
  B. Demand deposit accounts

• Question 56:

  __________ allows businesses that sell durable goods such as auto-mobiles to finance inventories. As the business sells goods, the loan advance against those goods is repaid.

  A. Term loans
  B. Consumer loans
  C. Installment loans
  D. Floor-plan financing
  D. Floor-plan financing

• Question 57:

  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:

  A. Level term insurance policies
  B. Decreasing term life insurance policies
  C. Modified premium whole life policies
  D. First-to-die policies
  B. Decreasing term life insurance policies

• Question 58:

  Asset/Liability (ALM) is a short and long term planning tool designed to maximize earnings. ALM tries to create optimal risk/reward decisions and focuses on creating prices that achieve spread. A sound ALM policy must manage following types of risks EXCEPT:

  A. Credit Risk
  B. Control Risk
  C. Liquidity Risk
  D. Capital Risk
  B. Control Risk

• Question 59:

  Correspondent banks, Credit party, Draw down, Execution date, Remitter, and Repetitive transfer are some terminologies related to:

  A. EFT
  B. Bank wire
  C. ACH
  D. ALL
  B. Bank wire

• Question 60:

  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:

  A. Allow client management to state concerns and objections to the findings and recommendations
  B. Give the client management and the audit team the opportunity to identify and correct any errors or misinterpretations that may appear in the draft report
  C. It should include a description of significant noteworthy accomplishments and issues thatneed further work
  D. Provide the audit team with the formal opportunity to explain the remaining steps in the auditprocess prior to the release of the final report
  C. It should include a description of significant noteworthy accomplishments and issues thatneed further work