IIA Certified Government Auditing Professional IIA-CFSA Questions & Answers

• Question 1:

  Historical simulation and model based approach are the methods to calculate:

  A. Return on investment

  B. Return on Risk

  C. Value at Risk

  D. Value at par

  Correct Answer: C

• Question 2:

  Not all misstatements will be material enough to affect the fair presentation of the financial statement. A material misstatement is one that the auditors determine would change or influence the option of a reasonable person relying on the financial statements for information. Ultimately, auditors must exercise judgment to assess materiality based on the qualitative nature of the misstatements and their quantitative extent. Materiality is also based on auditors' assessment of control risk levels in the organization. The following factors may influence the auditors' assessment of control risk EXCEPT:

  A. Management's awareness or lack of awareness of applicable laws and regulations

  B. Client policy regarding such matters as acceptable operating practices and codes of conduct

  C. Assignment of responsibility and delegation of authority to deal with such matters asorganizational goals and objectives, operating functions, and regulatory requirements

  D. None of these

  Correct Answer: D

• Question 3:

  Some objectives of an audit related to mutual funds might include determining that:

  A. Mutual fund checks are issued in accordance with firm policies and supported by valid trades

  B. Mutual fund purchases are confirmed on a timely basis

  C. Mutual fund switches are not authorized by the client

  D. All EXCEPT "C"

  Correct Answer: D

• Question 4:

  Major types of Real Estate Investment Trust (REITs) include all of the following EXCEPT:

  A. Equity REITs

  B. Mortgages REITs

  C. Hybrid REITs

  D. None of these

  Correct Answer: D

• Question 5:

  _____________ funds may specialize in a particular industry segment, such as technology or consumer products stocks.

  A. Index

  B. Sector

  C. Growth

  D. Income

  Correct Answer: B

• Question 6:

  There are different classes of mutual funds. Classes that typically do not have a front-end sales load. Instead they may impose a contingent deferred sales load and a 12b-1 fee (along with other annual expenses) is called:

  A. Class A

  B. Class B

  C. Class C

  D. Both BandC

  Correct Answer: B

• Question 7:

  Hedge funds: A. Seek to profit in all kinds of markets by pursuing leveraging and other speculative investment practices

  B. Are subject to very few regulatory controls

  C. Also have voluntarily restricted investment to wealthy investors through high investment minimums

  (e.g. $1 million)

  D. All of these

  Correct Answer: D

• Question 8:

  Overall "market risk" poses the greatest potential danger for investors in ____________.

  A. Bonds funds

  B. Hedge funds

  C. Stock funds

  D. Growth funds

  Correct Answer: C

• Question 9:

  Money market funds:

  A. Can invest in only certain high-quality, short-term investments issued by Federal State and local government

  B. Try to keep their NAV at a stable $1.00 per share

  C. Pay dividends that generally reflect short-term interest rates

  D. All of these

  Correct Answer: D

• Question 10:

  Some of the risks associated with bond funds are all of the following EXCEPT:

  A. Credit Risk

  B. Interest Rate Risk

  C. Payment Risk

  D. Liquidity Risk

  Correct Answer: D