IIA IIA Certifications IIA-CFSA Questions & Answers

• Question 351:

  _________ stock generally costs more than __________ because of the additional rights its stockholders receive.

  A. Cumulative preferred stock, Non- Cumulative preferred stock

  B. Non- Cumulative preferred stock, Cumulative preferred stock

  C. Cumulative preferred stock, Cash dividends

  D. Preferred stock, Common Stock

  Correct Answer: D

• Question 352:

  Preferred stock is similar to common stock in that it represents ownership in a corporation. Preferred stockholders generally receive as fixed dividend rate. The types of preferred stock include all of the following EXCEPT:

  A. Cumulative preferred stock

  B. Non-cumulative preferred stock

  C. Participating preferred stock

  D. Invertible preferred stock

  Correct Answer: D

• Question 353:

  Shareholders also have the right to receive declared dividends. Besides the potential for capital appreciation, investors also have the potential to receive dividend income. There are several types of dividends. For instance, an investor with 500 shares of stock selling at $50 per share would have 1,000 shares at $25 per share after a 2-for-1 split. These types of dividends are called:

  A. Cash dividends

  B. Stock split

  C. Preferred dividends

  D. None of these

  Correct Answer: D

• Question 354:

  Although these rights do not always exist, if they do, shareholders are entitled to buy any new issue of stock in proportion to their holdings. If a person owns 5% of a corporation, then he or she would have the right to buy 5% of newly issued shares. These are:

  A. Proxy rights

  B. Preemptive rights

  C. Inspection rights

  D. Liquidation rights

  Correct Answer: B

• Question 355:

  Most corporations have an annual meeting where stockholders have the opportunity to vote on important issues. These issues include:

  A. Election of the board of directors (the officers of the corporation)

  B. Changes to the corporate charter

  C. Reconciliation

  D. Takeovers

  Correct Answer: AB

• Question 356:

  Stockholders are generally allowed one vote per share held. As a result, individuals who hold large blocks of share are more likely to be board members. Which of the following are out of the basic rights of stockholders?

  A. Proxy rights

  B. Reorganization rights

  C. Exception rights

  D. Liquidation rights

  Correct Answer: AD

• Question 357:

  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

  Correct Answer: C

• Question 358:

  In the United States, banks are required to report cash deposits that exceed $10,000 a day to any one account, regardless of how many branches or deposits have been used in the transactions. Banks are also required to report when cash is used to purchase cashier's checks, money orders, traveler's checks, or bank checks in excess of $3000. In the Untied States, accounts are federally insured by the Federal Deposit Insurance Corporations (FDIC). An individual is limited to __________ in insurance coverage at each bank (including branches).

  A. $50,000

  B. $75,000

  C. $100,000

  D. $10,000

  Correct Answer: C

• Question 359:

  Deposit accounts are either interest bearing or non-interest bearing. Interest bearing accounts includes _________ and ___________. The types of accounts bear interest for a fixed period of time and are known as time deposits.

  A. Savings accounts, certificates of deposit

  B. Savings accounts, term deposit

  C. Certificate of deposit, Savings accounts and certificates of deposit

  D. Savings accounts, certificates of deposit and non-interesting bearing account

  Correct Answer: A

• Question 360:

  Financial institutions regularly identify uncollectible and charge them off against the reserve for loan losses. Auditors should ensure that the institution has developed adequate criteria for charge-offs and select a sample of charged-off loans whether they are handled properly.

  Another useful test is:

  A. To select a sample of loans that are significantly paid inorder to determine whether they meet the charge-off criteria and assess why they have not been charged off

  B. To select a sample of loans that are significantly paid in order to determine whether theymeet the past criteria and assess why they have not been charged off

  C. To select a sample of loans that are significantly paid in order to determine whether theymeet the charge-off criteria and assess why they have not been charged off

  D. To select a sample of loans that are significantly paid in order to determine whether theymeet the charge-off criteria to meet the current requirements

  Correct Answer: A