Exception reports generated by the lending institution are designed to identify past-due loans. Auditors should review these exception reports to identify an unusually high number of exceptions and old or unusual exceptions that might indicate that:
A. The institution is not following up on exceptions in a timely manner
B. The institution is following up on exceptions in a timely manner
C. The auditor is not following up on exceptions in a timely manner
D. The competitor is not following up on exceptions in a timely manner
All lending institutions assume some loans will not be repaid and thus estimate the losses they expect from their loan portfolio. Management of the lending institution sets a reserve for loan losses at a given point based on factors such as:
A. The number and type of loans made
B. The quality of loans made
C. The number of problem loans
D. All of these
"These are usually secured by mortgages, deeds of trust, land contracts, or other types of real estate liens. Interest rates for residential mortgages loans may be fixed or variable. Repayments of principal may be set up for full amortization, negative amortization, or partial amortization with a balloon payment at a specified rate." What are these?
A. Asset-based loans
B. Residential loans
C. Consumer loans
D. Term loans
_____________ loans allow the consumer to repay a loan over a set period. They require periodic principal and interest payments The loan is generally secured by the item being purchased. Automobile loans or real estate mortgage loans are common types of such types of loans.
A. Installment loans
B. Consumer loans
C. Residential loans
D. Asset-based loans
Off-balance-sheet usually means an asset or debt or financing activity not on the company's balance sheet. It could involve a lease or a separate subsidiary or a contingent liability such as ___________.
A. A letter of credit
B. Scrutiny
C. Debt securities
D. Term papers
Commercial, residential and consumer are three basic types of:
A. Short term working capital loans
B. Asset-based financing
C. Installment loans
D. Loans
A statement of cash flows in a financial report that shows incoming and outgoing money during a particular period (often monthly or quarterly). It does not include _________ items such as depreciation. The statement is a useful tool for determining the short-term viability of a company, particularly its ability to pay bills.
A. Non-cash
B. Depreciation related
C. Depletion related
D. Lon-term debt
The balance sheet is the fundamental report of a company's financial position. An examination of a balance sheet will assist in determining:
A. If the company meets its financial obligations
B. The amount of money invested in outside the company
C. The company's debt ratio
D. The type of assets that company has purchased with its debt financing
Standards related to information technology are not as well-developed or universally accepted as standards in some other audit areas. Financial statements that are fairly presented meet the following ____________: Generally accepted accounting principles are used Appropriate accounting principles are used Financial statements address matters that may affect their use or interpretation Financial statements classify and summarize information in a reasonable manner Financial statements reflect underlying transactions and events in a way that facilitates the presentation of the financial position, results of operation , and cash flows
A. Limitations
B. Guidelines
C. Objective controls
D. Processing controls
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:
A. Existence or occurrence assertions address whether available information addresses actualtransactions, assets, and liabilities
B. completeness assertions address whether all material financial information is included infinancial statements
C. Rights and obligations assertions address whether the entity has legal rights to the assets andobligations to the liabilities disclosed on the financial statements
D. Presentation and disclosure assertions address whether the elements of the financialstatements are properly organized, classified and disclosed
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