Preview Questions Internal Auditor | Role Specific Skill

Question 1: What should be the focus of a compliance audit for an institution's adherence to the Consumer Financial Protection Bureau (CFPB) regulations?

Which action should you take?

Choose only one option

The accuracy of deposit interest rates

The effectiveness of capital adequacy planning

The application of fair lending practices and consumer protection policies

Loan portfolio diversification strategies

Question 2: Which of the following is a key component of a compliance audit in relation to anti-money laundering (AML) regulations?

Which action should you take?

Choose only one option

Verifying the completeness of financial statements

Ensuring the accuracy of loan documentation

Reviewing customer identification and suspicious activity reports (SARs)

Evaluating the credit risk assessment process

Question 3: Which of the following is NOT typically included in a comprehensive risk management framework?

Which action should you take?

Choose only one option

Risk minimization

Risk quantification

Risk identification

Risk prevention

Question 4: How should an internal auditor assess off-balance-sheet financing in financial reporting?

Which action should you take?

Choose only one option

By assessing the implications on tax liabilities

By reviewing the legal contracts related to financing

By ensuring that it is properly disclosed and does not materially misstate financial health

By evaluating the market conditions influencing financing

Question 5: Which of the following best describes the role of risk control self-assessment (RCSA) in the context of risk management in BFSI?

Which action should you take?

Choose only one option

A procedure for assessing the company's financial profitability

A process to identify, assess, and mitigate risks through employee self-reports

A tool used by external auditors to identify potential fraud

A framework used for assessing the effectiveness of internal controls

Question 6: What is the key difference between detective and preventive controls in the context of financial reporting in BFSI?

Which action should you take?

Choose only one option

Preventive controls involve training, while detective controls involve audits

Detective controls aim to prevent fraud, while preventive controls identify fraud risks

Detective controls can only be automated, while preventive controls are manual

Preventive controls aim to stop errors before they occur, while detective controls identify them after occurrence