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Certified Financial Services Auditor (CFSA) Questions 116–120 (page: 25)

Updated On: 10-Feb-2026
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Derivatives can be:

  1. Exchange traded securities
  2. Exchange traded options
  3. Over-the-counter traded securities
  4. Either A or C

Answer(s): D



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Basic control/s to consider when auditing derivates strategies is/are:

  1. "Created" Reports
  2. Risk or position limits
  3. Highly volatile markets or illiquid markets
  4. Board-approved guidelines

Answer(s): D



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The entity has comprehensive, written credit risk management policies and procedures for derivative activities. This addresses to:

  1. Counterparty Risk
  2. Market risk
  3. Market liquidity Risk
  4. Legal Risk

Answer(s): A



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Which of the following does NOT come under the consideration of systematic or interconnection risk?

  1. Risk management systems that include limits or controls on interconnection risk to which the entity is willing to expose itself.
  2. Provisions for monitoring systematic risk effectively
  3. Contingency plans setting forth actions to be taken when system-wise market disruptions occur
  4. Due diligence of enforcement activities

Answer(s): D



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Electronic financial services audits should focus on whether there are adequate internal controls in place to protect customer transactions information, and assets. Some key steps in clued all of the following EXCEPT:

  1. Determine whether disaster contingency plans for the failure of internet transactions or communication are adequate, regularly updated
  2. Determine whether disaster contingency plans for the failure of internet transactions or communication are adequate, regularly tested, and regularly updated
  3. Determine whether an access is controlled by a firewall
  4. Stress test analyzing changes in market and credit conditions are appropriate. The market assumptions are reasonable

Answer(s): D



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