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Certified Financial Services Auditor (CFSA) Questions 261–265 (page: 54)

Updated On: 10-Feb-2026
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Strategic Risk if not properly controlled, understood or measured may result in:

  1. High Earnings volatility
  2. Significant capital pressures
  3. Withdrawal of loan portfolios by the customers
  4. Only A&B

Answer(s): D



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To limit strategic risk management should ensure proper balance between the:

  1. Mortgage company's willingness to accept risk and its supporting resources and control
  2. Internal operations and possibility of litigation
  3. Managerial capacities and capabilities and delivery networks
  4. All of these

Answer(s): A



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In order to avoid reputation risk; e.g. a bank that originates and sells loans into the secondary market should follow to protect its reputation in the market to support future loan sales.

  1. Proper communication channels
  2. Effective underwriting and documentation standards
  3. Regulatory requirements
  4. Disclosure requirements

Answer(s): B



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When a bank charges off a loan as a loss, it reduces an account called the" "

  1. Lease payable
  2. Lease Expense
  3. Allowance of loans and lease losses
  4. Prepaid loans and lease

Answer(s): C



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Under the principles of bank accounting, loans reported as non-performing have not yet been charged off as .

  1. Income
  2. Expense
  3. Losses
  4. prepaid

Answer(s): C



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