CFP Auditing Principles & Procedures 3

Question 1

In auditing a cryptocurrency exchange, which procedure is most appropriate for verifying the existence of digital assets held in custody?

Accepted Answer

Independently verifying wallet addresses on the public blockchain and reconciling to the ledger

Answer

Public blockchain verification allows auditors to independently confirm that assets at specific wallet addresses exist without relying solely on management representations.

Question 2

Which standard framework is most commonly referenced when evaluating IT general controls in a US fintech audit?

Accepted Answer

COBIT (Control Objectives for Information and Related Technologies)

Answer

COBIT is the most widely adopted framework for IT governance and control objectives referenced in financial audits within the US.

Question 3

A fintech auditor discovers that a key payment processing control failed for 15 days before being remediated. What is the auditor's most appropriate next step?

Accepted Answer

Assess whether transactions processed during the failure period require additional substantive testing

Answer

A control failure creates a gap that may have allowed undetected errors or fraud; auditors must perform additional substantive testing covering the period the control was inoperative.

Question 4

Under SOX Section 404, management of a public fintech company must:

Accepted Answer

Assess and report on the effectiveness of internal control over financial reporting

Answer

SOX Section 404(a) requires management to assess and report on the design and operating effectiveness of ICFR as of the fiscal year-end.

Question 5

Which sampling method is most appropriate when an auditor wants every transaction in a fintech dataset to have an equal probability of selection?

Accepted Answer

Simple random sampling

Answer

Simple random sampling gives each item in the population an equal and independent chance of being selected, meeting the criterion of equal probability.

(CFP) Certified Fintech Practitioner Practice Test

(CFP) Certified Fintech Practitioner Practice Test

CFP Auditing Principles & Procedures 3