Section 2 – Exam Content

The CFSA exam tests a candidate’s knowledge of current internal auditing practices and understanding of internal audit issues, risks, and remedies in the financial services industry. The exam consists of 125 multiple-choice questions. Candidates are given three hours and thirty minutes to complete the exam.

The first 100 questions cover general financial services internal auditing activities and topics in all three financial services disciplines - banking, insurance, and securities. The remaining 25 questions specifically address one of the disciplines - banking, insurance, or securities – at a proficiency level. The CFSA candidate may choose any one of the three disciplines as part of their CFSA exam test. However, a candidate may not choose or be tested on more than one discipline. (Note: The CFSA designation does not distinguish one chosen discipline from another.)

DOMAIN I – FINANCIAL SERVICES AUDITING (25-35%)

A. IIA Professional Practices Framework (P)
B. Internal Control/ Risk Management/ Governance (P)
1. Internal Control Frameworks
2. Risk Management Frameworks
3. Governance Models

C. Audit Process (P)

1. Audit Planning
2. Audit Fieldwork
a. Risk Assessment
b. Analytical Review
c. Data Gathering and Evaluation
d. Testing
e. Tools and Techniques (e.g., CAAT)
3. Audit Communications
4. Monitoring Outcomes

D. Implications of Information Technology (P)

E. Auditing Financial Statement Elements (P)

1. Balance Sheet
2. Statement of Cash Flows
3. Income/Expense Statement
4. Off Balance-sheet Items

DOMAIN II – AUDITING FINANCIAL SERVICES PRODUCTS (25-35%)

A. Lending/Loans (A)
B. Deposits (A)
C. Trusts (A)
D. Annuities (A)
E. Derivatives (A)
F. Electronic Svs (A)
G. Cash Management Svs (A)
H. Stocks (A)
I. Bonds (A)
J. Commodities (A)
K. Mutual Funds (A)
L. Employee Benefits (A)
M. Capital Market Products (A)
N. Securities Lending (A)
O. Insurance Policies (A)
P. Insurance Products (A)
Q. Foreign Exchange (A)
R. Asset Management (A)
S. Money Market Products (A)

DOMAIN III – AUDITING FINANCIAL SEVICE PROCESSES (25-35%)

A. Risk Management (A)

1. Asset/Liability Management
2. Trading Market Risk
3. Credit, Liquidity, Operational Risk
4. Allowance for Loan and Lease Losses
5. Reserves

B. Underwriting (A)

1. Loans
2. Securities
3. Insurance
4. Private Placement
5. Initial Public Offerings

C. Securitizations (A)
D. Treasury Operations (e.g., Cash Management) (A)
E. Back-office Operations (A)
F. Marketing Sales and Distribution (e.g., Insurance Agencies, Bank Branches, Brokers) (A)
G. Claims (A)
H. Investments (A)
I. Broker/Dealer Activities (A)
J. Rating Advisory Service (A)
K. Mergers and Acquisitions (A)
L. Loan Operations (e.g., Collateral Issues, Perfecting Liens) (A)  

DOMAIN IV – THE REGULATORY ENVIRONMENT (10-20%)

A. Overview of the Regulatory Environment (A)

1. Function of Central Bank
2. Function of Insurance Regulators
3. Function of Securities Regulators

B. Laws and Regulations (A)

1. Equal Credit Opp/Antidiscrimination
2. Home Mortgage Disclosure
3. Reserve Requirements
4. Insider Transactions
5. Lending Disclosure
6. Deposits Disclosure
7. Real Estate Sales Disclosure

8. Self-assessment of Internal Controls/Risk Mgmt

9. Investor/Depositor Protection

10. Financial and Personal Information Privacy

11. Anti-Money Laundering

C. Stock Exchanges and Other Markets (A)

D. Money and Banking (A)

1. Role of Money and Banking

2. Bond and Stock Markets

3. Effect of Interest Rate Movements

4. Monetary Management Theories

BANKING DISCIPLINE (25 QUESTIONS)

A. Products (P)

B. Processes (P)

C. The Regulatory Environment (P)

INSURANCE DISCIPLINE (25 QUESTIONS)

A. Products (P)

B. Processes (P)

C. The Regulatory Environment (P)

SECURITIES DISCIPLINE (25 QUESTIONS)

A. Products (P)

B. Processes (P)

C. The Regulatory Environment (P)

TESTING LEVELS

P - Candidates must exhibit proficiency (thorough understanding and ability to apply concepts) in these topic areas.

A - Candidates must exhibit awareness (knowledge of terminology and fundamentals) in these topic areas.

PROFESSIONAL RECOGNITION CREDIT FOR PART IV OF THE CIA EXAM (PRC-IV)

Financial Services Auditing (FSA) draws practitioners from various fields, including internal audit. Internal auditors may specialize in FSA, often implementing FSA through the audit program. To recognize this specialization, The IIA's Board of Regents has approved the CFSA designation for Professional Recognition Credit for Part IV of the CIA exam. CIA candidates who have successfully completed the CFSA exam are eligible to receive credit for Part IV of the CIA exam. Information on applying for Professional Recognition Credit is available in the CIA program brochure, or visit www.theiia.org/Certification for more information.