Series 27: Chapter 3 Practice Questions

Chapter 3 Practice Questions

1. 1. Which of the following would you not expect to find in a FOCUS report?
2. A. Balance sheet
3. B. Income statement
4. C. Organizational chart
5. D. Net capital information
6. 2. Carrying firms must submit quarterly FOCUS reports within _____ business days after the end of the calendar quarter.
7. A. 10
8. B. 12
9. C. 15
10. D. 17
11. 3. Which of the following would you be least likely to find in the Annual Audited Report?
12. A. Accountant statement
13. B. Statement of Financial Condition
14. C. Statement of Changes of Financial Condition
15. D. Income statement
16. 4. When auditing the annual financial report, the accountant must indicate any “material weaknesses” in the firm’s accounting system. What is a material weakness?
17. A. A significant inaccuracy in the firm’s reporting statements
18. B. Any deficiency in compliance with financial reporting rules
19. C. A failure to take action on an issue found in the previous audit
20. D. A deficiency in a broker-dealer’s controls that could prevent discovery of inaccuracies
21. 5. Under amended Rule 17a-5, which of the following are true?
22. I. Carrying broker-dealers must file a compliance report.
23. II. Carrying broker-dealers must file an exemption report.
24. III. Introducing broker-dealers must file a compliance report.
25. IV. Introducing broker dealers must file an exemption report.
26. A. I and III
27. B. II and IV
28. C. I and IV
29. D. II and III
30. 6. Which of the following is not true of the Form Custody report?
31. A. Introducing broker-dealers do not have to file the form because they do not have custody of their customers’ assets.
32. B. Carrying broker-dealers must identify each location where they hold their customer or non-customer securities.
33. C. Carrying broker-dealers must identify whether they operate a