Auditability CT-FT Practice Questions (Page 2)

Questions 6–10

1. 6expert · hard

   A bank operates in multiple countries and is subject to both GDPR and local financial regulations. The bank's new system stores audit logs in a centralized data center located in a country outside the EU. The compliance team is concerned about GDPR compliance. Which action best addresses the GDPR requirement?

   • ADelete all audit logs that contain personal data.
   • BAnonymize all personal data in the audit logs.
   • CEnsure that the audit logs are encrypted and that appropriate safeguards are in place for the data transfer.
   • DMove the data center to a country within the EU.
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2. 7expert · hard

   A test lead is designing tests for a financial system's audit trail. The system is expected to handle high transaction volumes, and the audit log is stored in a database. The test lead must ensure that the audit trail does not lose entries during peak load. Which testing technique is most appropriate?

   • APerform a security test to verify that only authorized users can access the audit log.
   • BPerform a usability test to ensure that the audit log viewer is easy to use.
   • CPerform a stress test that generates a high volume of transactions and then verify that the audit log contains all expected entries.
   • DPerform a compatibility test to ensure the audit log works with different browsers.
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4. 8application · medium

   A bank is implementing a new trade settlement system. The compliance team requires that every trade be traceable from the initial order to the final settlement report. During test execution, the test lead notices that the system does not record the identity of the user who approved a trade modification. What is the most likely impact of this defect on auditability?

   • AThe trade will be automatically rejected by the clearing house.
   • BThe system will be unable to calculate the correct settlement amount.
   • CAuditors will be unable to determine who authorized the change, breaking the chain of accountability.
   • DThe system will fail to encrypt the trade data in transit.
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5. 9foundation · easy

   Why do financial standards and regulations commonly require audit trails?

   • ATo ensure that financial data can be independently verified and that organizations can be held accountable for their reporting
   • BTo allow organizations to share financial data with competitors for benchmarking purposes
   • CTo reduce the cost of financial software by eliminating the need for complex security features
   • DTo simplify the process of preparing tax returns by automatically calculating tax liabilities
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6. 10foundation · easy

   Which of the following is an example of a regulatory requirement that mandates auditability in financial systems?

   • AThe General Data Protection Regulation (GDPR), which requires that all personal data be deleted after one year
   • BThe Payment Card Industry Data Security Standard (PCI DSS), which requires that all transactions be processed in under one second
   • CThe International Financial Reporting Standards (IFRS), which requires that all financial reports be published in English
   • DThe Sarbanes-Oxley Act (SOX), which requires companies to maintain internal controls and records that accurately reflect financial transactions
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