IIA Exam IIA-ACCA Topic 11 Question 76 Discussion

Actual exam question for IIA's IIA-ACCA exam

Question #: 76
Topic #: 11

Which of the following activities most significantly increases the risk that a bank will make poor-quality loans to its customers?

ABorrowers may not sign all required mortgage loan documentation.

BFees paid by the borrower at the time of the loan may not be deposited in a timely manner.

CThe bank's loan documentation may not meet the government's disclosure requirements.

DLoan officers may override the lending criteria established by senior management.

Show Suggested Answer

Suggested Answer: B

by Callie at May 11, 2024, 02:41 AM

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Felicitas

5 days ago

Haha, I'm just imagining a loan officer being like, 'Nah, the rules don't apply to me. I'll do what I want!' Sounds like a great way to end up with a bunch of bad loans.

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Lottie

7 days ago

I'd have to agree with Virgie. If the loan officers can just ignore the established guidelines, that's a huge risk factor for the bank.

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Virgie

9 days ago

Option D seems like the most obvious choice here. Loan officers overriding the lending criteria is a recipe for disaster!

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Osvaldo

9 days ago

But what about C) The bank's loan documentation may not meet the government's disclosure requirements? That could also increase the risk of poor-quality loans.

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Ma

13 days ago

I agree with Nickie. When loan officers override the criteria, it can lead to poor-quality loans.

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Nickie

17 days ago

I think D) Loan officers may override the lending criteria established by senior management.

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