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OCC UCE DECK 1 Questions with
Detailed Verified Answers
Question:Goal of the overall control system?
Ans: help maintain authority, recognize and identify the need for timely
reporting and information
Question: Goal of internal control system?
Ans: protect the banks assets, assure integrity of financial and operating
records.
Question: Effective audit program depends on?
Ans: competence and independence of the auditor. Proper scope and
adequate procedures
Question: Chapter 7 bankruptcy. Who can file, what happens to debt?
Ans: This type of bankruptcy can be filed by individuals, corporations, and
partnerships. Complete liquidation of assets to pay off debt. Remaining debt is
discharged.
Question: Chapter 11 bankruptcy; who can file, what happens to the debt?
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Ans: Type of bankruptcy available to individuals, corporations, and
partnerships, but primarily businesses. allows debtor to remain in operation
while be sheltered from some of its debt.
Question: Chapter 9 bankruptcy; who can file?
Ans: only available to municipalities
Question: Chapter 13 bankruptcy; who can file what happens to debt?
Ans: Known as the wage-earner bankruptcy - reorganizes debt to allow
repayment under a 3-5 year plan. Creditors unable to pursue legal action. Can
not be filed by partnerships or corporations
Question: Is an audit committee required for FSAs and Banks with assets
between $500 million or more and less than $1 billion?
Ans: Yes. The audit committee should be a majority of outside directors.
Question: Is an audit committee required for FSAs and Banks with assets of $1
billion or more?
Ans: Yes, and the audit committee has to be all outside directors.
Question: Are banks and FSAs with assets between $500 million or more and
less than $1 billion required to file an internal control over financial reporting?
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Ans: No. Only institutions with $1 billion or more at the beginning of the fiscal
year are required to file a report on internal controls over financial reporting
Question: For 12 CFR 363 purposes, if an outside director owns or controls
atleast what percentage of stock before the rest of the board must determine
if that director would interfere with the directors ability to be independent?
Ans: 10%
Question: For 12 CFR 363 purposes when will a director not be considered
independent of management?
Ans: the director serves or has served within the last three years as a
consultant, advisor, promoter, underwriter, legal counsel, or trustee of or to
the institution or its affiliates and employee of the institution or any of its
affiliates or an immediate family member is or has been an executive officer
within the last three years
Question: True or false - A trust committee is required for banks and FSAs
with trust power and must not include officers or an affiliate who significantly
participates in the administration of fiduciary activities regardless of size
Ans: True
Question: True or false - National banks and FSAs who have securities
registered with the SEC must have the following committees that are
composed entirely of outside directors; audit, compensation, and corporate
governance/nominating committees
OCC UCE DECK 1 Questions with
Detailed Verified Answers
Question:Goal of the overall control system?
Ans: help maintain authority, recognize and identify the need for timely
reporting and information
Question: Goal of internal control system?
Ans: protect the banks assets, assure integrity of financial and operating
records.
Question: Effective audit program depends on?
Ans: competence and independence of the auditor. Proper scope and
adequate procedures
Question: Chapter 7 bankruptcy. Who can file, what happens to debt?
Ans: This type of bankruptcy can be filed by individuals, corporations, and
partnerships. Complete liquidation of assets to pay off debt. Remaining debt is
discharged.
Question: Chapter 11 bankruptcy; who can file, what happens to the debt?
, Page | 2
Ans: Type of bankruptcy available to individuals, corporations, and
partnerships, but primarily businesses. allows debtor to remain in operation
while be sheltered from some of its debt.
Question: Chapter 9 bankruptcy; who can file?
Ans: only available to municipalities
Question: Chapter 13 bankruptcy; who can file what happens to debt?
Ans: Known as the wage-earner bankruptcy - reorganizes debt to allow
repayment under a 3-5 year plan. Creditors unable to pursue legal action. Can
not be filed by partnerships or corporations
Question: Is an audit committee required for FSAs and Banks with assets
between $500 million or more and less than $1 billion?
Ans: Yes. The audit committee should be a majority of outside directors.
Question: Is an audit committee required for FSAs and Banks with assets of $1
billion or more?
Ans: Yes, and the audit committee has to be all outside directors.
Question: Are banks and FSAs with assets between $500 million or more and
less than $1 billion required to file an internal control over financial reporting?
, Page | 3
Ans: No. Only institutions with $1 billion or more at the beginning of the fiscal
year are required to file a report on internal controls over financial reporting
Question: For 12 CFR 363 purposes, if an outside director owns or controls
atleast what percentage of stock before the rest of the board must determine
if that director would interfere with the directors ability to be independent?
Ans: 10%
Question: For 12 CFR 363 purposes when will a director not be considered
independent of management?
Ans: the director serves or has served within the last three years as a
consultant, advisor, promoter, underwriter, legal counsel, or trustee of or to
the institution or its affiliates and employee of the institution or any of its
affiliates or an immediate family member is or has been an executive officer
within the last three years
Question: True or false - A trust committee is required for banks and FSAs
with trust power and must not include officers or an affiliate who significantly
participates in the administration of fiduciary activities regardless of size
Ans: True
Question: True or false - National banks and FSAs who have securities
registered with the SEC must have the following committees that are
composed entirely of outside directors; audit, compensation, and corporate
governance/nominating committees
