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GBA 3 Practice Exam |100 Questions| With Correct Solutions!!
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GBA 3 Practice Exam |100 Questions| With Correct Solutions!!
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Name: Score:100 Multiple choice questions
Term 1 of 100
Which of the following statements regarding the Social Security earnings test is (are) correct?
The earnings test applies only to dependents of a retired worker.
The earnings test starts after attainment of the full retirement age.
The earnings test does not apply to investment income, dividends, interest, rents and annuity
payments.
I and II only
Check Mark E. I, II and III
III only
I, II and III
Term 2 of 100
Internal controls for employee benefit plans generally fall into specific major categories. Which of
the following is (are) included among these major categories of internal controls?
Plan documentation and any amendments
Plan testing and administration
Controls at any third-party administrator
I and III only
II and III only
I, II and III
I only
,Term 3 of 100
Approximately how many individuals are working in occupations covered by Social Security?
E. 9 out of 90 workers
E. 9 out of 10 workers
E. 4 out of 10 workers
E. 9 out of 15 workers
Term 4 of 100
All the following statements concerning the Internal Revenue Service (IRS) and internal controls
of employee benefit plans are correct EXCEPT:
The irs does not require auditors to assess internal controls in employee benefit plans.
Auditors are solely responsible for ensuring internal controls are effective in employee
benefit plans.
Financial statements of employee benefit plans do not need to be reconciled by auditors
according to the irs.
The IRS has made it clear that auditors reconcile financial statements, and it is not the
responsibility of auditors to be concerned with internal controls.
Term 5 of 100
All the following statements regarding Employee Retirement Income Security Act (ERISA) plan
investments are correct EXCEPT:
Mutual funds are subject to direct regulation by ERISA.
Erisa mandates specific investment options for retirement plans.
Erisa does not apply to retirement plans.
Erisa requires retirement plans to have a minimum funding standard.
,Term 6 of 100
Under federal law, the value of benefits provided to an employee's same sex civil union partner:
Plan fiduciaries
Is not exempt from federal income tax
Reimbursing the employee only in the event he or she pays higher taxes as a result of the
international assignment
Unfunded excess benefit plans
Term 7 of 100
To be eligible for Social Security disability income benefits, a person must meet which of the
following requirements?
Be disability insured
Satisfy a 12-month waiting period
Be physically, not mentally, disabled
I and II only
E. 10 years
II only
I only
Term 8 of 100
An audit engagement letter should detail the responsibilities of the plan auditor. The plan auditor's
responsibilities include all the following EXCEPT:
Obtaining absolute assurance about whether the financial statements are free of material
misstatements, whether caused by error or fraud
Assessing the plan's compliance with relevant laws and regulations
Reviewing the plan's investment performance
Verifying the accuracy of participant data
, Term 9 of 100
Which of the following statements regarding prudent Employee Retirement Income Security Act
(ERISA) investments is (are) correct?
Modern portfolio theory is an important investment concept but not one associated with the
management of ERISA plan assets.
ERISA investments, to be prudent, must always follow mainstream and popular strategies.
Prudent investing is not judged on the basis of how the investment performed (i.e., its rate of
return).
I and III only
II only
I only
III only
Term 10 of 100
The auditor's letter following an audit of an Employee Retirement Income Security Act plan
includes which of the following?
Significant difficulties encountered during the audit
A description of the specifics testing thresholds or amounts used during the audit
The process management used to develop accounting estimates, including fair market value
estimates, and the basis for the auditor's conclusions as to the reasonableness of those estimates
I and III only
II and III only
I, II and III
III only
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