CAIIB · Advanced Business & Financial Management · Module A — The Management Process
CAIIB ABFM Unit 6 — Controlling: Free MCQs with Explanations
By Swarnakshi Jha (ex-banker) · Updated 29 October 2026 · Paper III of the December 2026 cycle (Sunday 13 December 2026)
This is the free practice page for CAIIB ABFM Unit 6 — Controlling (Module A — The Management Process). The CAIIB Mock Centre holds 154 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five practice questions with explanations, and the traps that cost marks.
ABFM · Module A154 MCQs in the Mock Centre5 free belowPaper on 13 December
Key facts examiners test from this unit
Controlling: basics, characteristics, advantages and limitations — controlling, the last function, checks that work follows plans, finds deviations and their causes, and corrects them.
Types of control, the control process, and planning and control — control works before, during or after the activity, in four steps, and it is planning's twin.
Traditional control techniques — traditional techniques: watching the work, break-even analysis, statistical reports and budgets.
Changed since the textbook
RBI: two-factor authentication for every digital payment from April 2026 (25 September 2025). RBI's Authentication Mechanisms for Digital Payment Transactions Directions, 2025 (25 September 2025), effective 1 April 2026, require every domestic digital payment to use at least two distinct factors of authentication, one of them dynamic and unique to the transaction. Issuers may apply extra risk-based checks, such as unusual device use or abnormal transaction patterns, and must fully compensate customers for any loss arising from non-compliance. Card issuers must also set up validation for non-recurring cross-border card-not-present transactions by 1 October 2026. Source: Entrackr report on RBI's authentication directions
RBI Master Direction on IT governance, risk, controls and assurance (7 November 2023). RBI's Master Direction on Information Technology Governance, Risk, Controls and Assurance Practices (7 November 2023), effective 1 April 2024, applies to banks, financial institutions, NBFCs and credit information companies. Source: RBI notification
5 free practice questions — tap an option
Five practice questions from this unit. Answers lock on the first tap, exactly as in the exam, and an explanation opens underneath. The Mock Centre has all 154 questions on this unit, from easy to tough, with caselets and key-in numericals, why every other option is wrong and the exam tip — and tracks your score and revision dates.
Question 1 of 5
A bank's control system tracks deposits, advances and costs closely, yet a steady fall in staff morale goes unnoticed until resignations rise. Which limitation of controlling does this show?
Why (d): Controlling works best where standards can be expressed in numbers; morale, job satisfaction and team spirit resist quantitative standards, so a decline can escape the system until it shows up elsewhere. External factors, staff resistance and cost are other limitations, but none explains why falling morale went unnoticed. (a) is wrong: Morale is internal, not an external factor. (b) is wrong: No resistance to controls is described. (c) is wrong: Cost does not explain the blind spot.
Question 2 of 5
Break-even analysis is also known as:
Why (d): The textbook says break-even analysis, or cost-volume-profit (CVP) analysis, shows how cost and volume relate at different levels of output. (a) is wrong: Responsibility accounting concerns centres of accountability. (b) is wrong: The Du Pont method concerns ROI. (c) is wrong: Critical path analysis concerns projects.
Question 3 of 5
A branch's staff-cost budget for the quarter is ₹40 lakh, but actual staff cost comes to ₹46 lakh because of overtime during an audit. What does budgetary control call for next?
Why (d): Budgetary control compares actual performance with the budget, analyses each variance and its cause, and leads to corrective action; ₹46 lakh against ₹40 lakh is an adverse variance of ₹6 lakh, here explained by audit overtime. Raising the budget to match the actual simply hides the variance, and spending above budget is adverse, not favourable. (a) is wrong: Raising the budget hides the variance. (b) is wrong: Spending above budget is adverse. (c) is wrong: The comparison is the point of budgetary control.
Question 4 of 5
In the Du Pont formula, ROI is the product of which two ratios?
Why (c): The textbook gives ROI = (net income ÷ sales) × (sales ÷ total investment): profit margin multiplied by investment turnover. (a) is wrong: That product is net income ÷ sales, only the margin. (b) is wrong: Both ratios are inverted. (d) is wrong: Those terms belong to break-even analysis.
Question 5 of 5
Which three properties of data do the objectives of IT controls protect?
Why (d): The textbook says the objectives of IT controls concern the confidentiality, integrity and availability of data, and the general management of the IT function. (a) is wrong: Those are groups of financial ratios. (b) is wrong: Those describe big data, not control objectives. (c) is wrong: Those are technical features.
0 of 5 answered.
Traps in this unit
Discipline is an advantage of control.
Controls cannot govern external factors.
Feedback control cannot rescue the finished activity.
Practise all 154 questions on Unit 6. The free CAIIB demo opens Units 1–2 of every paper with full explanations; the ABFM Online Mock Centre unlocks all 4,000+ ABFM questions, the full-length papers with caselets and key-ins, module mocks and Smart Revision for 18 months (₹1,499).
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