CCM Professional Standards & Competencies 2

Question 1

A credit manager discovers that a colleague is sharing confidential customer financial data with a competitor. What is the MOST appropriate immediate action?

Accepted Answer

Report the breach to senior management and compliance

Answer

Confidentiality breaches must be reported to management and compliance to protect the organization and comply with legal obligations.

Question 2

Which competency best describes a credit manager's ability to assess the financial health of a new applicant using ratio analysis, cash flow review, and industry benchmarks?

Accepted Answer

Credit underwriting

Answer

Credit underwriting encompasses the analysis of financial statements and risk indicators to evaluate a prospective borrower's creditworthiness.

Question 3

Under NACM's Code of Ethics, a credit professional must avoid situations that create what type of conflict?

Accepted Answer

Conflict of interest

Answer

NACM's Code of Ethics requires members to identify and avoid conflicts of interest that could compromise objective decision-making.

Question 4

Continuing education and professional development are important for CCM holders primarily because they:

Accepted Answer

Ensure practitioners stay current with evolving laws, practices, and standards

Answer

Ongoing education maintains the competency of CCM holders as credit regulations, economic conditions, and best practices continuously evolve.

Question 5

A credit manager is asked to approve a large credit line for a company owned by a personal friend. The BEST course of action is to:

Accepted Answer

Disclose the relationship and recuse themselves from the decision

Answer

Disclosing the relationship and stepping away from the decision eliminates the conflict of interest while allowing the credit request to be evaluated objectively.

(CCM) Certified Credit Manager Practice Test

(CCM) Certified Credit Manager Practice Test

CCM Professional Standards & Competencies 2