CFC CFC Risk Management & Insurance

Question 1

Which risk management framework is most commonly referenced by US financial controllers for enterprise-wide risk oversight?

Accepted Answer

COSO ERM Framework

Answer

ISO 9001

Answer

PRINCE2

Answer

Six Sigma

Question 2

A financial controller identifying risks that could prevent the company from achieving its strategic objectives is performing which step of the ERM process?

Accepted Answer

Risk identification

Answer

Risk response

Answer

Risk monitoring

Answer

Risk acceptance

Question 3

What does 'residual risk' mean in the context of enterprise risk management?

Accepted Answer

Risk remaining after controls are applied

Answer

Risk that cannot be insured

Answer

Risk transferred to a third party

Answer

Risk accepted without mitigation

Question 4

Which type of insurance protects a company's directors and officers against personal losses from lawsuits alleging wrongful acts in their capacity as leaders?

Accepted Answer

D&O Insurance

Answer

General Liability Insurance

Answer

Professional Indemnity Insurance

Answer

Workers' Compensation

Question 5

A financial controller calculates that a risk event has a 20% probability and a $500,000 potential impact. What is the expected monetary value (EMV) of this risk?

Accepted Answer

$100,000

Answer

$500,000

Answer

$25,000

Answer

$250,000

Question 6

Which risk response strategy involves shifting the financial consequences of a risk to a third party through insurance or outsourcing?

Accepted Answer

Risk transfer

Answer

Risk avoidance

Answer

Risk acceptance

Answer

Risk mitigation