CGFO Risk Management 4

Question 1

Which governmental risk management concept refers to losses that have occurred but have not yet been reported to the risk management office?

Accepted Answer

Incurred but not reported (IBNR) claims

Answer

IBNR reserves account for claims that have already happened but have not yet been filed or discovered, which is critical for accurate financial reporting.

Question 2

A county risk manager implements a driver safety training program to reduce auto liability losses. This is an example of which risk management technique?

Accepted Answer

Loss control / risk reduction

Answer

Loss control measures reduce the frequency or severity of losses; driver training targets the behavioral causes of automobile accidents.

Question 3

Under GASB Statement No. 10, how should a government report its participation in a risk-sharing pool on its financial statements?

Accepted Answer

As an expenditure/expense equal to premiums paid to the pool

Answer

GASB 10 requires governments participating in risk pools to report the amounts contributed to the pool as an expenditure or expense in the period incurred.

Question 4

Which of the following is the most accurate description of 'sovereign immunity' as it relates to government liability?

Accepted Answer

The historical doctrine that protects governments from being sued without their consent

Answer

Sovereign immunity is the legal principle that a sovereign government cannot be sued without its consent, though most states have waived immunity to varying degrees through tort claims acts.

Question 5

When a risk manager assesses a hazard using a 'probability x impact' matrix, the quadrant with HIGH probability and HIGH impact should be treated with which priority?

Accepted Answer

Transfer or mitigate immediately — highest priority

Answer

High-probability, high-impact risks require immediate attention through aggressive mitigation or transfer strategies because they pose the greatest threat to the organization.

(CGFO) Certified Government Finance Officer Practice Test

(CGFO) Certified Government Finance Officer Practice Test

CGFO Risk Management 4