CSM Risk Management & Corporate Governance 2

Question 1

Which board committee is primarily responsible for overseeing the integrity of a company's financial statements and internal controls?

Accepted Answer

Audit Committee

Answer

The Audit Committee oversees financial reporting, internal controls, and the external audit process to ensure integrity of financial statements.

Question 2

A company's enterprise risk appetite statement should be MOST closely aligned with which of the following?

Accepted Answer

The strategic objectives and stakeholder expectations

Answer

Risk appetite must be calibrated to the organization's strategic objectives and what key stakeholders consider acceptable levels of uncertainty.

Question 3

Which risk treatment option involves shifting potential financial loss to a third party, such as through insurance?

Accepted Answer

Risk transfer

Answer

Risk transfer moves the financial consequence of a risk to another party, most commonly through insurance or contractual arrangements.

Question 4

In corporate governance, the concept of 'separation of powers' is best exemplified by which practice?

Accepted Answer

Separating the roles of CEO and Board Chair

Answer

Separating the CEO and Board Chair roles prevents excessive concentration of power and ensures independent oversight of management.

Question 5

A risk heat map plots risks according to which two primary dimensions?

Accepted Answer

Likelihood and impact

Answer

A risk heat map visualizes risks by mapping their probability of occurrence (likelihood) against their potential consequence (impact).

(CSM) Certified Strategic Manager Practice Test