IFA IFA Corporate Governance & Risk Management

Question 1

What is corporate governance?

Accepted Answer

The system by which companies are directed and controlled to balance the interests of stakeholders

Answer

The process of filing annual tax returns

Answer

The day-to-day management of accounting records

Answer

The process of external auditing

Question 2

What is the primary role of a company's board of directors?

Accepted Answer

To provide strategic oversight, monitor management, and safeguard shareholder interests

Answer

To manage daily operations and customer relationships

Answer

To prepare the annual financial statements

Answer

To negotiate supplier contracts

Question 3

What distinguishes non-executive directors (NEDs) from executive directors?

Accepted Answer

NEDs are not employed full-time by the company and bring independent oversight without managing operations

Answer

NEDs are paid more than executive directors

Answer

NEDs are only required in public companies with over 500 employees

Answer

NEDs are responsible for preparing financial statements

Question 4

What is an enterprise risk management (ERM) framework?

Accepted Answer

A structured approach to identifying, assessing, and managing risks across the entire organization

Answer

A software system for tracking customer invoices

Answer

A method for calculating tax liabilities

Answer

An insurance policy for business assets

Question 5

Which governance principle ensures that decision-makers are answerable for their actions?

Accepted Answer

Accountability

Answer

Transparency

Answer

Equity

Answer

Sustainability

Question 6

What is 'risk appetite' in the context of corporate risk management?

Accepted Answer

The level and type of risk an organization is willing to accept in pursuit of its objectives

Answer

The amount of profit a company expects to earn

Answer

The maximum insurance coverage a company can obtain

Answer

The minimum return required on investments