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When communicating a decision up the organization's chain of command, consulting with outside experts can help a risk management professional do which one of the following? A. Seek feedback from stakeholders B. Stay focused on the organization's objectives C. Define the organization's risk appetite D. Enhance stakeholders' confidence in the process - ANSD Which of the following risk management program goals is an essential goal for all public entities? A. Earning stability B. Continuity of operations C. Growth D. Survival - ANSB The traditional definition of risk management reflects the traditional concept of risk as A. Both positive and negative. B. Negative. C. Uncontrollable. D. Strategic. - ANSB During the past year, International Toys has undertaken four capital projects. The company has renovated and refurbished one of its aging warehouse buildings. It has purchased the most recent version of its current order processing computer software. It has added two trucks to its fleet of delivery vehicles. Lastly, it has purchased a new production machine that will allow it to launch a new product line. Which one of the following company projects is the most speculative risk? A. The two new trucks B. The warehouse refurbishment C. The software upgrade D. The new production machine - ANSD Which one of the following statements is true regarding the basic measures that apply to risk management? A. Consequences measure the degree to which an occurrence could positively or negatively affect an organization. B. Hedging is a risk management strategy that can reduce the risk of correlation. C. Risk increases as volatility decreases. D. Longer time horizons are generally less risky that shorter ones. - ANSA Which one of the following provides a measure of the maximum potential damage associated with an occurrence? A. Exposure B. Duration C. Underwriting risk D. Maximum probable loss - ANSA Samuel was recently hired as a risk management professional for Parker Property Management. He has been asked by senior management to review the organization's current insurance policies to make sure that the organization is adequately protected, and also see if
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there are any opportunities to save on the premiums. Samuel must do which one of the following through internal communication before he will be able to complete this task? A. Determine the organization's risk appetite B. Identify all of the risks that the organization faces C. Earn the confidence of the organization's board of directors D. Become familiar with industry regulations - ANSA Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a need for many organizations to evaluate and manage their A. Supply-chain risk. B. Derivative risk. C. Compliance risk. D. Political risk. - ANSA Risk management professionals must collaborate with data analysts during which two steps of the risk management process? A. Treat risks and monitor risk treatments B. Scan the environment and analyze risks C. Analyze risks and monitor risk treatments D. Identify risks and treat risks - ANSC Asking a question such as "How do you think this will work out?" can help a speaker do which one of the following? A. Request feedback and determine if the message has been understood B. Gain the support of executives and decision makers C. Build trust among a diverse group of individuals D. Deliver a message that recipients don't want to hear - ANSA Carla, the risk manager, was asked by senior management to deliver a presentation on cyber risk at an all employees meeting. Even though she was only allotted 30 minutes for her presentation, Carla felt that cyber risk was a very real risk for the corporation and she wanted employees to leave with some fear of it. She wanted to provide employees with as much technical information as possible, and familiarize them with all of the important jargon. Less than 20 minutes into her presentation, Carla could tell that many of the employees were not paying any attention to her presentation. Which one of the following steps in the communication process had Carla failed to consider? A. Pay attention to your body language B. Ask for feedback C. Analyze your audience D. Set a clear communication objective - ANSC Before speaking with a group or individual, the speaker should think about what he or she wants the other person(s) to do as a result of the conversation. Which one of the following steps in the communication process does the speaker complete by doing this? A. Deliver a message the recipient(s) want to hear B. Set aside judgement C. Set a clear communication objective D. Analyze your audience - ANSC
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A. Align and integrate B. Establish accountability C. Scan environment D. Allocate resources - ANSC Which one of the following best explains how most smart products potentially improve risk management? A. They measure worker fatigue. B. They scan and inspect structures for unsafe conditions. C. They assess risks in dangerous areas. D. They generate big data to which advanced analytics can be applied. - ANSD Clear-Rite Company specializes in the clean-up of hazardous chemical spills. Workers performing clean-up operations must use safety suits to prevent exposure to the chemicals. The suits include pulse and respiration monitors, body temperature sensors, and chemical sensors. The monitors and sensors report data to a mobile operations center which is deployed to each clean-up site. The pulse and respiration monitors and the sensors that are part of the protective gear are called A. Magnetometers. B. Drone technologies. C. Wearable technologies. D. Accelerometers. - ANSC Data Entry Company (DEC) offers customers data entry services. A customer can hire DEC to enter survey data to be analyzed. Many DEC employees spend long hours entering data on a computer. DEC has experienced neck strain and wrist pain complaints from their employees, increasing the company's workers compensation costs. DEC investigated the complaints of its data-entry employees. DEC adopted curved keyboards for data entry, wrist- rests for those entering data, and uniform chair heights and display monitor heights to reduce neck strain claims. The science of designing work spaces based on the health concerns of those who will operate in the work space is called A. Big data. B. Accelerometer technology. C. Predictive analytics. D. Ergonomics. - ANSD Which one of the following statements about the use of drones is true? A. The use of drones is limited to military applications. B. Space and weight limitations prevent drones from being equipped with sensors and cameras. C. Drones may be equipped with cameras that relay data in real-time. D. The reliance on humans to operate drones severely limits their application for commercial uses. - ANSC Many auto manufacturers have automated a portion of their assembly lines by introducing a smart product. The smart product performs repetitive tasks, such as making the same weld on each vehicle frame as it passes the smart product. These smart products, which can be fixed or mobile, reduce repetitive motion injuries that humans might suffer. They can also be used to perform dangerous tasks and in heavy-lifting jobs. These smart products are called
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A. Wearables. B. Automated sensors. C. Robots. D. Drones. - ANSC Take Your Order (TYO) is a company that specializes in taking product orders for vendors. The manufacturer of a product can run a television or internet ad for a product with a toll-free number. Customer calls for the products are routed to TYO, where one hundred operators are available to receive the calls. Each operator is assigned a cubicle with a computer terminal, video display monitor, and a telephone. TYO experienced high workers compensation claims from its operators, claiming neck strain, eye strain, and wrist pain. In an effort to reduce such injuries, TYO evaluated each operator's work area. The height of chairs and video monitors were adjusted, curved computer keyboards and wrist-rests were provided, and the telephones were replaced with audio headsets. Workers compensation costs dropped significantly. The science of designing work spaces based on interaction between people and the equipment in the work s - ANSD A municipal water plant installed water flow sensors and water pressure sensors on the water pipes leaving the plant. The sensors make sure water is flowing properly and that there are no leaks or clogs which could produce a loss. These types of sensors are A. Thermal sensors. B. Mechanical sensors. C. Biochemical sensors. D. Radiant sensors. - ANSB In addition to metal detectors, many airports have installed a second type of scanning technology for checked baggage and cargo. The checked bags and cargo pass through a portal with scanners programmed to detect and test for explosive trace fumes. These scanners, which detect explosives based on air samples, are an example of what type of sensor used for risk assessment and control? A. Radiant sensors. B. Thermal sensors. C. Biochemical sensors. D. Mechanical sensors. - ANSC AMRM Insurance Company sells insurance in Virginia, North Carolina, South Carolina, and Georgia. The company has compiled a policyowner data base that can be used to send text messages when hurricanes approach. The company provides early warnings, storm updates from the National Weather Service, and hurricane safety measures. The company credits the system with reduced hurricane claims. The use of the texting system is an example of A. Preventive analytics. B. Artificial intelligence. C. Sensor networks. D. Experience rating. - ANSA In an effort to reduce expenses, increase profitability, and reduce human errors; ABC Insurance Company decided to automate most of its personal lines underwriting function. The company now uses standardized application forms that are submitted electronically to one of the company's regional offices. At each regional office, a computer with a scanner
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D. Risk management matrix. - ANSA Precision Electronic Components manufactures circuit boards, microchips, and other electronic products. Given the precision necessary for their products, the manufacturing environment must be controlled. Temperature, humidity, static electricity and other factors must be monitored. After losing several batches of products due to human monitoring failures and imprecise adjustments, the company moved to a system of sensors. The sensors monitor and regulate temperature, humidity, static electricity, and other factors. The sensors transmit data to and from each other, and the manufacturing environment is continuously adjusted to assure production is successful. The network of sensors transmitting data and the autonomous corrective actions without human interaction is called A. Sensitivity analysis. B. Computer-directed manufacturing. C. Web-based manufacturing. D. The Internet of Things. - ANSD It is necessary to assess the risk appetite of a business supplier prior to doing business because understanding the risk appetite allows the organization to A. Ascertain whether the relationship is a good fit. B. Negotiate better prices and delivery times. C. Better control its production. D. Leverage its payments to the supplier to the organization's advantage - ANSA An organization evaluates key stakeholders' attitude toward risk in order to A. Understand what risks are acceptable and to develop an effective enterprise-wide risk management program. B. Understand acceptable risks and gauge its ability to attract new shareholders. C. Understand acceptable risks and gauge its ability to raise capital. D. Understand the risk appetite in order to determine what information is disseminated. - ANSA A speaker imparts information in verbal communications by A. Using appropriate facial expressions and gestures while other parties express their opinions and concerns. B. Expressing facts and emotions quickly, inviting written questions for discussion at a future session. C. Having good listening skills and expressing facts and emotions through words and sometimes visual displays. D. Listening and verbally responding with anecdotes of prior meetings, leveraging humor as opposed to facts for discussion. - ANSC Which one of the following should be part of an organization's standard operating procedures (SOPs) concerning external stakeholder communications? A. Instructions to always use written communication, rather than verbal or nonverbal communication B. Instructions regarding what types of information can and cannot be released C. Instructions requiring the use of formal, rather than informal communication D. Instructions to avoid the use of social media - ANSB
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North American Furnishings has been in business for 18 years. The organization's primary objectives are profitability and bottom-line results. It always sets aggressive goals. North American Furnishings values its customer bases. Which one of the following types of corporate culture exists at North American Furnishings? A. Hierarchy B. Clan C. Market D. Adhocracy - ANSC After opening its third store, Shoehorn Shoes decided to purchase new inventory tracking software for all of its stores. Which one of the following external or internal environments does this decision relate to? A. Operations environment B. Physical environment C. Economic environment D. Product environment - ANSA Senior management of CAZ Company decides to cut its involvement with the local youth association and no longer allow its employees to work with kids during business hours. Additionally, they will no longer fund the Youth House. Which one of the following best describes how this action may affect its risk management profile? A. Corporation may increase its external social risk by negating any goodwill the community has for the company. B. Corporation may increase its financial exposure by not having tax credits to offset its profits or losses. C. Corporation may decrease its external political risk by removing itself from any community involvement. D. Corporation may decrease its operations environment as the staff will have more time to devote to the company. - ANSA Which one of the following organizational policies or practices is based on a code of ethics? A. An annual compliance audit of each field underwriting office that is conducted by the home office staff B. The designation of 2 workdays a year for employees to participate in local civic and volunteer activities C. A company policy that offers a 10 percent discount to teachers and members of the military D. A disclosure requirement regarding any potential conflict of interest an accountant might have in working with specific clients - ANSD Which one of the following statements is correct regarding an organization's code of ethics? A. The code of ethics should provide an organization with a set of parameters within which it should operate, with little room for interpretation. B. The code of ethics should provide a list of dos and don'ts that employees can use as a framework in making day-to-day decisions. C. The code of ethics should include principles and concepts that are dynamic enough to remain relevant in a rapidly changing business environment.
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B. Allows more independence for the risk centers so that they are not burdened with procedures. C. May segregate risks to protect the larger organization if the risk center fails. D. Allows for participation by operational managers who may contribute to the risk analysis.
- ANSD A vehicle manufacturer found that the exhaust system in certain models was not working properly. Some exhaust gases were releasing into the vehicle body. Rather than recalling the vehicles, they were shipped to South American markets. The manufacturer A. Is socially responsible because it shipped the vehicles out of the country thereby avoiding any US casualties. B. Is socially responsible because it does not force any individual to buy the vehicle. C. Has ignored its social responsibility as well as the risks involved with these actions. D. Has decided to transfer the risk to South American markets avoiding financial penalties. - ANSC Lucy is a chef at a restaurant. She is growing tired of working such long hours and not reaping the financial benefits. Lucy has been saving money with the goal of opening her own restaurant. She recently talked to a financial advisor about the options market as a way to grow her savings quickly. The financial advisor explained that it is a risky choice, but could potentially allow her to reach her goal of owning a restaurant in the near future. Lucy has decided to invest her savings in the options market. Which one of the following types of risk attitude does Lucy exhibit? A. Risk optimizing B. Risk managed C. Risk obsessed D. Risk seeking - ANSD Which one of the following best explains how a risk-managed organization views a proposed new product line? A. It determines the rewards of a new alternative and may underemphasize the impacts, variances and negative effects. B. It weighs the risk-reward relationship while realistically evaluating potential outcomes and consequences. C. It attempts to join with another organization for a joint venture taking little of the actual risk on itself. D. It seeks methods of transferring the potential risks or avoids the risk totally. - ANSB The main advantage of a formal internal communication system is that A. Employees do not have direct access to each other. B. Formal internal communications takes time which may resolve issues. C. Individuals know to whom to report. D. It is easily accessed. - ANSC BD Company has made widgets for over 79 years using the same production techniques for fear of the huge costs from potential consumer lawsuits if production is changed and product quality suffers. With respect to its risk attitude, this organization would be classified as A. Risk seeking. B. Risk naïve.
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C. Risk avoiding. D. Risk optimizing. - ANSC The service representatives for Tauton Insurance will be eligible for a bonus only if the customer retention rate is increased by 5%. This is an example of which one of the following standards? A. A critical success factor derived from a strategic objective B. A severe risk tolerance level C. A key performance indicator based on financial ratios D. A corrective measure linked with an identified tolerance level - ANSD Key risk indicators (KRIs) help organizations identify issues that can lead to losses. Effective KRIs are based on a company's A. Organizational structure. B. Product or industry. C. Strategic objectives. D. Sales volume. - ANSC An organization's goals and objectives are met by establishing and attaining measurable standards for the many activities it pursues. Which one of the following statements is correct with respect to those standards? A. A key performance indicator (KPI) answers the question, "What will make our organization a success?" B. Generally, an organization's risk tolerance has little impact on its critical success factors (CSFs) and key performance indicators (KPIs). C. Organizations with key performance indicators (KPIs) established for critical success factors (CSFs) will typically achieve organizational goals. D. For each key performance indicator (KPI), there is a tolerance level for how much deviation from the standard established in the KPI will be acceptable. - ANSD Organizations use key risk indicators (KRIs) to plan for and respond to risk. Which one of the following statements is correct with respect to KRIs? A. A KRI can reveal an upward trend in the level of a risk that, if it continues, will exceed the designated risk threshold for that risk. B. KRIs are effective internal indicators of changes such as budget variances; however they are not effective external indicators. C. An organization's risk criteria, predefined tolerance ranges that measure variances from expected outcomes, are based on risk thresholds. D. Risk criteria relating to an organization's strategic risks generally do not serve as the bases for KRIs, which tend to be operational in focus. - ANSA Organizations use key risk indicators (KRIs) to plan for and respond to A. Failure. B. Risk. C. Questions. D. Emergencies. - ANSB Which one of the following statements is true regarding the business process management (BPM) life cycle model? A. The model is driven by the collaboration of human and technological input.
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D. High customer retention - ANSD Which one of the following answers the question, "What shows we are a success?" A. Risk tolerance level B. Strategic objective C. Critical success factor D. Key performance indicator - ANSD Successful organizations have goals and objectives. A financial or nonfinancial measurement that defines how successfully an organization is progressing toward its long-term goals is referred to as A. An objective gauge (OG). B. A critical success factor (CSF). C. A key performance indicator (KPI). D. An operating standard (OS). - ANSC An organization has established a key performance indicator to "reduce employee injuries by 6%." Which one of the following would indicate a low risk tolerance for this KPI? A. Reduce employee injuries by 2% B. Reduce employee injuries by 4% C. Reduce employee injuries by 5 to 6% D. Employee injury rate remains unchanged - ANSC Which one of the following is a main characteristic of effective key risk indicators (KRIs)? A. They define the boundaries of risk tolerance. B. They are lagging in nature. C. They are based on quantifiable information. D. They measure progress toward achieving objectives. - ANSC One of the strategic objectives for Cromley Insurance Group is customer satisfaction. Which one of the following is a critical success factor (CSF) that would help refine this strategic objective? A. High customer retention B. Reduce claim activity by 4 to 6% C. Increase retention ratio by 5% D. High profitability - ANSA Which one of the following terms refers to information used as a basis for measuring the significance of a risk? A. Risk criteria B. Risk tolerance C. Risk appetite D. Risk threshold - ANSA Which one of the following is an example of an external key risk indicator (KRI) that a manufacturer might monitor? A. Amount of budget variances B. Number of employee injuries C. Age of accounts payable D. Cost of raw materials - ANSD
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Which one of the following measures the progress an organization has made toward attaining its goals within a specific amount of time? A. Key performance indicator B. Risk tolerance level C. Critical success factor D. Key risk indicator - ANSA Organizations use key risk indicators (KRIs) to plan for and respond to risk. Which one of the following statements is correct with respect to KRIs? A. To best manage risk, an organization should have as many KRIs as possible. B. To be effective, KRIs should be detailed and specific. C. KRIs are based on quantifiable information and support management decisions. D. KRIs are usually only established for the executive level within an organization. - ANSC Key risk indicators (KRIs) can be established for various levels within an organization. Which one of the following levels of an organization usually has the most detailed KRIs? A. Department level B. Board of director level C. Business-unit level D. Senior management level - ANSA Some best practices models call for the formation of a risk committee with a risk management focus at the organization's executive management level. Which one of the following statements best describes one of the responsibilities of an executive-level risk committee? A. To monitor the organization's compliance with established risk limits and how noncompliance is addressed B. To oversee exposures of the organization's critical risks and advise the board on risk strategy. C. To approve the organization's risk management strategies, including their design and implementation. D. To assist the board in establishing the organization's risk appetite and risk tolerance levels
- ANSC Which one of the following statements is true regarding separation of ownership and control in corporations? A. The incentive for managers and non-management board members to pursue their own interests at the expense of shareholders gives rise to agency costs. B. Corporate governance is not concerned with the separation of ownership and control. C. Shareholders retain decision-making authority while managers control business operations. D. Limited liability of shareholders impedes the separation of ownership and control in corporations. - ANSA Corporate governance is evolving towards the separation of oversight and control for boards of directors. This separation may be accomplished by A. Requiring a company executive to chair each board committee. B. Requiring the majority of the directors to be outside directors. C. Requiring the audit committee to be comprised of inside directors.
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The board of directors must use a thorough understanding of the organization's overall risk philosophy to determine the amount of risk the organization is willing to seek or accept in the pursuit of long-term objectives. This amount of risk is called the organization's A. Probable maximum loss. B. Retention level. C. Risk appetite. D. Maximum possible loss. - ANSC A corporate board of director's chair person is elected by A. The board of directors. B. The shareholders. C. Executive management. D. Proxies. - ANSA Which one of the following statements is correct with respect to the role of a board of directors in risk oversight? A. Increasing pressure on boards of directors to provide greater enterprise-wide risk oversight comes from sources such as investors, rating agencies, and regulators. B. A 2012 survey of executives revealed that practically all boards have formally assigned risk oversight responsibility to a board committee. C. A board's risk management strategy and broad objectives typically have little effect in setting the tone for risk management across the entire organization. D. Financial services organizations are far less subject to regulatory pressure for increased transparency and risk oversight than are corporations in nonfinancial business sectors - ANSA Which of the following statements best describes the risk governance role and responsibility of a corporate board of directors? A. To set the organization's risk appetite and to stay informed of the most significant risks to the organization and management's responses. B. To convert strategy into operational objectives and to identify and assess the impact of risks on the achievement of the objectives. C. To establish risk management policies, to define risk management roles and responsibilities, and to set risk management implementation goals. D. To assign risk management procedures for day-to-day functions and internal controls. - ANSA Corporate governance is defined as A. The reporting chain of command within an organization. B. A diagram of reporting relationships and levels of authority within an organization. C. The mechanisms and procedures that determine how corporations are run. D. A body of law that specifies how corporations are legally formed and chartered. - ANSC The fees paid to external auditors to verify the corporation's financial statements are an example of A. A bonding cost. B. A fiduciary cost. C. A monitoring cost. D. An incentive alignment cost. - ANSC
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Organizations are increasingly creating chief risk officer (CRO) positions. Which one of the following statements is correct with respect to CROs? A. The CRO's rank and importance to the board of directors are equal to those of the organization's other executive officers. B. Typically, a CRO analyzes, measures, and monitors risk; compiles reports; and facilitates risk workshops without the need for staff. C. CROs' roles are relatively standardized from industry to industry; they focus primarily on measuring and controlling risk. D. A 2012 survey indicated that, in companies with annual revenue greater than $20 billion, fewer than 20% had created a CRO position. - ANSA One corporate governance issue is accountability of directors. One method to increase accountability of directors is to A. Include more inside directors. B. Decrease the independence of audit and compensation committees. C. Conduct regular meetings of outside directors without management being present. D. Ensure that the chief executive officer serves as board chairman. - ANSC Which one of the following statements regarding the structure and role of a board of directors is true? A. The board of directors must be comprised of ten directors, with an equal number of inside and outside directors. B. Members of the board elect a director to be chairman of the board. C. The board is responsible for the day-to-day decisions at a corporation. D. Members of the board are appointed by the president of the company. - ANSB Which one of the following is the term used for a person—usually a manager—who advocates for and supports a specific aspect of the risk management process in an organization? A. Risk manager B. Risk champion C. Chief risk officer (CRO) D. Internal auditor - ANSB All of the following are true regarding the composition of boards of directors, EXCEPT: A. Corporate boards are uniform in size with 13 directors. B. Boards include both inside directors and outside directors. C. Directors elect the chairman of the board. D. Outside directors serve on the compensation committee. - ANSA Which one of the following statements regarding corporate governance and risk oversight is true? A. Nonfinancial organizations are subject to greater regulatory pressure for transparency and astute risk management than financial organizations. B. Some board of directors delegate risk oversight tasks to board committees, such as the audit committee, risk committee, and compensation committee. C. Board oversight should be limited to past history and current conditions, and should avoid consideration of uncertain future events.
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A. Data capture. B. Data quality. C. Data integration. D. Data governance. - ANSA Which one of the following provides the frame of reference needed so data can be used appropriately for analysis and decision-making? A. Metadata B. Data lineage C. Data custodian D. Data virtualization - ANSA Under the General Data Protection Regulation (GDPR), a data controller's role is to A. Represent the business aspects of data governance. B. Define the metrics used to measure an organization's overall data quality. C. Define how and for what purpose personal data should be processed. D. Manage the flow of data for the rest of the organization. - ANSC Encrypting data to block its use if stolen is an example of a A. Software-based security solution. B. Cyber-threat inventory approach. C. Incident response plan. D. Hardware-based security solution. - ANSA Data governance provides A. Definitions, standards and procedures for how data is used. B. The internal data entry processes needed to capture accounting transactions. C. A road map that details where data is located. D. A dynamic view of data without needing to move it between systems. - ANSA In terms of data quality principles, validity is defined as A. The accuracy of data within predefined and accepted parameters or values. B. The process of tracing data from its source to its destination. C. The true value of data relative to the business information being analyzed. D. The extent that each dataset contains all elements necessary for business needs. - ANSA Encrypting data is an example of A. An enterprise risk management program B. A regulatory compliance program. C. A data governance program. D. A data security program. - ANSD Cyber extortion is another name for A. Phishing. B. Bitcoin C. Ransomware. D. Social engineering. - ANSC Donna's Dog Treats has been very successful in the Boston area and would like to expand to new cities. Donna knows that she cannot make this decision based on customer advice and blind faith. She has collected internal financial and operational data as well as external data from reliable sources. Donna has hired an analyst to review the data quality. The analyst is
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reviewing the data to see if it includes the demographics for each target city that Donna is considering. Which one of the following data-quality principles is being evaluated? A. Comprehensiveness B. Appropriateness C. Reasonableness D. Validity - ANSA To gain a competitive advantage, maintain profitability, and satisfy customers an organization must A. Be able to trust its data. B. Pay attention to the marketplace. C. Adopt current accounting rules. D. Have an effective risk management program. - ANSA Malware is defined as A. Software designed to cause damage. B. Software technology used to encrypt data. C. A hardware-based security breach. D. A tool for managing data security. - ANSA Which one of the following is an example of a data governance tool? A. Metadata B. Risk Management C. Data integration D. External Policy - ANSD A data governance committee (DGC) A. Is cross-functional. B. Cleanses big data. C. Reports to risk management. D. Is comprised of IT architects. - ANSA In accordance with the Three Lines of Defense Model, how does risk management act as the second line of defense? A. Risk management alerts internal audit of potential threats within a department and works with internal audit to neutralize the threat. B. Risk management supports and monitors operational management's implementation of risk management practices. C. Risk management provides oversight to the operational management's assessment of risk and internal controls. D. Risk management has authority to initiate activity demanding an external audit should a risk be deemed imminent. - ANSB Which one of the following best describes why many purchasers require an ISO 9001 certification prior to buying a business? A. To have an outside audit company attest to its conclusive audit. B. To ensure that internal standards and controls are in place. C. To transfer liability should the financial statements prove erroneous. D. To obligate the seller to perform audits for conformance prior to the sale. - ANSB
