Practice Test Geeks(CFC) Certified Financial Controller Practice Test
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CFC Risk Management & Insurance Flashcards

6 cards from real CFC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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

    Answer: COSO ERM Framework

    The COSO Enterprise Risk Management (ERM) Framework is the leading standard US financial controllers use to identify, assess, and respond to enterprise-wide risks.

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

    Answer: Risk identification

    Risk identification is the process of recognizing potential events or conditions that could negatively impact the achievement of organizational objectives.

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

    Answer: Risk remaining after controls are applied

    Residual risk is the level of risk that remains after management has implemented controls and other risk responses.

  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?

    Answer: D&O Insurance

    Directors and Officers (D&O) insurance covers legal defense costs and damages for claims alleging wrongful acts by corporate leaders.

  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?

    Answer: $100,000

    EMV is calculated by multiplying the probability by the impact: 20% × $500,000 = $100,000.

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

    Answer: Risk transfer

    Risk transfer moves the financial burden of a risk to another party, most commonly through purchasing insurance or contractual indemnification clauses.