ARM 400 Segment B Flashcards by Shawna Stone

Organizations use key risk indicators (KRIs) to plan for and respond to

Select one:
A. Failure.
B. Emergencies.
C. Questions.
D. Risk.

D. Risk

How well did you know this?

Not at all

Perfectly

Which one of the following is a main characteristic of effective key risk indicators (KRIs)?

Select one:
A. They define the boundaries of risk tolerance.
B. They are based on quantifiable information.
C. They are lagging in nature.
D. They measure progress toward achieving objectives.

B. They are based on quantifiable information.

How well did you know this?

Not at all

Perfectly

Which one of the following measures the progress an organization has made toward attaining its goals within a specific amount of time?

Select one:
A. Key risk indicator
B. Critical success factor
C. Key performance indicator
D. Risk tolerance level

C. Key performance indicator

How well did you know this?

Not at all

Perfectly

Key risk indicators (KRIs) help organizations identify issues that can lead to losses. Effective KRIs are based on a company’s

Select one:
A. Sales volume.
B. Strategic objectives.
C. Product or industry.
D. Organizational structure.

B. Strategic objectives.

Effective KRIs are founded on an organization’s objectives. Management identifies areas of potential risk for each objective and then defines the information needed to measure and monitor the risks as they emerge or change.

How well did you know this?

Not at all

Perfectly

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

Select one:
A. An operating standard (OS).
B. A critical success factor (CSF).
C. An objective gauge (OG).
D. A key performance indicator (KPI).

D. A key performance indicator (KPI).

A key performance indicator (KPI) is a financial or nonfinancial measurement that defines how successfully an organization is progressing toward its long-term goals.

How well did you know this?

Not at all

Perfectly

Which one of the following statements is true regarding the business process management (BPM) life cycle model?

Select one:
A. The model is driven by the collaboration of human and technological input.
B. The model is designed to review one business process at a time.
C. The model is ineffective unless all five steps are completed on a continuous basis.
D. The model is primarily used by organizations in the manufacturing sector.

A. The model is driven by the collaboration of human and technological input.

How well did you know this?

Not at all

Perfectly

Which one of the following terms refers to information used as a basis for measuring the significance of a risk?

Select one:
A. Risk tolerance
B. Risk criteria
C. Risk appetite
D. Risk threshold

B. Risk criteria

How well did you know this?

Not at all

Perfectly

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?

Select one:
A. A critical success factor derived from a strategic objective
B. A corrective measure linked with an identified tolerance level
C. A key performance indicator based on financial ratios
D. A severe risk tolerance level

B. A corrective measure linked with an identified tolerance level

How well did you know this?

Not at all

Perfectly

Which one of the following answers the question, “What shows we are a success?”

Select one:
A. Strategic objective
B. Risk tolerance level
C. Critical success factor
D. Key performance indicator

D. Key performance indicator

How well did you know this?

Not at all

Perfectly

The business process management (BPM) life cycle incorporates five steps. Which one of the following best describes the first step in the BPM process?

Select one:
A. Processes are modeled to identify the organization’s response to what-if scenarios.
B. Processes are designed or redesigned by considering workflows and affected personnel.
C. Processes are tracked so that statistics on their performance can be gathered.
D. Critical processes that support achievement of the organization’s goals are selected for analysis.

B. Processes are designed or redesigned by considering workflows and affected personnel.

How well did you know this?

Not at all

Perfectly

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?

Select one:
A. KRIs are effective internal indicators of changes such as budget variances; however they are not effective external indicators.
B. 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.
C. An organization’s risk criteria, predefined tolerance ranges that measure variances from expected outcomes, are based on risk thresholds.
D. 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.

D. 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.

How well did you know this?

Not at all

Perfectly

Select one:
A. 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.
B. Organizations with key performance indicators (KPIs) established for critical success factors (CSFs) will typically achieve organizational goals.
C. A key performance indicator (KPI) answers the question, “What will make our organization a success?”
D. Generally, an organization’s risk tolerance has little impact on its critical success factors (CSFs) and key performance indicators (KPIs).

A. 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.

How well did you know this?

Not at all

Perfectly

North American Furnishings is using business process management to help it identify risks that threaten its processes. Which one of the following risks would be considered an internal risk?

Select one:
A. The rise in the cost of materials due to new forestry regulations
B. The loss of available materials due to tornadoes
C. The drop in demand due to rising interest rates
D. The loss of skilled craftspeople due to retirement

D. The loss of skilled craftspeople due to retirement

How well did you know this?

Not at all

Perfectly

Select one:
A. Organizations with key performance indicators (KPIs) established for critical success factors (CSFs) will typically achieve organizational goals.
B. 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.
C. A key performance indicator (KPI) answers the question, “What will make our organization a success?”
D. Generally, an organization’s risk tolerance has little impact on its critical success factors (CSFs) and key performance indicators (KPIs).

B. 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.

How well did you know this?

Not at all

Perfectly

For an organization, a key performance indicator (KPI) measures the performance of a specific activity at a predetermined level or amount. Which one of the following is an example of a KPI based on a ratio?

Select one:
A. Inventory turnover
B. High employee morale
C. Customer-focused website
D. Safe transport of customer goods

A. Inventory turnover

How well did you know this?

Not at all

Perfectly

Key risk indicators (KRIs) help organizations identify issues that can lead to losses. Effective KRIs are based on a company’s

Select one:
A. Sales volume.
B. Organizational structure.
C. Strategic objectives.
D. Product or industry.

C. Strategic objectives.

How well did you know this?

Not at all

Perfectly

Which one of the following is an example of an external key risk indicator (KRI) that a manufacturer might monitor?

Select one:
A. Number of employee injuries
B. Amount of budget variances
C. Cost of raw materials
D. Age of accounts payable

C. Cost of raw materials

How well did you know this?

Not at all

Perfectly

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

Select one:
A. A critical success factor (CSF).
B. An objective gauge (OG).
C. A key performance indicator (KPI).
D. An operating standard (OS).

C. A key performance indicator (KPI).

How well did you know this?

Not at all

Perfectly

Carbon Manufacturing Company just hired a new chief risk officer (CRO) and one of his first tasks was to recommend updated key risk indicators (KRIs) to the chief executive officer (CEO). The CEO was especially interested in KRIs measuring the company’s profitability. One area of measurement that the new CRO might want to use is

Select one:
A. Personnel changes.
B. Customer orders.
C. Aged accounts receivable.
D. Customer invoices.

C. Aged accounts receivable.

How well did you know this?

Not at all

Perfectly

Which one of the following answers the question, “What shows we are a success?”

Select one:
A. Critical success factor
B. Strategic objective
C. Risk tolerance level
D. Key performance indicator

D. Key performance indicator

How well did you know this?

Not at all

Perfectly

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?

Select one:
A. Senior management level
B. Business-unit level
C. Board of director level
D. Department level

D. Department level

How well did you know this?

Not at all

Perfectly

North American Furnishings is using business process management to help it identify risks that threaten its processes. Which one of the following risks would be considered an internal risk?

Select one:
A. The drop in demand due to rising interest rates
B. The loss of available materials due to tornadoes
C. The loss of skilled craftspeople due to retirement
D. The rise in the cost of materials due to new forestry regulations

C. The loss of skilled craftspeople due to retirement

How well did you know this?

Not at all

Perfectly

Which one of the following terms refers to information used as a basis for measuring the significance of a risk?

Select one:
A. Risk criteria
B. Risk tolerance
C. Risk appetite
D. Risk threshold

A. Risk criteria

How well did you know this?

Not at all

Perfectly

Which one of the following answers the question, “What shows we are a success?”

Select one:
A. Critical success factor
B. Risk tolerance level
C. Key performance indicator
D. Strategic objective

C. Key performance indicator

How well did you know this?

Not at all

Perfectly

Organizations use key risk indicators (KRIs) to plan for and respond to Select one: A. Emergencies. B. Failure. C. Questions. D. Risk.

D. Risk.

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? Select one: A. 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. B. 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. C. KRIs are effective internal indicators of changes such as budget variances; however they are not effective external indicators. D. An organization’s risk criteria, predefined tolerance ranges that measure variances from expected outcomes, are based on risk thresholds.

B. 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.

Which one of the following measures the progress an organization has made toward attaining its goals within a specific amount of time? Select one: A. Critical success factor B. Key risk indicator C. Key performance indicator D. Risk tolerance level

C. Key performance indicator

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? Select one: A. Generally, an organization’s risk tolerance has little impact on its critical success factors (CSFs) and key performance indicators (KPIs). B. 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. C. A key performance indicator (KPI) answers the question, "What will make our organization a success?" D. Organizations with key performance indicators (KPIs) established for critical success factors (CSFs) will typically achieve organizational goals.

B. 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.

C. Key performance indicator

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? Select one: 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. An organization’s risk criteria, predefined tolerance ranges that measure variances from expected outcomes, are based on risk thresholds. C. KRIs are effective internal indicators of changes such as budget variances; however they are not effective external indicators. 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.

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.

Which one of the following is a main characteristic of effective key risk indicators (KRIs)? Select one: A. They are based on quantifiable information. B. They measure progress toward achieving objectives. C. They are lagging in nature. D. They define the boundaries of risk tolerance.

A. They are based on quantifiable information.

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? Select one: A. Chief risk officer (CRO) B. Internal auditor C. Risk manager D. Risk champion

D. Risk champion

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? Select one: 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

C. To approve the organization’s risk management strategies, including their design and implementation.

All of the following are true regarding the composition of boards of directors, EXCEPT: Select one: 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.

A. Corporate boards are uniform in size with 13 directors committee.

Organizations are increasingly creating chief risk officer (CRO) positions. Which one of the following statements is correct with respect to CROs? Select one: A. A 2012 survey indicated that, in companies with annual revenue greater than $20 billion, fewer than 20% had created a CRO position. B. The CRO’s rank and importance to the board of directors are equal to those of the organization’s other executive officers. C. CROs’ roles are relatively standardized from industry to industry; they focus primarily on measuring and controlling risk. D. Typically, a CRO analyzes, measures, and monitors risk; compiles reports; and facilitates risk workshops without the need for staff.

B. The CRO’s rank and importance to the board of directors are equal to those of the organization’s other executive officers.

Which of the following statements best describes the risk governance role and responsibility of a corporate board of directors? Select one: A. To convert strategy into operational objectives and to identify and assess the impact of risks on the achievement of the objectives. B. To establish risk management policies, to define risk management roles and responsibilities, and to set risk management implementation goals. C. To assign risk management procedures for day-to-day functions and internal controls. D. To set the organization's risk appetite and to stay informed of the most significant risks to the organization and management's responses.

D. To set the organization's risk appetite and to stay informed of the most significant risks to the organization and management's responses.

An evolving tenet of corporate governance is that control and oversight be separated at the board level. In a board context, this separation is often achieved by requiring that most directors be Select one: A. Executives. B. Inside directors. C. Outside directors. D. Unpaid directors.

C. Outside directors.

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 Select one: A. Maximum possible loss. B. Retention level. C. Probable maximum loss. D. Risk appetite.

D. Risk appetite.

Humongous Corporation has announced that it seeks strategic growth through acquisition. It is carefully eyeing a smaller company, Tiny Corporation. Tiny Corporation is aware of such scrutiny and interest. Within Tiny Corporation, a market force that can help align interests of its corporate decision makers and shareholders is which one of the following? Select one: A. Regulatory action B. Takeover threats C. Merger opportunities D. Quarterly earnings announcements

B. Takeover threats

Corporations do not always internalize the costs of their decisions. Some costs are not borne by the corporation but are a result of their decisions. One example of this is Select one: A. Corporate philanthropy. B. Pollution costs. C. Payments to offshore subsidiaries. D. Corporate compliance costs.

B. Pollution costs.

Corporate governance is evolving towards the separation of oversight and control for boards of directors. This separation may be accomplished by Select one: A. Requiring the audit committee to be comprised of inside directors. B. Requiring the majority of the directors to be outside directors. C. Using company-appointed board members rather than shareholder-elected board members. D. Requiring a company executive to chair each board committee.

B. Requiring the majority of the directors to be outside directors.

While most shareholders are passive, which one of the following parties has more operational involvement in a corporation's day to day activities? Select one: A. Regulators B. Proxies C. Managers D. Directors

C. Managers

Karen Williams, a retired chief financial officer of a bank, was invited to join the board of directors of ABC Property and Liability Insurance Company. She was asked to serve on the Audit Committee and the Risk Committee of the ABC board. Which of the following statements is true regarding Karen's service on the ABC board of directors? Select one: A. As a board member, Karen is expected to be a disinterested party, only questioning the management team when new corporate initiatives fail. B. The work of Karen's Risk Committee is limited to a review of the insurance company's underwriting results and the company's investment portfolio. C. Karen's Audit Committee takes precedence over the board of directors with regard to oversight responsibility. D. The entire board retains oversight responsibility over risks that are assigned to Karen's Audit Committee.

C. Karen's Audit Committee takes precedence over the board of directors with regard to oversight responsibility.

A corporate board of director's chair person is elected by Select one: A. The board of directors. B. The shareholders. C. Executive management. D. Proxies.

A. The board of directors.

Which one of the following statements is correct with respect to the role of a board of directors in risk oversight? Select one: 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. Financial services organizations are far less subject to regulatory pressure for increased transparency and risk oversight than are corporations in nonfinancial business sectors. 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. A 2012 survey of executives revealed that practically all boards have formally assigned risk oversight responsibility to a board committee.

A. Increasing pressure on boards of directors to provide greater enterprise-wide risk oversight comes from sources such as investors, rating agencies, and regulators.

The managers and executives at Oakes Corporation feel pressure to improve quarterly financial results because they have become the laughingstock of their competitive niche. They wish to change this and restore the excellent light in which competitors once viewed them. Such concerns on the part of Oakes' leadership reflect concern for Select one: A. Management reputation. B. Takeover threats. C. Shareholder reputation. D. Legal liability.

A. Management reputation.

Rufus owns 1500 shares in the ARM Corporation. Recently, ARM has shouldered significant liabilities due to pollution problems. Generally, Rufus’ liability as a shareholder would be limited to which one of the following? Select one: A. The amount of insurance coverage they have B. The amount of assets they have C. Treble damages D. The value of their shares

D. the value of their shares.

Though various parties incur costs in monitoring corporate decision-makers, most monitoring costs are shouldered by which one of the following? Select one: A. Insurers B. Shareholders C. Managers D. Directors

B. Shareholders

Which one of the following statements regarding corporate governance and risk oversight is true? Select one: A. Corporate governance and risk oversight have no impact on the value of the organization. B. Nonfinancial organizations are subject to greater regulatory pressure for transparency and astute risk management than financial organizations. C. Some board of directors delegate risk oversight tasks to board committees, such as the audit committee, risk committee, and compensation committee. D. Board oversight should be limited to past history and current conditions, and should avoid consideration of uncertain future events.

C. Some board of directors delegate risk oversight tasks to board committees, such as the audit committee, risk committee, and compensation committee.

Which one of the following statements regarding the structure and role of a board of directors is true? Select one: A. Members of the board elect a director to be chairman of the board. B. The board of directors must be comprised of ten directors, with an equal number of inside and outside directors. C. Members of the board are appointed by the president of the company. D. The board is responsible for the day-to-day decisions at a corporation.

A. Members of the board elect a director to be chairman of the board.

Which one of the following statements is true regarding the roles of a risk champion and a chief risk officer? Select one: A. A chief risk officer reports to a risk champion, who in turn interacts with the company executives and the board of directors. B. A chief risk officer usually has less influence on corporate decision making than a risk champion. C. A chief risk officer is more likely to have a dedicated staff to assist with the responsibilities of his or her job. D. A risk champion is a member of the board of directors who has been selected to concentrate his or her efforts on assessing the risks faced by an organization.

C. A chief risk officer is more likely to have a dedicated staff to assist with the responsibilities of his or her job.

Corporate governance is defined as Select one: A. A diagram of reporting relationships and levels of authority within an organization. B. The reporting chain of command within an organization. C. A body of law that specifies how corporations are legally formed and chartered. D. The mechanisms and procedures that determine how corporations are run.

D. The mechanisms and procedures that determine how corporations are run.

Which one of the following categories of agency costs is assumed by managers? Select one: A. Advertising costs B. Bonding costs C. Incentive alignment costs D. Monitoring costs

B. Bonding costs

C. Some board of directors delegate risk oversight tasks to board committees, such as the audit committee, risk committee, and compensation committee.

One corporate governance issue is accountability of directors. One method to increase accountability of directors is to Select one: 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.

C. Conduct regular meetings of outside directors without management being present.

Which of the following statements best describes the risk governance role and responsibility of a corporate board of directors? Select one: A. To establish risk management policies, to define risk management roles and responsibilities, and to set risk management implementation goals. B. To set the organization's risk appetite and to stay informed of the most significant risks to the organization and management's responses. C. To assign risk management procedures for day-to-day functions and internal controls. D. To convert strategy into operational objectives and to identify and assess the impact of risks on the achievement of the objectives.

B. To set the organization's risk appetite and to stay informed of the most significant risks to the organization and management's responses.

While corporate governance is concerned with separating ownership and control, it is also concerned with separating control from Select one: A. Management. B. Shareholding. C. Compliance. D. Oversight.

D. Oversight.

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? Select one: A. Risk champion B. Internal auditor C. Chief risk officer (CRO) D. Risk manager

A. Risk champion

Which one of the following statements regarding the structure and role of a board of directors is true? Select one: A. Members of the board are appointed by the president of the company. B. The board is responsible for the day-to-day decisions at a corporation. C. The board of directors must be comprised of ten directors, with an equal number of inside and outside directors. D. Members of the board elect a director to be chairman of the board.

D. Members of the board elect a director to be chairman of the board.

One of the categories of agency costs associated with managing the relationship between management and shareholders is Select one: A. Implementation costs. B. Monitoring costs. C. Acquisition costs. D. Commission costs.

B. Monitoring costs.

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? Select one: A. To monitor the organization’s compliance with established risk limits and how noncompliance is addressed B. To approve the organization’s risk management strategies, including their design and implementation. C. To oversee exposures of the organization’s critical risks and advise the board on risk strategy. D. To assist the board in establishing the organization’s risk appetite and risk tolerance levels.

D. To assist the board in establishing the organization’s risk appetite and risk tolerance levels.

Corporate governance is evolving towards the separation of oversight and control for boards of directors. This separation may be accomplished by Select one: A. Using company-appointed board members rather than shareholder-elected board members. B. Requiring the audit committee to be comprised of inside directors. C. Requiring a company executive to chair each board committee. D. Requiring the majority of the directors to be outside directors.

D. Requiring the majority of the directors to be outside directors.

As a market force to help align manager and shareholder interests, takeover threats are Select one: A. Less likely now than in the past because of statutory changes. B. Easily and quickly implemented and are highly effective. C. Only effective when the employment market for managers is increasing. D. Only effective for directors and officers and have no effect on managers.

A. Less likely now than in the past because of statutory changes.

Mechanisms that can be used to align a corporation’s managerial and shareholders’ interests include all of the following, EXCEPT: Select one: A. Incentive compensation B. Management reputation C. Takeover threat D. Risk-averse behavior

D. Risk-averse behavior

As a category of agency costs, bonding costs include Select one: A. Cash compensation. B. Stock options and restricted stock. C. Fees paid to outside auditors. D. Fees paid to outside directors.

B. Stock options and restricted stock.

A data governance committee (DGC) Select one: A. Cleanses big data. B. Is cross-functional. C. Is comprised of IT architects. D. Reports to risk management.

B. Is cross-functional.

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 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? Select one: A. Comprehensiveness B. Appropriateness C. Reasonableness D. Validity

A. Comprehensiveness

Cyber extortion is another name for Select one: A. Social engineering. B. Ransomware. C. Bitcoin D. Phishing.

B. Ransomware, a type of malware, is used to shut down a business' systems, holding data hostage until a ransom is paid.

Sound risk management decisions are predicated on Select one: A. Regulations and compliance. B. Effective decision-making. C. Quality data. D. Operational efficiencies.

C. Quality data, is critical to making sound risk management decisions. For example, up-to-date financial data may influence whether an organization decides to expand its product offerings.

Which one of the following data governance tools allows the data governance committee to look at data relationships and interdependencies across the organization? Select one: A. External compliance guidelines B. Internal coding procedures C. Enterprise data models D. Project management programs

C. Enterprise data models

Internal data entry processes that capture accounting transactions, customer data or other operational transactions are called Select one: A. Data capture. B. Data governance. C. Data integration. D. Data quality.

A. Data capture, including data preparation, are a business' day to day transactions.

In terms of data governance, IT employees hold the role of Select one: A. Data stewards. B. Compliance regulators. C. Rule developers. D. Data custodians.

D. Data custodians.

Which one of the following is a basic process in any data security program? Select one: A. Develop and enforce stronger password protocols. B. Perform random sampling of data for accuracy. C. Establish metrics for timeliness of data refresh in systems. D. Establish a data governance committee (DGC).

A. Develop and enforce stronger password protocols is a critical first step in protecting a business' data from unwanted intrusions.

Ensuring quality data requires a Select one: A. Systematic and purpose-driven review process. B. Business Analyst. C. Data governance committee D. More efficient deployment of resources.

A. Systematic and purpose-driven review process.

A privacy impact assessment (PIA) is Select one: A. An example of metadata that defines key data attributes. B. A tool used to identify and assess privacy risks. C. A collaborative tool that facilitates workflows. D. Proprietary software used to detect malware.

B. A tool used to identify and assess privacy risks as well as identify whether information collected complies with legal and regulatory privacy requirements.

There are two types of associated risk for data privacy, individual and general risk. General data privacy risk Select one: A. Involves legal and regulatory requirements. B. Can be categorized operational or reputational. C. Varies by the type of business or industry. D. Is of specific concern to the European Union.

B. Can be categorized operational or reputational.

The data quality principle of reasonability refers to Select one: A. The comprehensive nature of data. B. The systematic process of tracing data. C. The materiality or relevance of data. D. The appropriateness of current data.

C. The materiality or relevance of data, testing whether the information provided is pertinent to the business objective at hand.

Which one of the following defines individual risk? Select one: A. Individual risk may be categorized as operational. B. Individual risk is defined by the data governance committee. C. Individual risk is reputational in nature. D. Individual risk varies according to the type of business.

D. Individual risk varies according to the type of business.

Which one of the following is an element of a data security program? Select one: A. Installing agile project management. B. Storing data back-ups off site. C. Implementing a data governance program. D. Increasing the overall efficiency of data systems.

B. Storing data back-ups off site.

Encrypting data to block its use if stolen is an example of a Select one: A. Hardware-based security solution. B. Incident response plan. C. Software-based security solution. D. Cyber-threat inventory approach.

C. Software-based security solution.

Data governance provides Select one: A. A dynamic view of data without needing to move it between systems. B. The internal data entry processes needed to capture accounting transactions. C. Definitions, standards and procedures for how data is used. D. A road map that details where data is located.

C. Definitions, standards and procedures for how data is used. Data governance is the starting point, or rule set for managing data.

Metadata contains Select one: A. Information about data as well as rules about that data. B. Accounting ledger entries as well as big data. C. Both material limitations and sampling methodology. D. A combination of structured and unstructured data.

A. Information about data as well as rules about that data. Metadata contains information about the data itself. It may include documentation about the database, or business rules for the data's use.

Which one of the following is a data governance committee (DGC) responsibility? Select one: A. A data governance committee both retrieves and prepares metadata for use by an organization. B. A data governance committee plays a key role in project management for data projects. C. A data governance committee ensures there are few conflicts or redundancies in data standards and practices. D. A data governance committee is charged with monitoring the volume of big data within an organization.

C. A data governance committee ensures there are few conflicts or redundancies in data standards and practices.

To gain a competitive advantage, maintain profitability, and satisfy customers an organization must Select one: A. Adopt current accounting rules. B. Pay attention to the marketplace. C. Have an effective risk management program. D. Be able to trust its data.

D. Be able to trust its data.

Which one of the following is an example of a data governance tool? Select one: A. External Policy B. Metadata C. Risk Management D. Data integration

A. External Policy. Data governance is more than just physical tools or software applications. A data governance committee also uses internal policies, external policies, enterprise data models and collaborative tools such as agile project management to achieve its aims.

Malware is defined as Select one: A. Software technology used to encrypt data. B. A tool for managing data security. C. Software designed to cause damage. D. A hardware-based security breach.

C. Software designed to cause damage.

Which one of the following defines the duties of a data steward? Select one: A. A data steward provides technological support. B. A data steward measures data compliance. C. A data steward is a project manager. D. A data steward is an experienced business analyst.

D. A data steward is an experienced business analyst who views data as an organization's asset. This person represents the business aspects of data governance while IT supplies the technological expertise.

In terms of data quality principles, validity is defined as Select one: A. The true value of data relative to the business information being analyzed. B. The extent that each dataset contains all elements necessary for business needs. C. The accuracy of data within predefined and accepted parameters or values. D. The process of tracing data from its source to its destination.

C. The accuracy of data within predefined and accepted parameters or values. Accuracy measures true value of data relative to the business information being analyzed.

The data quality principle of reasonability refers to Select one: A. The systematic process of tracing data. B. The materiality or relevance of data. C. The comprehensive nature of data. D. The appropriateness of current data.

B. The materiality or relevance of data.

Which one of the following provides the frame of reference needed so data can be used appropriately for analysis and decision-making? Select one: A. Metadata B. Data custodian C. Data virtualization D. Data lineage

A. Metadata provides the frame of reference needed so data can be used appropriately for analysis and decision-making.