Mgmt. Strand 4. Business Governance (A)

What is the primary goal of enterprise risk management (ERM) in a business?

• To increase government oversight of business operations

• To eliminate all potential business risks

• To protect and create value for stakeholders

• To reduce employee turnover

Which of the following best describes how ERM adds value to an organization?

• By focusing only on compliance with laws and regulations

• By identifying, assessing, and responding to risks that impact business objectives

• By eliminating financial statements

• By outsourcing all non-essential business functions

A risk that arises when a company launches a new product line without enough market research is an example of what type of risk?

• Strategic risk

• Financial risk

• Compliance risk

• Operational risk

Which of the following is an example of an operational risk?

• A lawsuit from breaking a contract

• A factory machine breaking down and stopping production

• Negative customer reviews on social media

• Loss of funding from investors

Buying insurance for company vehicles is an example of which risk management strategy?

• Risk transfer

• Risk retention

• Risk avoidance

• Risk sharing

Which of the following is an example of risk prevention?

• Ignoring minor safety concerns

• Installing security cameras to deter theft

• Filing an insurance claim

• Hiring a legal consultant after a violation occurs

Why might a company change its organizational structure in response to compliance requirements?

• To ensure accountability and oversight in regulated areas

• To avoid paying taxes

• To reduce innovation

• To eliminate competition

Which of the following is a core element of a compliance program?

• Competitive pricing analysis

• Written policies and procedures

• Brand loyalty surveys

• Employee bonuses

Which industry is most likely to have strict patient privacy compliance requirements (e.g., HIPAA)?

• Food and beverage

• Healthcare

• Consumer electronics

• Retail clothing

Which of the following would be an example of promoting consistent behaviors in a compliance program?

• Offering random rewards

• Allowing each employee to create their own process

• Requiring all staff to complete compliance training annually

• Outsourcing all compliance responsibilities