Pass the AGA Government Financial Manager GFMC Questions and answers with CertsForce

Regression Analysis:

Regression analysis is a statistical technique used to examine the relationships between a dependent variable (e.g., lottery ticket sales) and one or more independent variables (e.g., advertising, potential payouts, size of lottery cards).

This method helps quantify the extent to which each variable impacts sales.

Explanation of Answer Choices:

A. Content analysis: Incorrect. This method is used to analyze qualitative data (e.g., text or media) rather than numerical relationships.

B. Cost-benefit analysis: Incorrect. This technique evaluates the costs and benefits of a decision but does not identify the relationships between variables.

C. Regression analysis: Correct. This technique determines the impact of multiple variables on a single outcome.

D. Narrative analysis: Incorrect. This is used to analyze stories or qualitative information, not numerical data.

 What Is COSO ERM?

TheCOSO Enterprise Risk Management (ERM) Frameworkis a widely accepted framework that helps organizations identify, assess, and manage risks while creating value. The five components of COSO ERM are:

Governance and Culture

Strategy and Objective-Setting

Performance

Review and Revision

Information, Communication, and Reporting

 Why Is Performance a Key Component?

ThePerformancecomponent focuses on identifying, assessing, and prioritizing risks to achieving an organization’s objectives. It includes implementing risk responses (e.g., avoiding, reducing, sharing, or accepting risks) and monitoring their effectiveness.

 Why Other Options Are Incorrect:

B. Changing Environment:This is not a COSO ERM component but a general factor influencing risk management.

C. Complex Calculations:This is not relevant to COSO ERM.

D. Accepting Risk:While accepting risk is part of risk responses, it is not one of the five COSO ERM components.

 References and Documents:

COSO ERM Framework (2017):Details the five components of ERM and their application in managing risks.

Responsibility for Internal Controls:

Managementholds the primary responsibility for establishing, implementing, and maintaining an organization’s internal control system.

This responsibility is outlined in frameworks such as COSO’sInternal Control - Integrated Frameworkand the GAO’sGreen Book.

Roles of Other Parties:

A. Accountants: While accountants may assist in designing or assessing controls, they are not primarily responsible.

B. Internal auditors: Their role is to evaluate the effectiveness of controls, not establish them.

D. Audit committee: Provides oversight but does not implement or design controls.