LOMA 291 Module 4 Exam Questions and Answers With Verified Solutions 2025
At a typical insurance company, which of the following areas are part of financial operations? Choose all
that apply.
a. Accounting and financial reporting
b. Treasury operations
c. Information technology
d. Investment operations
e. Internal audit - ✔✔A, B, D, & E- All of these areas—except for information technology—are part of a
typical insurance company's financial operations. Although the IT department plays an essential role in
maintaining the quality of the data provided to financial managers, it is not technically part of financial
operations.
Board and Executive Roles
The financial management function - ✔✔Provides information to stakeholders
Ensures that financial obligations are met
Ensures compliance with complex financial regulations
Generates adequate returns for the company's owners and customers
Role of the Board of Directors - ✔✔- Investment committee: The investment committee sets Forthright's
investment policy and oversees investment operations.
- Audit/risk committee: The audit/risk committee directs Forthright's audit and internal control function.
The role of the Ceo - ✔✔I approve our budget numbers. Then I manage our resources—in line with
budget guidelines and all current laws and regulations.
Technically I'm responsible for directing financial objectives and strategies, but I delegate most of these
responsibilities to senior financial officers.
However, make no mistake, the buck stops here! We are a publicly held company. Investors, customers,
and regulators can, and should, hold me responsible for our financial results.
,The role of the CFO - ✔✔As CFO, I report to Grace Avon, our CEO. I work closely with company directors
to develop corporate goals and strategies. I coordinate, monitor, and direct Forthright's financial
activities.
That covers a lot of territory. In the financial world, information quality and accuracy are critically
important—I work closely with IT to make sure we get that right. That information has to be
communicated to company managers and external parties. When we need to raise funds—that's also
my job.
Last, but not least, strong financial controls and measurement tools are absolutely essential.
Financial Management Operating Units - ✔✔Specific job titles and organizational structures vary
according to a company's unique needs, but all insurers must perform certain core financial functions, as
shown below.
An organization chart. Under Financial Operations are Accounting and Financial Reporting, Treasury
Operations, and Investment Operations. Separate is Internal Audit.
An insurance company's investment committee directs the company's internal audit and control
function.
a. True
b. False - ✔✔A company's internal audit and control function is directed by the audit/risk committee.
The investment committee sets the company's investment policy and oversees investment operations.
Let's look at how Forthright Financial organizes its financial operations, starting with its accounting and
financial reporting function.
accounting - ✔✔A system or set of rules and methods for collecting, recording, analyzing, summarizing,
and reporting financial information.
financial reporting - ✔✔The process of presenting financial data about a company's financial position,
operating performance, and flow of funds.
, The controller - ✔✔responsible for the timely and accurate collection and reporting of all of Forthright's
financial data
The accounting function:
Records, tracks, and reports on financial transactions
Coordinates the budget process and oversees expense analysis
Prepares financial statements and reports for external users
Gathers, records, analyzes, and distributes financial information to company managers
Of the following stakeholders, select the ones Forthright would consider to be internal users of its
accounting information. Choose all that apply.
a. Regulators
b. Rating agencies
c. Board of directors
d. Policyowners
e. Managers
f. Investors
g. Taxing authorities - ✔✔C & E - Internal users work inside the company and make decisions about the
company's operations. External users are outside the company and use the company's financial
information primarily to make investment, regulatory, and other decisions about the company.
user information needs (managers) - ✔✔Managers within the organization may use accounting
information to
Assess their departments' day-to-day operations
Judge whether they are meeting their financial goals
Plan for future needs
external policy owner - ✔✔As a policyowner, I want to know that Forthright will have enough money to
pay its bills. I want to be sure that it is financially stable. Will Forthright be able to pay my claim 25 years
from now?
At a typical insurance company, which of the following areas are part of financial operations? Choose all
that apply.
a. Accounting and financial reporting
b. Treasury operations
c. Information technology
d. Investment operations
e. Internal audit - ✔✔A, B, D, & E- All of these areas—except for information technology—are part of a
typical insurance company's financial operations. Although the IT department plays an essential role in
maintaining the quality of the data provided to financial managers, it is not technically part of financial
operations.
Board and Executive Roles
The financial management function - ✔✔Provides information to stakeholders
Ensures that financial obligations are met
Ensures compliance with complex financial regulations
Generates adequate returns for the company's owners and customers
Role of the Board of Directors - ✔✔- Investment committee: The investment committee sets Forthright's
investment policy and oversees investment operations.
- Audit/risk committee: The audit/risk committee directs Forthright's audit and internal control function.
The role of the Ceo - ✔✔I approve our budget numbers. Then I manage our resources—in line with
budget guidelines and all current laws and regulations.
Technically I'm responsible for directing financial objectives and strategies, but I delegate most of these
responsibilities to senior financial officers.
However, make no mistake, the buck stops here! We are a publicly held company. Investors, customers,
and regulators can, and should, hold me responsible for our financial results.
,The role of the CFO - ✔✔As CFO, I report to Grace Avon, our CEO. I work closely with company directors
to develop corporate goals and strategies. I coordinate, monitor, and direct Forthright's financial
activities.
That covers a lot of territory. In the financial world, information quality and accuracy are critically
important—I work closely with IT to make sure we get that right. That information has to be
communicated to company managers and external parties. When we need to raise funds—that's also
my job.
Last, but not least, strong financial controls and measurement tools are absolutely essential.
Financial Management Operating Units - ✔✔Specific job titles and organizational structures vary
according to a company's unique needs, but all insurers must perform certain core financial functions, as
shown below.
An organization chart. Under Financial Operations are Accounting and Financial Reporting, Treasury
Operations, and Investment Operations. Separate is Internal Audit.
An insurance company's investment committee directs the company's internal audit and control
function.
a. True
b. False - ✔✔A company's internal audit and control function is directed by the audit/risk committee.
The investment committee sets the company's investment policy and oversees investment operations.
Let's look at how Forthright Financial organizes its financial operations, starting with its accounting and
financial reporting function.
accounting - ✔✔A system or set of rules and methods for collecting, recording, analyzing, summarizing,
and reporting financial information.
financial reporting - ✔✔The process of presenting financial data about a company's financial position,
operating performance, and flow of funds.
, The controller - ✔✔responsible for the timely and accurate collection and reporting of all of Forthright's
financial data
The accounting function:
Records, tracks, and reports on financial transactions
Coordinates the budget process and oversees expense analysis
Prepares financial statements and reports for external users
Gathers, records, analyzes, and distributes financial information to company managers
Of the following stakeholders, select the ones Forthright would consider to be internal users of its
accounting information. Choose all that apply.
a. Regulators
b. Rating agencies
c. Board of directors
d. Policyowners
e. Managers
f. Investors
g. Taxing authorities - ✔✔C & E - Internal users work inside the company and make decisions about the
company's operations. External users are outside the company and use the company's financial
information primarily to make investment, regulatory, and other decisions about the company.
user information needs (managers) - ✔✔Managers within the organization may use accounting
information to
Assess their departments' day-to-day operations
Judge whether they are meeting their financial goals
Plan for future needs
external policy owner - ✔✔As a policyowner, I want to know that Forthright will have enough money to
pay its bills. I want to be sure that it is financially stable. Will Forthright be able to pay my claim 25 years
from now?
