SASB FSA LEVEL 1 TEST QUESTIONS
AND ANSWERS
Accounting Metrics - Answer- Quantitative and/or discussion and analysis metrics
intended to measure performance on a sustainability disclosure topic.
Activity Metrics - Answer- Metrics used to quantify the scale of a business. They are
used in conjunction with accounting metrics to normalize data and facilitate comparison.
Actual Impacts - Answer- A form of financial impact that is actively observable and
measurable. They represent actual trends, events, or upcoming changes that are
occurring or will occur with a high degree of certainty.
Acute Impacts - Answer- Impacts on a company's financial condition or operating
performance that may be rare or unlikely but can have significant consequences, such
as extreme weather events or unanticipated accidents.
Alliance Organizations - Answer- A formal association formed for the mutual benefit of
member organizations in association with specific shared interests or goals. Member
organizations benefit from a communication network, shared resources, and
collaboration.
Alpha - Answer- The return of an investment in excess of a market index or benchmark
Assurance Readiness - Answer- Assessed through internal audits or other internal
disclosure procedures, assurance readiness seeks to determine the appropriate level of
external assurance and overall preparedness of a company to smooth the assurance
process and control related assurance expenses.
Assurance - Answer- A service performed by external, independent professional(s) to
declare the credibility of disclosed data, statements, and other information, typically
accompanied by an assurance report and/or assurance statement.
Audit Committee - Answer- A committee of the board of directors charged with
overseeing financial reporting and disclosure, including disclosure related to financially
material sustainability information
Audits - Answer- An official, independent examination go an organizations financial
and/or non-financial statement to ensure they fairly and accurately represent the
transactions/activities of the company.
Benchmarks - Answer- A standard or point of reference used to evaluate the
performance of a security, portfolio, fund, or investment manager. Stock and Bond
indexes are often used.
, Boilerplate - Answer- Nonspecific wording that does not describe the realities of a
company's particular operating context.
Certifications - Answer- For public companies, disclosure regulations overtone require
executive certification of internal controls where an executive, typically the CEO and/or
CFO, must certify the accuracy and completeness of disclosed information.
Coalitions - Answer- A formal group of companies and organizations formed, sometimes
temporarily, in pursuit of combined action toward a specific outcome. Members often
collaborate and collectively communicate goals and developments related to the
particular topic.
Company (or Security) Valuation - Answer- The process of determining the economic
value of an entire business. May consider factors such as future earnings,
management, capital structure, asset value, risks, and other factors
Company-Tailored Narrative - Answer- Specific language in a disclosure that can be
understood only in the context of the reporting company
Comparative Analysis - Answer- Often part of fundamental analysis, aims to compare
industry peers or security values to assess their intrinsic value, which may or may not
be accurately reflected by market capitalization or stock prices
Comply-or-Explain - Answer- Provisions that require disclosure of particular information,
but allow reporting entities to omit the information and provide an explanation for the
omission
Conceptual Framework - Answer- A document that defines the principles and
characteristics of the standard-setting process, ensuring all standards are developed
consistently, providing something to resolve questions that emerge throughout the
standard-setting process, and allowing users of the standards to understand the
process and have confidence in the quality of the standards
Corporate Governance Codes - Answer- Rules, either mandatory or voluntary, that
define standards and responsibilities for corporate boards to protect shareholder
investments, including standards for ethical behavior and responsible decision making.
Credit Risk - Answer- The risk of a borrower defaulting on its ability to make required
repayments (interest or principal) resulting in a loss to the lender
Data Aggregators - Answer- Organizations that compile raw data, often presenting it in
a format to support analysis.
Disclosure Platforms - Answer- A software-based interface that supports ESG report
preparation and disclosure by establishing workflows
AND ANSWERS
Accounting Metrics - Answer- Quantitative and/or discussion and analysis metrics
intended to measure performance on a sustainability disclosure topic.
Activity Metrics - Answer- Metrics used to quantify the scale of a business. They are
used in conjunction with accounting metrics to normalize data and facilitate comparison.
Actual Impacts - Answer- A form of financial impact that is actively observable and
measurable. They represent actual trends, events, or upcoming changes that are
occurring or will occur with a high degree of certainty.
Acute Impacts - Answer- Impacts on a company's financial condition or operating
performance that may be rare or unlikely but can have significant consequences, such
as extreme weather events or unanticipated accidents.
Alliance Organizations - Answer- A formal association formed for the mutual benefit of
member organizations in association with specific shared interests or goals. Member
organizations benefit from a communication network, shared resources, and
collaboration.
Alpha - Answer- The return of an investment in excess of a market index or benchmark
Assurance Readiness - Answer- Assessed through internal audits or other internal
disclosure procedures, assurance readiness seeks to determine the appropriate level of
external assurance and overall preparedness of a company to smooth the assurance
process and control related assurance expenses.
Assurance - Answer- A service performed by external, independent professional(s) to
declare the credibility of disclosed data, statements, and other information, typically
accompanied by an assurance report and/or assurance statement.
Audit Committee - Answer- A committee of the board of directors charged with
overseeing financial reporting and disclosure, including disclosure related to financially
material sustainability information
Audits - Answer- An official, independent examination go an organizations financial
and/or non-financial statement to ensure they fairly and accurately represent the
transactions/activities of the company.
Benchmarks - Answer- A standard or point of reference used to evaluate the
performance of a security, portfolio, fund, or investment manager. Stock and Bond
indexes are often used.
, Boilerplate - Answer- Nonspecific wording that does not describe the realities of a
company's particular operating context.
Certifications - Answer- For public companies, disclosure regulations overtone require
executive certification of internal controls where an executive, typically the CEO and/or
CFO, must certify the accuracy and completeness of disclosed information.
Coalitions - Answer- A formal group of companies and organizations formed, sometimes
temporarily, in pursuit of combined action toward a specific outcome. Members often
collaborate and collectively communicate goals and developments related to the
particular topic.
Company (or Security) Valuation - Answer- The process of determining the economic
value of an entire business. May consider factors such as future earnings,
management, capital structure, asset value, risks, and other factors
Company-Tailored Narrative - Answer- Specific language in a disclosure that can be
understood only in the context of the reporting company
Comparative Analysis - Answer- Often part of fundamental analysis, aims to compare
industry peers or security values to assess their intrinsic value, which may or may not
be accurately reflected by market capitalization or stock prices
Comply-or-Explain - Answer- Provisions that require disclosure of particular information,
but allow reporting entities to omit the information and provide an explanation for the
omission
Conceptual Framework - Answer- A document that defines the principles and
characteristics of the standard-setting process, ensuring all standards are developed
consistently, providing something to resolve questions that emerge throughout the
standard-setting process, and allowing users of the standards to understand the
process and have confidence in the quality of the standards
Corporate Governance Codes - Answer- Rules, either mandatory or voluntary, that
define standards and responsibilities for corporate boards to protect shareholder
investments, including standards for ethical behavior and responsible decision making.
Credit Risk - Answer- The risk of a borrower defaulting on its ability to make required
repayments (interest or principal) resulting in a loss to the lender
Data Aggregators - Answer- Organizations that compile raw data, often presenting it in
a format to support analysis.
Disclosure Platforms - Answer- A software-based interface that supports ESG report
preparation and disclosure by establishing workflows
