ARM 400 TRAINING STUDY SHEET 2026
UPDATED QUESTIONS AND ANSWERS
◉Entity-level controls. Answer: The second level of a top-down
review of internal controls that helps ensure that management
directives relative to the entire entity are in place and are being
carried out.
◉Compliance. Answer: An organization's adherence to external legal
and regulatory requirements as well as to internal policies and
standards.
◉Chief compliance officer (CCO). Answer: The individual tasked
with ensuring the organization's compliance with external
requirements such as laws and regulations as well as compliance
with internal policies and procedures.
◉Principles-based regulation. Answer: A regulatory approach that
specifies desired outcomes and allows the regulated entity broad
discretion in achieving that outcome.
◉Rules-based regulation. Answer: A regulatory approach that
establishes a detailed set of specific rules to govern conduct.
, ◉Regulatory arbitrage. Answer: The practice of circumventing
unfavorable regulations by exploiting gaps and inconsistencies in
competing regulatory systems.
◉Risk-based regulation. Answer: A risk management approach to
allocating resources to address risks in a way that will achieve the
greatest good.
◉Evidence-based regulation. Answer: A regulatory approach that
collects and uses objective performance data to set, evaluate, and
improve policies.
◉5 steps of business process management (BPM). Answer: 1.
Design/ redesign process
2. Model scenarios
3. Execute process change
4. Monitor results
5. Optimize process
◉insolvency. Answer: the inability to pay debts when they are due
◉Solvency II & Basel Standards. Answer: Notable regulations
adopted by governments worldwide to prevent insolvency by
UPDATED QUESTIONS AND ANSWERS
◉Entity-level controls. Answer: The second level of a top-down
review of internal controls that helps ensure that management
directives relative to the entire entity are in place and are being
carried out.
◉Compliance. Answer: An organization's adherence to external legal
and regulatory requirements as well as to internal policies and
standards.
◉Chief compliance officer (CCO). Answer: The individual tasked
with ensuring the organization's compliance with external
requirements such as laws and regulations as well as compliance
with internal policies and procedures.
◉Principles-based regulation. Answer: A regulatory approach that
specifies desired outcomes and allows the regulated entity broad
discretion in achieving that outcome.
◉Rules-based regulation. Answer: A regulatory approach that
establishes a detailed set of specific rules to govern conduct.
, ◉Regulatory arbitrage. Answer: The practice of circumventing
unfavorable regulations by exploiting gaps and inconsistencies in
competing regulatory systems.
◉Risk-based regulation. Answer: A risk management approach to
allocating resources to address risks in a way that will achieve the
greatest good.
◉Evidence-based regulation. Answer: A regulatory approach that
collects and uses objective performance data to set, evaluate, and
improve policies.
◉5 steps of business process management (BPM). Answer: 1.
Design/ redesign process
2. Model scenarios
3. Execute process change
4. Monitor results
5. Optimize process
◉insolvency. Answer: the inability to pay debts when they are due
◉Solvency II & Basel Standards. Answer: Notable regulations
adopted by governments worldwide to prevent insolvency by
