PFMP · Question #742
Even though you do not work in an industry that is heavily regulated by your government, such as in new product development, health, or safety, recently your government issued a mandate that senior…
The correct answer is B. Enterprise environmental factor. A government-issued financial reporting mandate that applies externally to all corporations is an enterprise environmental factor - an external condition that influences but is not controlled by the organization.
Question
Even though you do not work in an industry that is heavily regulated by your government, such as in new product development, health, or safety, recently your government issued a mandate that senior management of all corporations must certify the accuracy of reported financial statements to prevent any accounting fraud. These controls are to be implemented in the next fiscal year. This obviously is not in your portfolio strategic or management plans but is an example of a(n):
Options
- AMandated component
- BEnterprise environmental factor
- CStrategic change
- DEmergent program
How the community answered
(43 responses)- A5% (2)
- B70% (30)
- C7% (3)
- D19% (8)
Why each option
A government-issued financial reporting mandate that applies externally to all corporations is an enterprise environmental factor - an external condition that influences but is not controlled by the organization.
A mandated component is a specific portfolio component required for regulatory compliance, not the regulatory driver itself that compels the organization to act.
Enterprise environmental factors (EEFs) are conditions external to the portfolio that the organization cannot control but must respond to, including government regulations, legal requirements, and industry standards. A new law requiring executives to certify financial statements fits this definition precisely because it originates outside the organization and forces a response. EEFs differ from internally chosen strategic changes in that compliance is mandatory regardless of strategic preference.
A strategic change is an internally driven shift in organizational direction, whereas this mandate is externally imposed by the government.
An emergent program is a new internally initiated initiative that arises from changing conditions, not an external regulatory requirement.
Concept tested: Enterprise environmental factors in portfolio management
Source: https://www.pmi.org/pmbok-guide-standards/foundational/standard-for-portfolio-management
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