Due Care and Due Diligence

Question 1

What’s Due Diligence?

Answer 1

practicing the activities that maintain the due care effort

Question 2

DWhat’s Due Care?

Answer 2

• doing what a reasonable person would do in a given situation
• sometimes called the “prudent man” rule
• individual should react in a situation using the same level of care that would be expected from any reasonable person

Question 3

What does Due Care and Due Diligence mean for the management?

Answer 3

reduce senior management culpability and (downstream) liability when a loss occurs

Question 4

What activities are encompassed in Due Diligence?

Answer 4

• research
• planning
• evaluation

Question 5

Due Diligence largly apply to before or after a decision is made?

Answer 5

before - think before you act

Question 6

What activities are encompassed in Due Care?

Answer 6

• implementation
• operation (upkeep)
• reasonable measures

Question 7

Due Care largly apply to before or after a decision is made?

Answer 7

after - actions speak louder than words

Question 8

What’s the efect of Due Diligence?

Answer 8

increases understanding and reduces risk

Question 9

Security audits and effectivness reviews are key elements of displaying due care or due diligence?

Answer 9

due care

Question 10

What principle states that an individual should make every effort to complete his or her responsibilities in an accurate and timely manner?

Answer 10

due diligence