Certified Government Financial Manager (CGFM) Practice Exam 2025 – Your All-in-One Guide to Exam Success!

Self-assessment refers to the evaluation conducted by management using their own existing knowledge, resources, and perspectives about their operations and risks. This process allows management to identify potential risks and weaknesses within their own organization by drawing on their familiarity with internal processes, policies, and procedures.

Engaging in self-assessment empowers management to recognize areas needing improvement and to take proactive steps to mitigate risks before they escalate into larger issues. This method encourages a culture of accountability and continuous improvement, making it an essential part of effective risk management.

The other options do not accurately capture the essence of self-assessment. Evaluation by external auditors involves independent scrutiny and is usually aimed at providing an objective view, while assessments by the general public do not contribute to a structured understanding of internal risks. Overseeing agency performance only refers to a regulatory or oversight role rather than an internal evaluation process.