"I am good."
From what i gather "pono" is more referring to moral standards i.e. a good person with good morals
So then, in the absence of context, "Pono au" should be an acceptable translation of "I am good," right?
Well in the Duolingo world of "contextless" sentences, you could make a case for it. However, in the real world, context exists. Pono meaning good was a very loose translation. It really means proper, just, upright, etc. and not to be used to answer the question How are you?
No, my whole point is that there's not even enough context to know that this sentence is supposed to be an answer to the question "How are you?" To my ear, at least, answers to that question should start with "I'm" if they include the pronoun at all, but I'd be more likely to use "fine" anyway. All of which is to say that I do not recognize, without context, "I am good" as an answer to the question "How are you?" It sounds to me like a statement about my actual condition, possibly my moral condition.
So, if "Pono au" could mean "I am good" in the sense of not evil, but morally upright or just or righteous, then I think it should count as a correct translation of this sentence. But I'm still not sure that I understand what "pono" actually means, which is why I'm reluctant to insist on this and why I'm so desperate for some good Tips and Notes for this course.
Possible, but keep in mind that this course is designed for beginners, and prior knowledge of words that have not been taught yet like nō is not assumed.