Complianceonline Risk Management Quiz
This short quiz tests your knowledge on the risk management process.
- 1.
New definition of risk under ISO 31000 and 31010 is:
- A.
Danger that injury, damage, or loss will occur
- B.
Possibility of investment loss
- C.
Probability of loss to an insurer
- D.
Probability of an event that will have an impact on objectives
Correct Answer
D. Probability of an event that will have an impact on objectivesExplanation
The new definition of risk under ISO 31000 and 31010 is "Probability of an event that will have an impact on objectives." This definition suggests that risk is not just about the possibility of injury, damage, or loss, or the possibility of investment loss, or the probability of loss to an insurer. Instead, it emphasizes that risk is about the likelihood of an event occurring that could affect the achievement of objectives. This definition broadens the understanding of risk to include any event that could potentially impact the desired outcomes or goals.Rate this question:
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- 2.
Causes of risk include all the following except:
- A.
Health, safety and environment
- B.
Finance
- C.
Insurance
- D.
Chemical breakdown
Correct Answer
D. Chemical breakdownExplanation
The given question asks for an exception among the listed causes of risk. The options include health, safety and environment, finance, insurance, and chemical breakdown. The correct answer is "Chemical breakdown" because it does not typically fall under the category of causes of risk. Health, safety and environment, finance, and insurance are commonly recognized as factors that can contribute to risk in various contexts, but chemical breakdown is not typically considered a cause of risk in the same way.Rate this question:
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- 3.
Risk management as defined by OCEG GRC model is:
- A.
Capability to set and evaluate performance against objectives
- B.
Capability to proactively identify, assess and address uncertainty and potential obstacles to achieving objectives
- C.
Capability to proactively encourage and ensure compliance with established policies and boundaries
- D.
All of the above
Correct Answer
B. Capability to proactively identify, assess and address uncertainty and potential obstacles to achieving objectivesExplanation
The correct answer is "Capability to proactively identify, assess and address uncertainty and potential obstacles to achieving objectives." This answer aligns with the definition of risk management provided by the OCEG GRC model. Risk management involves the ability to anticipate and mitigate potential risks and uncertainties that may hinder the achievement of organizational objectives. It emphasizes the proactive approach of identifying, assessing, and addressing risks before they become significant obstacles. This capability also includes the implementation of strategies and measures to manage and mitigate risks effectively.Rate this question:
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- 4.
Which of the following is the current trend in auditing, risk management and compliance?
- A.
Providing assurance over threats
- B.
Performing discrete audits in compliance with internal control
- C.
Front office function providing leading indicators about risk
- D.
All of the above
Correct Answer
C. Front office function providing leading indicators about riskExplanation
The current trend in auditing, risk management, and compliance is for the front office function to provide leading indicators about risk. This means that the front office, which is responsible for generating revenue and managing client relationships, is also taking an active role in identifying and assessing potential risks. By providing leading indicators, the front office can help the organization proactively manage and mitigate risks before they become major issues. This trend reflects a shift towards a more integrated and proactive approach to risk management and compliance.Rate this question:
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- 5.
According to IFAC, which of the following is not the responsibility of the board in relation to good governance of the organization?
- A.
Provide strategic direction
- B.
Ensure objectives are achieved
- C.
Ascertain that risks are managed appropriately
- D.
Quality assurance
Correct Answer
D. Quality assuranceExplanation
The board's responsibility in relation to good governance of the organization includes providing strategic direction, ensuring objectives are achieved, and ascertaining that risks are managed appropriately. However, quality assurance is not specifically mentioned as one of the responsibilities of the board according to IFAC.Rate this question:
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- 6.
Which of the following statements does not apply to ISO 31000?
- A.
It is the first standard issued by ISO for risk management
- B.
It can be used by any organization regardless of its size, activity or sector
- C.
It can be used for certification purposes
- D.
None of the above
Correct Answer
C. It can be used for certification purposesExplanation
ISO 31000 is a standard issued by ISO for risk management. It can be used by any organization, regardless of its size, activity, or sector. However, it cannot be used for certification purposes. Certification is a separate process that verifies compliance with a specific standard, but ISO 31000 is not intended for certification. Therefore, the statement "It can be used for certification purposes" does not apply to ISO 31000.Rate this question:
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- 7.
What does ISO Guide 73:2009 do?
- A.
Provides guidelines for risk management and analysis
- B.
Focuses on risk assessment techniques
- C.
Provides a basic vocabulary of the definitions of generic terms related to risk management
- D.
All of the above
Correct Answer
C. Provides a basic vocabulary of the definitions of generic terms related to risk managementExplanation
ISO Guide 73:2009 provides a basic vocabulary of the definitions of generic terms related to risk management. It does not specifically focus on risk assessment techniques or provide guidelines for risk management and analysis. Therefore, the correct answer is "Provides a basic vocabulary of the definitions of generic terms related to risk management."Rate this question:
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- 8.
Who is expected to take a more focused oversight role with respect to risk management control and governance process?
- A.
Internal auditors
- B.
External auditors
- C.
Audit committee
- D.
None of the above
Correct Answer
A. Internal auditorsExplanation
Internal auditors are expected to take a more focused oversight role with respect to risk management control and governance process. They are responsible for evaluating and monitoring the effectiveness of an organization's risk management and control processes. Internal auditors provide independent and objective assessments of the organization's internal controls and help identify areas of improvement. They play a crucial role in ensuring that the organization's risk management practices are in line with industry standards and regulatory requirements.Rate this question:
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- 9.
Where does an internal auditor typically spend most of his time auditing today?
- A.
People
- B.
Process
- C.
Technology
- D.
None of the above
Correct Answer
B. ProcessExplanation
An internal auditor typically spends most of his time auditing processes. This is because processes are a crucial aspect of any organization's operations and have a significant impact on its overall efficiency and effectiveness. By auditing processes, the internal auditor can identify any weaknesses, inefficiencies, or non-compliance issues that may exist, and make recommendations for improvement. This helps the organization to streamline its operations, reduce risks, and ensure that it is operating in accordance with relevant regulations and standards.Rate this question:
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- 10.
Which of the following statement about operations risk management is incorrect?
- A.
Transparent and inclusive
- B.
Dynamic, iterative and responsive to change
- C.
Disregarding human factors
- D.
Capable of continual improvement and enhancement
Correct Answer
C. Disregarding human factorsExplanation
The statement "Disregarding human factors" is incorrect because operations risk management should not ignore or neglect the impact of human factors on the overall risk management process. Human factors, such as human error, behavior, and decision-making, play a significant role in operational risks. Effective operations risk management should consider and address these human factors to minimize the likelihood and impact of risks.Rate this question:
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- 11.
Which of the following standards is used for disaster management and for managing the ERM process?
- A.
ISO 22301
- B.
NFPA 1600
- C.
FFIEC
- D.
ISO 27031
Correct Answer
B. NFPA 1600Explanation
NFPA 1600 is the correct answer because it is a standard developed by the National Fire Protection Association (NFPA) that provides guidelines for disaster management and emergency management programs. It covers various aspects of preparedness, response, recovery, and mitigation for all types of disasters, including natural disasters, technological emergencies, and terrorist events. NFPA 1600 is widely recognized and used by organizations and government agencies to establish effective emergency management systems and ensure the continuity of operations during and after a disaster.Rate this question:
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- 12.
Australian guidelines for ERM are usually stricter than US.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The Australian guidelines for ERM (Enterprise Risk Management) are generally stricter than those in the US. This means that Australian companies are likely to have more stringent requirements and regulations when it comes to managing and mitigating risks within their organizations. This could be due to various factors such as different legal frameworks, industry standards, or cultural attitudes towards risk management. Overall, this suggests that Australian companies may have a higher level of risk management practices compared to their counterparts in the US.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Mar 18, 2015Quiz Created by
Complianceon1
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