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The benefits of earning the GAQM ISO-31000-CLA certification are numerous. Certified professionals are recognized for their expertise in risk management and are highly sought after by employers. ISO 31000 - Certified Lead Risk Manager certification also provides a competitive edge in the job market and can lead to higher salaries and better job opportunities. Additionally, certified professionals have access to a network of like-minded individuals and resources that can help them stay up-to-date with the latest trends and best practices in risk management.
NEW QUESTION # 52
Which risk identification involves creating alternative ways to achieve an objective?
- A. Scenario Based
- B. Objectives-Based
Answer: A
Explanation:
Explanation
According to , page 11, scenario based risk identification involves "creating different scenarios based on varying assumptions about how events might unfold". This can help explore alternative ways to achieve an objective under different circumstances.
NEW QUESTION # 53
The Chief Risk Officer chairs the ERM/RM steering committee.
- A. False
- B. True
Answer: B
Explanation:
Explanation
The Chief Risk Officer chairs the ERM/RM steering committee. The ERM/RM steering committee oversees the organization's risk management activities and provides guidance and support to senior management.
NEW QUESTION # 54
Risk management is systematic, structured, and timely.
- A. False
- B. True
Answer: B
Explanation:
Explanation
Risk management is systematic, structured, and timely4. Systematic means that risk management follows a logical and consistent approach. Structured means that risk management has clear steps, roles, and responsibilities. Timely means that risk management provides information in time for decision making.
NEW QUESTION # 55
Transparency and inclusiveness are key ISO 31000:2018 attributes.
- A. False
- B. True
Answer: B
Explanation:
Explanation
Transparency and inclusiveness are key ISO 31000:2018 attributes. Transparency means that risk management activities are visible, understandable, and verifiable by relevant stakeholders. Inclusiveness means that appropriate stakeholders are involved in risk management decisions and actions.
NEW QUESTION # 56
Which of the following statements about captive insurance companies are correct?
1. A captive cannot act as a reinsurer.
2. A captive can access reinsurance markets.
3. A captive can sometimes offer greater cover than is available in the insurance market.
4. A captive must be located in the same country as its parent company.
- A. 1 and 4.
- B. 2 and 3.
- C. 1 and 2.
Answer: B
Explanation:
Explanation
According to 3, a captive insurance company is "a wholly owned subsidiary insurer that provides risk mitigation services for its parent company or related entities". It can act as a reinsurer by accepting risks from other insurers or captives 1. It can also access reinsurance markets to transfer some of its own risks 1. It can sometimes offer greater cover than is available in the insurance market by tailoring its policies to suit its parent's needs 3. It does not have to be located in the same country as its parent company; in fact, many captives are domiciledoffshore for tax or regulatory reasons
NEW QUESTION # 57
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
Answer: B
Explanation:
Explanation
According to 1, OCEG GRC model is "a framework for integrating governance, risk management, compliance and ethics/culture into a single capability". It defines risk management as "the capability that enables an organization to understand how uncertainty affects its ability to achieve objectives" 2.
NEW QUESTION # 58
Who is expected to take a more focused oversight role with respect to risk management control and governance process?
- A. Audit committee
- B. External auditors
- C. None of the above
- D. Internal auditors
Answer: D
Explanation:
Explanation
According to 3, page 7, one of the current trends in auditing, risk management and compliance is "increasing expectations for internal auditors to take a more focused oversight role with respect to enterprise-wide governance processes". Internal auditors can provide independent assurance on how well an organization manages its risks using various tools such as audits, reviews, assessments and evaluations.
NEW QUESTION # 59
Which of the following consists of risk management principles, framework, and process that have been adopted as a national risk management standard by more than 60 countries?
- A. ISO 27001:2013
- B. ISO 14001:2018
- C. ISO 9001:2015
- D. ISO 31000:2018
Answer: D
Explanation:
Explanation
ISO 31000:2018 consists of risk management principles, framework, and process that have been adopted as a national risk management standard by more than 60 countries . It provides guidelines on managing any type of risk faced by organizations.
NEW QUESTION # 60
New definition of risk under ISO 31000 and 31010 is:
- A. Possibility of investment loss
- B. Probability of an event that will have an impact on objectives
- C. Danger that injury, damage, or loss will occur
- D. Probability of loss to an insurer
Answer: B
Explanation:
Explanation
According to ISO/IEC Guide73 (2009), clause 1., risk is defined as "the effect of uncertainty on objectives".
This definition applies to both ISO/IEC Guide73 (2009) and ISO31000 (2018), which are standards for risk management terminology and principles respectively.
NEW QUESTION # 61
Enhanced risk management emphasizes the continual improvement of risk management capabilities.
- A. False
- B. True
Answer: B
Explanation:
Explanation
Enhanced risk management emphasizes the continual improvement of risk management capabilities1. This means that risk management is regularly reviewed and updated to ensure its relevance, adequacy, and effectiveness.
NEW QUESTION # 62
How many types of potential risk strategies exist?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: B
Explanation:
Explanation
According to 1, there are four types of potential risk strategies for threats: avoid (eliminate or change), transfer (share or outsource), mitigate (reduce or control), accept (retain or monitor). There are also four types of potential risk strategies for opportunities: exploit (ensure or enhance), share (allocate or collaborate), enhance (increase or maximize), accept (acknowledge or watch).
NEW QUESTION # 63
What is the role of risk management in the strategic planning process?
- A. Develop risk treatment plans.
- B. Draft the decisions to be made.
- C. Identify threats and opportunities.
- D. Challenge the decisions made.
Answer: C
Explanation:
Explanation
According to , page 7-8, one of the roles of risk management in the strategic planning process is to identify threats and opportunities that could affect the organization's objectives and performance.
NEW QUESTION # 64
ISO 31000:2018 currently has a tactical and process focus.
- A. True
- B. False
Answer: B
Explanation:
Explanation
The ISO 31000:2018 standard provides a framework for risk management, with a focus on the strategic and integrated aspects of risk management. It outlines principles, a framework, and a process for managing risk in organizations of all kinds. The focus of the standard is on aligningrisk management with the organization's context, objectives, and strategy, and on integrating risk management into all aspects of an organization's governance, culture, and performance.
NEW QUESTION # 65
Risk management takes human and cultural factors into account.
- A. False
- B. True
Answer: B
Explanation:
Explanation
Risk management takes human and cultural factors into account . Human factors include perception, judgment, behavior, and communication that influence risk management. Cultural factors include values, beliefs, norms, and expectations that shape the organization's risk culture.
NEW QUESTION # 66
Enterprise Risk Management (ERM) is considered to have a significant difference compared with traditional risk management approaches because ERM
- A. ensures that an organisation's objectives will be achieved.
- B. takes an integrated or holistic approach.
- C. addresses strategic, tactical and operational risk management.
Answer: B
Explanation:
Explanation
According to 2, domain 1, ERM "is a coordinated set of activities and methods that is used by organizations to manage risks across the enterprise". It takes an integrated or holistic approach that considers all types of risks and their interrelationships across the organization's functions and levels.
NEW QUESTION # 67
Treatment plan becomes a living document of defining the direction of the risk treatment and being able to monitor progress against the plan.
- A. False
- B. True
Answer: B
Explanation:
Explanation
Treatment plan becomes a living document of defining the direction of the risk treatment andbeing able to monitor progress against the plan3. Treatment plan helps to ensure that risk treatment actions are aligned with the changing context, objectives, and stakeholder expectations.
NEW QUESTION # 68
As part of the ISO 31000 risk management process, 'monitoring and review' is best thought of as which of the following?
- A. An extra stage.
- B. Part of risk assessment.
- C. A feedback loop.
Answer: C
Explanation:
Explanation
According to 3, clause 6.5., monitoring and review "is intended as a feedback loop for checking whether any change has occurred either internally or externally that may affect performance against objectives". It helps to ensure that the risk management process remains relevant and effective over time.
NEW QUESTION # 69
Risk management professionals conduct supply-chain analyses to identify
- A. international regulatory requirements.
- B. potential vulnerabilities to the organization.
- C. customer technology needs.
- D. contingent business interruption coverage.
Answer: B
Explanation:
Explanation
According to page 12 of the source, risk management professionals conduct supply chain analysis to identify potential vulnerabilities to the organization. These vulnerabilities can arise due to supplier dependency, breakdowns or disruptions in the supply chain, natural or human-made disasters, political or social instability, cyberattacks or other threats. Identifying such risks is crucial to prevent adverse impacts on the organization's operations, reputation or financial position.
NEW QUESTION # 70
Which type of risk remains after risk treatment has been applied?
- A. Controlled risk
- B. Residual risk
- C. Avoidance risk
- D. Accepted risk
Answer: B
Explanation:
Explanation
Residual risk is the type of risk that remains after risk treatment has been applied1. Residual risk reflects the remaining exposure or uncertainty after taking into account existing controls.
NEW QUESTION # 71
Understanding the potential causes of risk events will primarily help an organisation to
- A. reduce the frequency of loss.
- B. eliminate all risks
- C. improve internal audit procedures.
- D. comply with corporate governance standards.
Answer: A
Explanation:
Explanation
Understanding the potential causes of risk events will primarily help an organisation to reduce the frequency of loss. This is because identifying and analysing the sources and drivers of risks can enable an organisation to implement preventive or mitigating measures.
NEW QUESTION # 72
A train has crashed and is badly damaged. There have been numerous claims from injured passengers as well as a loss of revenue for the train operator. This is an example of
- A. risk severity.
- B. risk aggregation.
- C. risk categorisation.
- D. risk probability.
Answer: B
Explanation:
Explanation
A train crash and its consequences is an example of risk aggregation, which is the combined effect of multiple risks on an organisation's objectives3. Risk aggregation can result in losses that are greater than the sum of individual losses.
NEW QUESTION # 73
__________ means doing something according to a plan or method.
- A. Formal
- B. Systematic
- C. Comprehensive
- D. Informal
Answer: B
Explanation:
Explanation
Systematic means doing something according to a plan or method. Systematic implies orderliness, consistency, and rigor in applying risk management.
NEW QUESTION # 74
Which of the following is a process with inputs, activities, and outcomes?
- A. Quality management
- B. Risk management
- C. Supply chain management
- D. Financial management
Answer: B
Explanation:
Explanation
Risk management is a process with inputs, activities, and outcomes1. The inputs are the organization's context and risk criteria. The activities are risk identification, analysis, evaluation, and treatment. The outcomes are improved decision making, performance, and resilience.
NEW QUESTION # 75
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