Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Corporate Governance > 6. Risk Management Frameworks And Standards > Flashcards

6. Risk Management Frameworks And Standards Flashcards

0
Q

How does the Institute define risk?

A 
The possibility of an event occurring
That will have an impact
On the achievement of objectives.
Risk is measured in terms of
Impact
And likelihood
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

The view of risk as a h—, enterprise-wide activity is a recent one.

A

Holistic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

When should a problem or hazard not be considered a risk?

A

When it does not or cannot affect the organisation’s objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Risk can create — as well as bring threats or dangers

A

Opportunities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the main two elements involved in measuring risk?

A

Impact

Likelihood

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How does the Institute define risk management?

A 
A process to
Identify
Assess
Manage
And control
Potential events or situations
To provide reasonable assurance
Regarding the achievement of the organisation's objectives
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How does COSO define Enterprise Risk Management?

A

A process effected by an entity’s board of directors, management and other personnel,
Applied in strategy setting and across the enterprise,
Designed to identify potential events that may affect the entity,
And manage risk to be within its risk appetite,
To provide reasonable assurance
Regarding the achievement of entity objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Many top level considerations of risk concentrate on processes and structures. What else should they consider?

A

Culture

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Organisations with a — culture find it difficult to review materialised risks, incidents and near misses for lessons learned

A

Blame

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

The — of risk management are the elements of the organisation responsible for managing different aspects of risk

A

Structures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Outline the general steps of a risk management process

A 
Setting objectives
Identifying risks
Assessing impact and likelihood
Determine appetite
Implement responses
Monitoring and reporting of effectiveness of responses
Taking corrective action
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How does the Institute define risk appetite?

A 
The level of risk that is acceptable
To the board or management.
This may be set in relation to
The organisation as a whole,
For different groups of risks
Or at an individual risk level
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the main categories of risk management strategies?

A 
Terminate
Tolerate
Transfer
Treat
(Exploit)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

According to the Institute, Internal Audit will normally provide assurance on what three areas of the risk management process?

A

Design and effectiveness of RM processes
Management of “key” risks, including effectiveness of responses
Reliable and appropriate assessment of risks and reporting of risk and control status

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the three most important sources of current thinking on risk management?

A

Financial services
Hazard management
Insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Historically, risk management has been a key discipline within the — — sector

A

Financial services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

List the main types of risk

A 
Strategic
Operational
Financial
Legal
Reputational
Project
Information
Country
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Operational risks relate to the — carried out within an organisation

A

Activities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

— risks relate to the activities carried out within the organisation

A

Operational

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Operational risks may include risks associated with…

A 
Recruitment
Retention
Human error
Fraud
Business interruption
Security
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Operational risks may arise from what sources?

A

Organisation’s structure and systems
People
Products
Processes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

How does the Office of Government Commerce describe strategic risk?

A

Risk concerned with
Where the organisation wants to go
How it plans to get there
And how it can ensure survival

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Strategic risks are more likely to relate to — factors than operational risks

23
Q

Strategic risks are more likely to be beyond the organisation’s ability to — or — than operational risks

A

Manage or control

24
Strategic risks are usually --- term than operational risks
Longer
25
As well as presenting significant dangers to the organisation, strategic risks can also provide ---
Opportunities
26
Financial risks include what four types of risk?
Credit Liquidity Market Investment
27
From what three areas do legal risks mainly arise?
Threat of litigation Risk of breaching legislation and regulations Risk posed by changes in legislation and regulations
28
What are the main types of project risk?
``` Human Technical Cost Quality Time Benefits Partner risk ```
29
Which of the key corporate governance committees highlighted the linkage between corporate governance and risk management?
The Hampel Committee (1998)
30
Which principle of the Code states that "the board should maintain risk management and internal control systems"?
C2 Risk Management and Internal Control
31
What does principles C2 Risk Management and Internal Control state?
The board should maintain risk management and internal control systems
32
According to provision C.2.1, the board should, at least annually...
``` Conduct a review of the effectiveness Of the company's Risk management And internal control systems And report to shareholders that they have done so ```
33
The annual review of risk management and internal control systems required by provision C.2.1 should cover what?
All material controls, including: Financial Operational And compliance controls
34
How did the business community initially react when the requirement to include and annual review of risk management and internal control was introduced into the 1998 combined code.
They were unsure how to conduct such a review, especially where they had previously only considered financial controls
35
What was the response to the business community's concerns over the requirement for annual review as stated in provision C.2.1?
The Turnbull Guidance | Produced by Nigel Turnbull
36
List the principal risk management standards
``` AS/NZS 4360:1999 and AS/NZS 4360:2004 HM Treasury "Orange Book" 2001 & 2004 IRM Risk Management Standard 2002 COSO Enterprise Risk Management 2004 ISO 31000 ```
37
Which large UK organisation based their risk management standards on AS/NZS 4360?
National Health Service
38
What are the seven steps of the risk management process according to AS/NZS 4360?
``` Establish context Identify risks Analyse risks Evaluate risks Treat risks Communicate risks Monitor risks ```
39
When was AS/NZS 4360 withdrawn?
Following the issue of ISO 31000
40
What are the six steps of the Orange Book risk management process?
``` Identify risks and define framework Evaluate risks Assess risk appetite Identify responses to risks Gain assurance about effectiveness of risks Embed and review ```
41
When was the COSO Enterprise Risk Management framework published?
2004
42
According to the COSO ERM framework, what does ERM encompass?
Aligning risk appetite and strategy Enhancing risk response decisions Reducing operational surprises and losses Identifying and managing multiple and cross-enterprise risks Seizing opportunities Improving deployment of capital
43
According to COSO ERM, ERM can be considered a ---, ongoing and flowing through an entity
Process
44
According to COSO ERM, ERM can be considered as effected by --- at every level of the organisation
People
45
According to COSO ERM, ERM can be considered as applied in --- setting
Strategy
46
The COSO ERM framework is geared to achieving an organisation's objectives, set forth in what four categories?
Strategic Operations Reporting Compliance
47
The COSO ERM framework is based on the COSO internal control framework. What are its eight components?
Internal Environment Objective Setting Event Identification Risk Assessment Risk Response Control Activities Information and Communication Monitoring
48
ISO 31000 stresses the importance of the risk management ---
Context
49
What does ISO 31000 mean by the risk management "context"?
The structure that supports risk management processes
50
According to ISO 31000, what are the three elements of the risk management "context"?
Risk architecture Risk strategy Risk protocols
51
What does risk architecture comprise?
Roles and responsibilities | Communication and reporting structure
52
What does risk strategy comprise (as part of ISO 31000 risk context)?
Risk management policies, including: Risk appetite Risk attitude
53
What do risk protocols comprise?
Rules, procedures and guidelines, specifying: Risk management methodologies Tools and techniques Monitoring and reporting arrangements
54
An effective risk management framework ought to enable risk management to become a --- part of an organisation's approach, rather than a one off exercise
Living
55
An effective risk management framework ought to enable risk management to give encouragement to --- --- that is properly informed, understood and controlled within the overall risk appetite and control framework
Risk taking
56
An effective risk management framework ought to enable risk management to --- an organisation's corporate governance structures and requirements
Complement

Corporate Governance (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions