IA Knowledge II

Question 1

The acceptable levels of variation relative to the achievement of objectives.

Answer 1

Risk tolerance

Question 2

Ranking risks, formally or informally, from the highest to the lowest, establishing the relative strength of each risk and the potential consequences of each.

Answer 2

Risk prioritization

Question 3

The actions taken to manage risk.

Answer 3

Risk response

Question 4

A process to identify, assess, manage, and control potential events or situations to provide reasonable assurance regarding the achievement of an organization’s objectives.

Answer 4

Risk management

Question 5

The evaluation of the magnitude of risk, based on the likelihood and impact of risk occurrence.

Answer 5

Risk measurement

Question 6

The assignment of risk into categories, such as financial risk, operational risk, strategic risk, or reputation risk.

Answer 6

Risk classification

Question 7

The method of recognizing possible threats and opportunities.

Answer 7

Risk identification

Question 8

The amount of risk an organization is willing to accept in pursuit of value.

Answer 8

Risk appetite

Question 9

The identification of risk, the measurement of risk, and the process of prioritizing risk (considering likelihood and impact) or selecting alternatives based on risk.

Answer 9

Risk assessment

Question 10

The risk remaining after management takes action to reduce the impact and likelihood of an adverse event, including control activities in responding to a risk.

Answer 10

Residual risk

Question 11

The identification of risk, the measurement of risk, and the process of prioritizing risk or selecting alternatives based on risk.

Answer 11

Risk analysis

Question 12

As related to risk, an uncertain event with a positive consequence.

Answer 12

Opportunity

Question 13

The type of risk found throughout the environment.

Answer 13

Pervasive risk

Question 14

Limitations of risk management, control, and governance related to human judgment, resource limitations, and the need to balance the costs of controls in relation to expected benefits.

Answer 14

Inherent limitations

Question 15

The risk derived from the environment without the mitigating effects of internal controls.

Answer 15

Inherent risk

Question 16

The policies, procedures (both manual and automated), and activities that are part of a control framework, designed and operated to ensure that risks are contained within the level that an organization is willing to accept.

Answer 16

Control processes

Question 17

A structured, consistent, and continuous process across the whole organization for identifying, assessing, deciding on responses to, and reporting on opportunities and threats that affect the achievement of its objectives.

Answer 17

Enterprise risk management (ERM)

Question 18

A condition that warrants attention as a potential or real shortcoming that leaves the organization excessively at risk.

Answer 18

Control deficiency

Question 19

The attitude and actions of the board and management regarding the importance of control within the organization; provides the discipline and structure for the achievement of the primary objectives of the system of internal control.

Answer 19

Control environment

Question 20

The comparison of an organization or project to similar internal or external organizations or projects, for the purpose of determining areas for potential improvement and to identify best practices. May also be used to assess likelihood and impact of potential events across an industry.

Answer 20

Benchmarking

Question 21

The conformity and adherence to policies, plans, procedures, laws, regulations, contracts, or other requirements.

Answer 21

Compliance

Question 22

A risk level derived from an organization’s legal and regulatory compliance responsibilities, its threat profile, and its business drivers and impacts.

Answer 22

Acceptable risk level

Question 23

A level of control that is present if management has planned and organized in a manner that provides reasonable assurance that the organization’s risks have been managed effectively and that the organization’s goals and objectives will be achieved efficiently and economically.

Answer 23

Adequate control

Question 24

The risk derived from the environment without the mitigating effects of internal controls.

Answer 24

Absolute risk

Question 25

A type of risk that revolves around the business impact that would be experienced if certain risks were realized.

Answer 25

Acceptable risk