MIDTERM - Risk mangement Flashcards
Risk may arise from?
A. Uncertainty
B. Projected loss
C. Reasonable assurance
D. Confidence level
A. Uncertainty
Which of the following carries the least environmental, health, and safety risk?
A. A malfunction at a nuclear plant that causes a blackout and results in a loss of public confidence.
B. A chemical plant that disposes of waste in nearby river
C. A hydroelectric power plant that is located several miles from a small town
D. A skyscraper construction site that has had several mishaps, including injuries and death.
C. A hydroelectric power plant that is located several miles from a small town
Which of the following is not a key objective of the risk management process?
A. Risk is periodically reassessed on an ongoing basis.
B. Risk mitigation (reduction) activities are designed and implemented to reduce, or manage, risk at levels that are acceptable.
C. Risk that arise from business strategies are identified and prioritized.
D. Review of previous risk evaluation reports by management, external auditors, and other sources.
D. Review of previous risk evaluation reports by management, external auditors, and other sources.
Which of the following would not be considered a strategic risk?
A. Merger and acquisition activity
B. Competition
C. Fraud
D. Resource allocation
C. Fraud
Financial management risk is ________________________.
A. Deciding which risk must be addressed and prioritizing them
B. Managing risk connected with the day to day operations of the company
C. The use of financial instruments to management exposure to credit, market and other financial risks to create economic value to the company.
D. The level of risk that resides with an event or process prior to management taking a mitigating action.
C. The use of financial instruments to management exposure to credit, market and other financial risks to create economic value to the company.
When the lkelihood of risk is low and the potential impact is also low, the most appropriate risk response would be?
A. Reducing the risk by trying to minimize the loss that might occur.
B. Transferring the risk to another party through hedging or similar action
C. Avoid the risk in whatever manner is available
D. Accepting the risk, since the cost of reducing the risk is greater than potential benefits.
D. Accepting the risk, since the cost of reducing the risk is greater than potential benefits.
Which of the following best illustrates risk?
A. Buying a lotto ticket
B. Taking CPA licensure examination
C. Slippery floor at 5th floor, PUP main building
D. COVID-19 contamination
A. Buying a lotto ticket
Which of the following is an example of non-financial risk?
A. Market risk
B. Fraud risk
C. Credit risk
D. Liquidity risk
B. Fraud risk
The online petition for ABS-CBN franchise renewal was sabotage by trolls. According to the union groups, the sabotage came from bots and fake accounts, and used obscenities, cuss words, and repetitive names as usernames. This is an example of what risk?
A. Technological risk
B. Denial of service attack
C. Data and systems integrity risk
D. Internet risk
B. Denial of service attack
It is the culture, capabilities, and practices that organizations integrate with strategy-setting and apply when they carry out that strategy, with a purpose of managing the risk in creating, preserving, and realizing value.
A. Enterprise Risk Management
B. Risk Management Processs
C. Governance and Business Ethics
D. The Turnbull Guidance
A. Enterprise Risk Management
Under ISO 31000:2018 and COSO 2017 ERM Framework, the purpose of risk management is?
A. To create value
B. To eliminate risk
C. To increase profit
D. To comply with regulatory requirement
A. To create value
Which framework considers ris management process as separate and distinct from the framework?
A. COSO 2017 Enterprise Risk Management - Integrating with strategy and performance
B. COSO 2014 Enterprise Risk Management - Integrated Framework
C. ISO 31000: 2018 - Risk Management Principles and Guidelines
D. Risk Management Standard - IRM/Alarm/AIRMIC 2002
C. ISO 31000: 2018 - Risk Management Principles and Guidelines
This refers to the foundation of managing risk and should be considered when establishing the organization’s risk management framework and processes.
A. Framework
B. Principles
C. Process
D. Standards
B. Principles
Unlike COSO ERM framework, risk management process is not an integrated component of the framework under ISO 31000: 2018. Moreover, ISO requires that risk management must be integrated into _____________________________.
A. Organization Activities
B. Governance and Culture
C. Risk management framework
D. Internal audit activity
A. Organization Activities
