Exam (elaborations)
CIA Exam Part 1 - Chapter 4_ Risk Management Processes.
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- PSYC210 Exam 02 Review
- Institution
- PSYC210 Exam 02 Review
CIA Exam Part 1 - Chapter 4_ Risk Management Processes.
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CIA Exam Part 1 - Chapter 4: RiskManagement Processes
Business Context may be: - ANS-1. Dynamic: (new, emerging, and changing risks can
appear at any time)
2. Complex: (a context may have new interdependencies and interconnections)
Unpredictable: Change occurs rapidly an in unanticipated wave (currency fluctuations)
Business Objectives may relate to: - ANS-1. Financial Performance
2. Operational Excellence
3. Compliance obligations
Business objectives should be (4) : - ANS-1. Specific
2. Measurable
3. Observable
4. Obtainable
How are the maturity levels of risk management measured? - ANS-1. Risk culture -
decision making, objective setting, compensation structure
2. Risk governance - competent personnel
3. Risk management process - assessment, treatment, monitoring, reporting
How does an organization develop and evaluate its portfolio view of risk? -
ANS-Culmination of:
1. Risk identification
2. Risk assessment
3. Risk Prioritization
4. Risk response
How is risk measured? - ANS-Risk is measured in terms of
1. Impact
2. Likelihood
, Is the risk assessment formal or informal? Which three elements does it involve? -
ANS-The risk assessment can be formal or informal. It involves:
1. Assessing SIGNIFICANCE of an event
2. Assessing events LIKELIHOOD
3. Considering the means of MANAGING risk
Risk profile ASPECTS include - ANS--Product
-Service
-Geography
Risk profile LEVELS include: - ANS--Entity
-Division
-Operating unit
-Function
Value is: (4) - ANS-1. Created (benefits obtained EXCEED costs)
2. Preserved (value is sustained)
3. Realized (benefits are transferred to stakeholders)
4. Eroded (Management's strategy does NOT produce expected results)
What are examples of context? - ANS-1) Laws and regulations
2) Capital projects
3) Business processes
4) Technology
5) Market Risk Interest rates, foreign exchange rates, equity investments
6) Organizations
What are examples of external risk factors at the entity level? - ANS-1. Technological
changes
2. Changes in customer wants/expectations
What are examples of internal risk factors at the entity level? - ANS-1. Interruptions in
automated systems
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