What steps can the risk management professional take to embed risk management in decision
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making? - ANSWER>>Include risk assessment in planning process; Leverage cross-functional
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risk assessment team and subject matter experts to identify enterprise risks; Consider cascading
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and cumulative effects
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Gap Analysis - ANSWER>>Technique that can be used to determine what steps might need to
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be taken to improve the organization's capacity to move from a current state to a desired future
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state.
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Risk appetite - ANSWER>>The total exposed amount that an organization wishes to undertake on
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the basis of risk-return trade-offs for one or more desire and expected outcomes.
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Communication and Consultation - ANSWER>>Risk management professional's role in |;, |;, |;, |;, |;, |;, |;, |;,
Implementing Risk Strategies
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Support Function: Legal - ANSWER>>Risk identification, assessment and treatment of risks
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related to the obligation an organization undertakes and transfers through contracting, as well
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as its compliance with applicable laws and regulatory obligations.
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What are the typical failures in risk management which can be avoided if it is embedded in the
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decision making process? - ANSWER>>Program not integrated into strategy or its execution;
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Focused on the wrong risks; Not executed in a repeatable process; Risk management is practiced
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in a silo; Activity not viewed as being value added
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Risks - ANSWER>>The effect of uncertainty on objectives
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The chance of something happening that will have an impact on objectives
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Being prepared for the worst and being poised to exploit opportunities as they are discovered
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,Enterprise Risk Management - ANSWER>>A strategic business discipline that supports the
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achievement of an organization's objectives by addressing the full spectrum of its risks and
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managing the combined impact of those risks as an interrelated risk portfolio.
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Support Function: Business continuity and crisis management - ANSWER>>Risk identification,
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assessment and creation of emergency response and recovery plans related to threats or
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hazards that might lead to operational disruptions
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Analysis - ANSWER>>A systematic examination and evaluation of data or information by breaking
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it into its component parts to uncover their relationships. An examination of data and facts to
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uncover and understand cause-effect relationships, thus providing basis for problem solving
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and decision making.
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To embed risk management in both routine and strategic decision, what should managers be
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able to recognize? - ANSWER>>The type of decision being made; Who should be included in the
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decision making process; Where in the process decisions are being made
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Risk management strategies' general focus - ANSWER>>Meeting or exceeding an organization's
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objectives
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Adhering to control-based objectives, rules and/or controls
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Support Function: Internal Audit - ANSWER>>Risk identification, assessment and treatment
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through audit plans with focus on fraud, corruption, regulatory noncompliance and/or
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misrepresentation related to the organization's internal control systems, financial operations,
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financial statements and reporting as well as enterprise risk and the organization's risk
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management framework and process.
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Strategic Plan - ANSWER>>Determines that actions the organization will take at any stage of the
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planning period as circumstances change.
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,Risk owner - ANSWER>>The individual who is ultimately accountable for ensuring that risk is
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managed appropriately, including the implementation of selected responses.
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Risk Identification Process - ANSWER>>Finding, Recognizing and Recording Risks
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Support Function: Compliance - ANSWER>>Risk identification, assessment and treatment of risk
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related to regulations that may affect the organization's ability to operate in its respective
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jurisdictions, as well as activities that fall within its compliance and ethics programs.
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To successfully integrate risk management into decision making, risk management professionals
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will rely on strategies that draw on personal and technical skills in - ANSWER>>Building
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organizational awareness; . Differentiating the different types of decisions used in varying
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situations using elements of decision quality; Performing various roles in the taking risk into
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account in decision-making process
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Strategy - ANSWER>>A complete plan of action for whatever situations might arise in achieving
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an organization's goals within the established time.
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Risk tolerance - ANSWER>>The amount of uncertainty an organization is prepared to accept in
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total or more narrowly within a certain business unit, a particular risk category or for a specific
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initiative.
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Strategic Risk Management - ANSWER>>A business discipline that drives deliberation and action
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regarding uncertainties and untapped opportunities that affect an organization's strategy and
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strategic execution.
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Value Chain - ANSWER>>The series of functions, processes, materials and activities (inputs)
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from concept to the eventual end user that creates and builds value at every step in order
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to deliver a product or service.
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, To build organizational awareness, the risk management professional needs to do the following:
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- ANSWER>>Be a persuasive communicator and facilitator; Have a clear communication plan;
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Engage interested parties, including primary and secondary audiences; Demonstrate that risk
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management creates the most value ; Develop feedback loops for continuous learning
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Risk Analysis - ANSWER>>The process of characterizing and understanding the nature of risk and
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of considering the level of risk in the context of the organization's willingness to accept risk.
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Support Function: Safety - ANSWER>>Risk identification, assessment and treatment of risks
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focused on preserving the physical well-being of employees and third parties.
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Likelihood, Consequences, other criteria such as timing, duration, vulnerability and
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interdependencies - ANSWER>>Risk is typically analyzed on the basis of
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Support Function: Information Security - ANSWER>>Risk Identification, assessment and treatment
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of risk arising our of or affecting information and technology infrastructure.
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To build organizational awareness, risk management creates the most value when -
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ANSWER>>Risk management Aligns with strategic goals; Takes corporate culture into account;
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Involves key enterprise functions
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Financial Statements - ANSWER>>Internal source of information that includes financial analytics
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or projections
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strategic planning team - ANSWER>>The risk manager should be a part of the
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to provide the structure discipline for consideration of risks in |;, |;, |;, |;, |;, |;, |;, |;, |;,
a strategic portfolio.
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Internal Audit Reports - ANSWER>>Internal source of information that focuses on business
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practices important to the goals and reflection of regulatory environment of the organization
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