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RSK 4802 EXAM PACK UPDATED 2022.pdf
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- University Of South Africa
RSK 4802 EXAM PACK UPDATED all areas well covered with articulated answers
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RSK 4802EXAM PACK
2022
QUESTIONS
AND ANSWERS
,RSK 4802 EXAM PACK 2022
JANUARY /FEBRUARY 2016
QUESTION1.1
ai)
Risk management is an important process because it empowers a business with the
necessary tools so that it can adequately identify and deal with potential risks.
Once a risk has been identified, it is then easy to mitigate it. In addition, risk
management provides a business with a basis upon which it can undertake sound
decision-making.
-For a business, assessment and management of risks is the best way to prepare for
eventualities that may come in the way of progress and growth. When a business
evaluates its plan for handling potential threats and then develops structures to
address them, it improves its odds of becoming a successful entity.
In addition, progressive risk management ensures risks of a high priority are dealt
with as aggressively as possible. Moreover, the management will have the
necessary information that they can use to make informed decisions and ensure
that the business remains profitable.
Importance of Risk Management plan
,Risk management plans offer several benefits that make them a worthwhile
endeavor for every business. For example, risk management plans help companies
to identify the potential risks they may face. Being aware of these risks allows
businesses to make plans to avoid specific risks or deal with them when they arise.
-Having a risk management plan also makes financial sense because it allows
businesses to prepare themselves financially for the most likely problems. It may
also increase a business’s appeal to lenders. In addition, risk management plans
protect the company’s resources by allowing the company to prioritize risks and
plan to deal with each possibility. This conserves important resources, allowing the
company to focus on more important tasks such as accomplishing sales goals and
more.
-Risk management in business can improve the company’s brand by letting
employees, customers and other businesses know that the company is responsible
and resourceful. Furthermore, risk management plans give companies a chance to
gather important information that may be useful for other purposes as well.
b)Identify the four main categories of strategies for managing risk
-Avoidance
-Acceptance
-Mitigation
-Control
c)Briefly explain to Mr Sithole the difference between the following aspects:
i)AN INTERPRISE RISK MANAGEMENT FRAMEWORK
-The risk management framework relates to the basic structure that is used to
address the risks faced by an organization. The purpose of the risk management
, framework is to assist the organization towards the intergation of risk management
into its management process so that it becomes a routine activity
ii) A risk policy
- A risk policy sets out how the risks, which have been identified by the risk
assessment procedure will be managed and controlled. The risk management
policy assigns responsibility for performing key tasks, as it establishes
accountability with the appropriate managers, defines boundaries and limits as they
intend to formalize the reporting structures. The policy should address specific
responsibilities of the board, internal audit, external audit, the risk committee, the
central risk function, employees and third party contractors towards the
implementation of the risk policies
iii)Risk management process
-According to International Risk Stanadards, ISO 31000(2009),A risk
management process is the one that systematically applies management policies,
procedures and practices to set the activities intended to establish the context,
communicate and consult with stakeholders, and identify, analyze, evaluate,
treat ,monitor and review the anticipated risk exposures
QUESTION 1.2
Loss prevention requires the identification of the source (or cause) of loss√ and the
impact of environmental factors and secondly the elimination of reduction of these
effects. √ Two customary approaches are the engineering approach and the human
or personal approach. (See P 164 of the prescribed book by Valsamakis)
(plus any √√√√√√)
human approach √
technique of loss control and reduction of losses in insurance. Supporters of this
method believe that the safety attitudes of individuals determine the safety
precautions they take. √ The human approach seeks to convince people to want to
be safe in order to reduce loss frequency and severity. For example, campaigns
encouraging the use of seat belts help promote a safety-conscious society.
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