Risk Assessment and Management Flashcards
6 cards from real 8100 Professional Level Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Risk Assessment and Management flashcards as text
What does 'risk mitigation' aim to accomplish?
Answer: Reduce the probability or impact of a risk to an acceptable level
Mitigation actions reduce either the likelihood of a risk occurring or the severity of its impact if it does occur.
What is the purpose of a 'risk audit' in professional practice?
Answer: To assess the effectiveness of risk management processes and the implementation of risk responses
Risk audits evaluate whether risk response actions are being implemented as planned and whether they are achieving the intended results.
In enterprise risk management (ERM), what does the term 'risk universe' refer to?
Answer: The complete set of risks an organization could potentially face across all its functions
The risk universe is the comprehensive inventory of all potential risks facing an organization, serving as the starting point for prioritization.
What is a 'bowtie analysis' used for in professional risk assessment?
Answer: Visually mapping the causes of a risk event on the left and its consequences on the right, with controls in between
Bowtie analysis provides a clear visual representation of risk pathways, preventive controls (stopping causes from leading to the event) and recovery controls (limiting impact after the event).
Which principle ensures that the person most capable of managing a risk is assigned as its owner?
Answer: Risk ownership aligned to control authority
Effective risk ownership assigns each risk to the individual with the authority and capability to implement the corresponding response actions.
What is the main purpose of conducting a 'root cause analysis' when a risk materializes?
Answer: To identify the underlying cause of the risk event so corrective action prevents recurrence
Root cause analysis digs beneath symptoms to find the fundamental cause, enabling corrective actions that prevent the same event from happening again.