Risk Management & Compliance Flashcards

Which international standard provides general guidelines for risk management that is commonly referenced alongside ISO 55001?

Answer: ISO 31000

ISO 31000 provides principles, a framework, and a process for managing risk in any organization.

In asset risk assessment, risk is most commonly expressed as a combination of which two factors?

Answer: Likelihood and consequence

Risk is typically evaluated as the likelihood of an event multiplied by or combined with its consequence.

Which ISO 55001 clause requires the organization to determine actions to address risks and opportunities?

Answer: Clause 6.1

Clause 6.1 in the Planning section addresses actions to address risks and opportunities for the asset management system.

What does an organization's risk appetite describe?

Answer: The amount and type of risk it is willing to pursue or retain

Risk appetite is the amount and type of risk an organization is prepared to pursue or retain in pursuit of its objectives.

What is residual risk?

Answer: Risk remaining after risk treatment has been applied

Residual risk is the risk that remains after controls or treatments are implemented.

Purchasing an insurance policy to cover losses from a transformer failure is an example of which risk treatment strategy?

Answer: Transfer

Insurance shifts the financial consequences of the risk to a third party, which is risk transfer.

In a bowtie analysis, what sits at the center of the diagram?

Answer: The top (hazardous) event

The bowtie places the top event in the center, with threats and preventive barriers on the left and consequences and mitigating barriers on the right.