BMO Risk Management & Compliance 2

Question 1

What is Enterprise Risk Management (ERM) primarily designed to accomplish?

Accepted Answer

To provide a structured approach for identifying, assessing, and managing risks across the entire organization

Answer

ERM is a holistic framework that integrates risk identification, assessment, and response across all business units to support strategy execution and value protection.

Question 2

Which framework is most commonly referenced for IT-related risk management and compliance in business organizations?

Accepted Answer

COBIT (Control Objectives for Information and Related Technologies)

Answer

COBIT is a widely adopted framework developed by ISACA that provides guidance on IT governance, risk management, and compliance for business operations.

Question 3

What is the primary role of an internal audit function within a compliance and risk management program?

Accepted Answer

To provide independent assurance that risk management and internal controls are operating effectively

Answer

Internal audit provides independent, objective assurance and consulting services to evaluate whether risk management, control, and governance processes are adequate and effective.

Question 4

In risk management, what are the four primary risk treatment (response) options?

Accepted Answer

Accept, Avoid, Transfer, Mitigate

Answer

The four standard risk response strategies are: Accept (tolerate the risk), Avoid (eliminate the activity causing the risk), Transfer (shift risk to a third party), and Mitigate (reduce likelihood or impact).

Question 5

What distinguishes a compliance audit from a financial audit?

Accepted Answer

Compliance audits evaluate adherence to laws, regulations, and policies, while financial audits focus on the accuracy of financial statements

Answer

A compliance audit assesses whether an organization is adhering to applicable laws, regulations, policies, and procedures, whereas a financial audit examines whether financial statements accurately represent the organization's financial position.

(BMO) Business Management Officer Certification Practice Test

(BMO) Business Management Officer Certification Practice Test

BMO Risk Management & Compliance 2