CCCP Risk Management & Internal Controls 3

Question 1

What is the PRIMARY purpose of a Key Risk Indicator (KRI)?

Accepted Answer

To provide early warning signals of increasing risk exposure

Answer

KRIs are forward-looking metrics that signal when risk levels are trending toward or beyond acceptable thresholds before an event occurs.

Question 2

Which of the following best describes 'inherent risk' in a compliance context?

Accepted Answer

Risk that exists before any mitigating controls are in place

Answer

Inherent risk is the raw or gross risk level existing in a business process or activity before any controls or mitigation measures are applied.

Question 3

A compliance officer discovers that controls designed to prevent money laundering are operating but are insufficient to reduce risk to an acceptable level. The BEST next step is to:

Accepted Answer

Implement additional or enhanced compensating controls

Answer

When existing controls are insufficient, the appropriate response is to strengthen or add compensating controls to close the gap before considering acceptance or escalation.

Question 4

Under the Three Lines of Defense model, which line is responsible for setting risk appetite and overseeing the overall risk management framework?

Accepted Answer

Board and senior management

Answer

The board and senior management sit above the three lines and are responsible for establishing risk appetite and providing overall governance of the risk framework.

Question 5

Which control activity is MOST effective at detecting unauthorized access to sensitive systems after the fact?

Accepted Answer

System access log reviews

Answer

Reviewing system access logs is a detective control that identifies unauthorized or suspicious access activities after they have occurred.

(CCCP) Certified Corporate Compliance Professional Practice Test

(CCCP) Certified Corporate Compliance Professional Practice Test

CCCP Risk Management & Internal Controls 3