CCM Risk and Internal Controls 2

Question 1

Which risk assessment methodology assigns a numerical score to risks based on probability and impact, allowing for quantitative comparison?

Accepted Answer

Risk scoring matrix

Answer

A risk scoring matrix multiplies probability by impact scores to produce a numerical risk score that enables objective, quantitative comparison across risks.

Question 2

Under the COSO ERM framework, which component ensures that risk responses are aligned with the entity's risk appetite?

Accepted Answer

Risk response

Answer

The Risk Response component of COSO ERM involves selecting responses (avoid, reduce, share, accept) that bring residual risk within the entity's risk appetite.

Question 3

A compliance officer discovers that a key control is being bypassed by senior management. This situation is best described as:

Accepted Answer

Management override

Answer

Management override occurs when senior leaders circumvent established internal controls, representing one of the most serious internal control risks.

Question 4

Which type of risk represents the possibility that a compliance program will fail due to inadequate policies, procedures, or controls?

Accepted Answer

Control risk

Answer

Control risk is the risk that a material misstatement or compliance failure will not be prevented or detected by internal controls.

Question 5

When performing a Business Impact Analysis (BIA), the primary goal is to:

Accepted Answer

Prioritize recovery of business functions by criticality

Answer

A BIA identifies and prioritizes critical business functions to determine recovery time objectives and the order in which operations should be restored after a disruption.

(CCM) Certified Compliance Manager Practice Test

(CCM) Certified Compliance Manager Practice Test

CCM Risk and Internal Controls 2