Certified Management Accountant Risk Management 5

Question 1

Which committee is primarily responsible for risk oversight at the board level in a publicly traded US company?

Accepted Answer

Audit committee

Answer

The audit committee typically oversees the organization's risk management framework and internal control environment at the board level.

Question 2

Expected Monetary Value (EMV) is calculated as:

Accepted Answer

Probability × Impact

Answer

EMV is the product of the probability of a risk event occurring and its monetary impact, used to prioritize risk responses.

Question 3

Which of the following is an example of reputational risk?

Accepted Answer

A data breach exposing customer personal information leading to public backlash

Answer

Reputational risk involves damage to an organization's brand or public standing, such as negative publicity following a data breach.

Question 4

A risk that has been identified but for which management has consciously decided to do nothing is said to be:

Accepted Answer

Accepted

Answer

Risk acceptance (also called risk retention) is when an organization acknowledges a risk and chooses to bear any resulting loss without further action.

Question 5

In the context of supply chain risk, 'single sourcing' increases which type of risk?

Accepted Answer

Concentration risk

Answer

Relying on a single supplier concentrates dependency risk — if that supplier fails, the entire supply is disrupted.

Certified Management Accountant Practice Test

Certified Management Accountant Practice Test

Certified Management Accountant Risk Management 5