COA Risk Management & Quality Assurance 3 — Questions and Answers
Question 1: Which risk response strategy involves choosing not to pursue an activity because the risk is too high?
- Risk mitigation
- Risk avoidance (Correct answer)
- Risk acceptance
- Risk sharing
Correct answer: Risk avoidance
Risk avoidance means eliminating the risk entirely by deciding not to engage in the activity that creates it.
Question 2: Benchmarking in quality assurance involves:
- Setting minimum wage standards for office staff
- Comparing organizational processes and performance against best-in-class standards (Correct answer)
- Creating a baseline budget for a new project
- Measuring employee satisfaction annually
Correct answer: Comparing organizational processes and performance against best-in-class standards
Benchmarking measures an organization's processes against industry leaders or best practices to identify improvement opportunities.
Question 3: An office administrator notices that the same data entry error occurs repeatedly. The BEST first step is to:
- Reprimand the employee responsible
- Conduct a root cause analysis to find why the error keeps happening (Correct answer)
- Switch to a different software system immediately
- Ignore it since minor errors are unavoidable
Correct answer: Conduct a root cause analysis to find why the error keeps happening
A root cause analysis will identify the systemic reason behind repeated errors so the process can be corrected at its source.
Question 4: The ISO 9001 standard is associated with:
- Environmental management systems
- Quality management systems (Correct answer)
- Information security management
- Business continuity planning
Correct answer: Quality management systems
ISO 9001 specifies requirements for a quality management system that helps organizations consistently meet customer and regulatory requirements.
Question 5: Which risk assessment matrix element describes how severely a risk event would impact the organization if it occurred?
- Probability
- Frequency
- Impact (Correct answer)
- Velocity
Correct answer: Impact
Impact measures the severity of consequences — such as financial loss, reputational damage, or operational disruption — if the risk materializes.
Question 6: A quality audit in an office setting typically involves:
- Reviewing financial statements for tax compliance
- Systematically examining processes to verify they meet established standards (Correct answer)
- Auditing employee email communications for policy violations
- Counting physical inventory in storage rooms
Correct answer: Systematically examining processes to verify they meet established standards
A quality audit is a structured review that checks whether processes, procedures, and outputs conform to defined quality standards.
Question 7: Which approach to risk management involves accepting a risk without taking specific action, typically because the cost of mitigation exceeds the potential loss?
- Risk avoidance
- Risk transfer
- Risk acceptance (Correct answer)
- Risk elimination
Correct answer: Risk acceptance
Risk acceptance is a conscious decision to acknowledge a risk and absorb any potential impact without implementing controls.
COA Risk Management & Quality Assurance 3
Which risk response strategy involves choosing not to pursue an activity because the risk is too high?