CRA - Certified Risk Architect Enterprise Risk Management Frameworks Questions and Answers

Question 1

A global manufacturing firm is implementing an Enterprise Risk Management (ERM) framework.
The board is particularly focused on ensuring that risk management is not treated as a separate, isolated function but is deeply embedded in all significant business activities and strategic decisions.
Which principle of ISO 31000:2018 directly addresses this specific concern?

Accepted Answer

Risk management is an integral part of all organizational processes.

Answer

Risk management is based on the best available information.

Answer

Risk management is dynamic, iterative, and responsive to change.

Answer

Risk management is systematic, structured, and timely.

Question 2

In the COSO ERM Framework (2017), which component is primarily concerned with an organization's ethical values, desired behaviors, board oversight, and commitment to building human capital?

Accepted Answer

Governance & Culture

Answer

Strategy & Objective-Setting

Answer

Performance

Answer

Review & Revision

Question 3

A financial services company is deciding between adopting the ISO 31000 standard or the COSO ERM framework. The company operates in a highly regulated industry and requires a detailed, prescriptive approach that strongly links risk management with internal controls and strategic performance. Which framework would be more suitable for this organization?

Accepted Answer

COSO ERM, because it provides a more structured and detailed model with predefined components that integrate risk with strategy and performance.

Answer

ISO 31000, because it is an international standard applicable to any organization.

Answer

ISO 31000, because of its emphasis on flexibility and adaptability.

Answer

Both are equally suitable as they share the same core principles and application.

Question 4

A risk architect is reviewing their company's ERM program, which is based on the COSO framework. They notice that while risks are identified and assessed, the process for evaluating how well the ERM components are functioning over time and making necessary adjustments is weak. Which COSO ERM component needs to be strengthened?

Accepted Answer

Review & Revision

Answer

Performance

Answer

Information, Communication, & Reporting

Answer

Strategy & Objective-Setting

Question 5

Which of the following best describes a key objective of the COSO ERM - Integrating with Strategy and Performance (2017) framework?

Accepted Answer

To link enterprise risk management with an organization's strategy-setting process and performance.

Answer

To provide a certifiable standard for risk management practices that is applicable globally.

Answer

To focus primarily on internal financial controls to prevent fraudulent reporting.

Answer

To position risk management as an isolated exercise for compliance and auditing purposes.

Question 6

A technology startup is developing its first ERM framework. The leadership team prioritizes an agile and adaptable approach that can be tailored to their rapidly changing business context. They want a set of principles and guidelines rather than a prescriptive, control-based system. Based on these priorities, which framework is the most logical starting point?

Accepted Answer

ISO 31000:2018

Answer

COSO Internal Control—Integrated Framework

Answer

Sarbanes-Oxley Act (SOX)

Answer

Basel III