Strategic Risk and Governance Flashcards
7 cards from real CRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Strategic Risk and Governance flashcards as text
A Certified Risk Architect is asked to embed risk culture into the organization. Which action has the GREATEST long-term impact?
Answer: Ensuring senior leaders visibly model risk-aware decision-making and reward escalation
Culture is shaped primarily by leadership behavior and incentive systems rather than policies or one-time training events.
Enterprise Risk Management (ERM) frameworks like COSO ERM 2017 emphasize integrating risk management with:
Answer: Strategy setting and performance management
COSO ERM 2017 explicitly links risk management to strategy setting and performance to enhance value creation and preservation.
A board committee is reviewing the organization's risk taxonomy. The PRIMARY purpose of a risk taxonomy is to:
Answer: Provide a consistent language and classification system for risk across the enterprise
A risk taxonomy establishes a common vocabulary and category structure that enables consistent identification, aggregation, and reporting across the enterprise.
Horizon scanning in strategic risk governance is used primarily to:
Answer: Identify emerging threats and opportunities before they materialize into significant risks
Horizon scanning is a forward-looking technique that identifies weak signals of emerging risks before they escalate.
Under COSO ERM 2017, which of the following is classified as a component of 'Strategy and Objective-Setting'?
Answer: Business context analysis and risk appetite definition
COSO ERM 2017 places business context analysis and risk appetite definition within the Strategy and Objective-Setting component.
A risk architect is designing a risk reporting framework for the board. Reports should PRIMARILY be:
Answer: Concise, material, forward-looking, and tied to strategic objectives
Board-level risk reports must be concise and strategic, focusing on material risks and forward-looking indicators relevant to decision-making.
When integrating risk management into capital allocation decisions, which approach BEST reflects a risk-adjusted framework?
Answer: Using risk-adjusted return on capital (RAROC) to compare opportunities across different risk levels
RAROC normalizes returns for risk, enabling fair comparison across opportunities with different risk profiles and supporting value-maximizing capital decisions.