CRA Risk Mitigation Strategies & Controls 3

Question 1

A financial institution segregates duties between employees who authorize payments and those who process them. This primarily mitigates which risk?

Accepted Answer

Fraud and operational risk

Answer

Segregation of duties reduces the opportunity for a single employee to commit and conceal fraud or errors.

Question 2

Which of the following is an example of a detective control in an enterprise risk management context?

Accepted Answer

Audit log review identifying unusual access patterns

Answer

Reviewing audit logs to find anomalies is a detective control because it identifies risk events after they have occurred.

Question 3

A risk architect recommends replacing a manual approval workflow with an automated system to reduce processing errors. This is best classified as:

Accepted Answer

Control automation as risk reduction

Answer

Automating controls reduces the likelihood of human error, directly lowering operational risk exposure.

Question 4

When designing a control environment, which principle ensures that controls address both the likelihood and impact dimensions of risk?

Accepted Answer

Proportionality

Answer

Proportionality means control strength and cost should be commensurate with the severity and likelihood of the risk being mitigated.

Question 5

Which type of risk response involves partnering with another organization to share both the potential gain and loss of a risky venture?

Accepted Answer

Risk sharing

Answer

Risk sharing distributes the risk exposure between parties, with both bearing portions of any resulting losses or gains.

(CRA) Certified Risk Architect Practice Test