CRA Strategic Risk and Governance 2

Question 1

A board's Risk Appetite Statement (RAS) sets a tolerance of 2% annual revenue loss from operational failures. When a cyber breach causes 1.8% loss, the BEST governance response is to:

Accepted Answer

Escalate to the board because proximity to the limit signals control weakness

Answer

Near-miss breaches signal that controls may be inadequate even when technically within appetite, requiring board-level review.

Question 2

Which governance structure BEST supports an integrated risk architecture across business silos in a large financial institution?

Accepted Answer

A Risk Management Committee with cross-functional representation reporting to the board

Answer

A cross-functional Risk Management Committee with board-level reporting enables enterprise-wide visibility while preserving business ownership.

Question 3

Under the Three Lines of Defense model, internal audit's PRIMARY role in strategic risk governance is to:

Accepted Answer

Provide independent assurance that governance and risk processes are effective

Answer

Internal audit (third line) provides independent assurance rather than owning or designing controls.

Question 4

A company's strategic plan projects entry into an emerging market. The risk architecture process should FIRST:

Accepted Answer

Perform a risk identification and materiality assessment for the market-entry strategy

Answer

Risk identification and materiality assessment must precede strategic commitments so that risk-informed decisions can be made.

Question 5

Concentration risk in a strategic context refers to:

Accepted Answer

Over-reliance on a single revenue source, customer, supplier, or geography

Answer

Concentration risk arises when excessive exposure to a single factor amplifies potential losses if that factor deteriorates.

(CRA) Certified Risk Architect Practice Test

(CRA) Certified Risk Architect Practice Test

CRA Strategic Risk and Governance 2