CRMA Knowledge 2

Question 1

The COSO ERM 2017 framework organizes its components into how many categories?

Accepted Answer

Five

Answer

COSO ERM 2017 organizes its 20 principles into five interrelated components: Governance and Culture, Strategy and Objective-Setting, Performance, Review and Revision, and Information, Communication, and Reporting.

Question 2

Which statement best distinguishes risk appetite from risk tolerance?

Accepted Answer

Risk appetite is the broad amount of risk accepted in pursuit of objectives; risk tolerance is the acceptable variation around those objectives.

Answer

Risk appetite expresses the overall amount of risk an organization is willing to accept, while risk tolerance defines the acceptable deviation from that appetite for specific objectives.

Question 3

ISO 31000:2018 defines risk as:

Accepted Answer

The effect of uncertainty on objectives.

Answer

ISO 31000:2018 defines risk as 'the effect of uncertainty on objectives,' recognizing that effects can be positive or negative.

Question 4

Which body holds primary responsibility for risk oversight in a well-governed organization?

Accepted Answer

Board of Directors

Answer

The Board of Directors holds ultimate accountability for risk oversight, setting risk appetite and ensuring management has appropriate ERM processes in place.

Question 5

Inherent risk differs from residual risk in that inherent risk is measured:

Accepted Answer

Before any controls or mitigating actions are applied.

Answer

Inherent risk is the level of risk that exists before any controls are applied, while residual risk is what remains after controls are in place.

(CRMA) Certification in Risk Management Assurance Practice Test

(CRMA) Certification in Risk Management Assurance Practice Test

CRMA Knowledge 2