CRMA Risk Management Governance 2

Question 1

In the Three Lines of Defense model, which group is primarily responsible for owning and managing risks on a day-to-day basis?

Accepted Answer

Business unit management

Answer

Internal audit

Answer

Risk and compliance functions

Answer

The board of directors

Question 2

Which governance body holds ultimate accountability for ensuring an effective enterprise risk management framework exists?

Accepted Answer

Board of Directors

Answer

Chief Risk Officer

Answer

Risk Management Committee

Answer

Internal Audit Committee

Question 3

When a company separates the Risk Committee from the Audit Committee, what is the primary governance benefit?

Accepted Answer

It allows deeper focus on risk strategy versus financial reporting oversight

Answer

It reduces the total number of board meetings required

Answer

It transfers risk ownership from management to the board

Answer

It ensures the CFO chairs both committees independently

Question 4

What is the most appropriate reporting line for a Chief Risk Officer (CRO) to maintain risk governance independence?

Accepted Answer

Chief Executive Officer or Board Risk Committee

Answer

Chief Financial Officer

Answer

Chief Operating Officer

Answer

Chief Compliance Officer

Question 5

Under the Three Lines of Defense model, the second line's primary governance role is to:

Accepted Answer

Oversee, challenge, and support first-line risk management activities

Answer

Execute transactions and control day-to-day operations

Answer

Provide independent assurance to the board on risk management effectiveness

Answer

Approve the annual risk appetite statement

Question 6

Which document formally establishes the authority, responsibilities, and composition of a board-level Risk Committee?

Accepted Answer

Committee Charter

Answer

Risk Register

Answer

Risk Appetite Statement

Answer

Enterprise Risk Policy

Question 7

A risk governance failure most commonly occurs when:

Accepted Answer

Risk ownership is unclear and accountability is not assigned to specific roles

Answer

The board requires quarterly risk reports instead of annual ones

Answer

Internal audit conducts risk assessments alongside management

Answer

The CRO has a smaller team than the CFO