FAC Internal Controls & Risk Assessment 1

Question 1

What is the first step in the risk management process for Finance and Accounting Certification?

Accepted Answer

Identifying potential risks and hazards

Answer

Risk identification is the first step, as you must know what risks exist before you can assess and manage them.

Question 2

In Finance and Accounting Certification, what is a risk matrix used for?

Accepted Answer

Evaluating risks based on likelihood and impact

Answer

A risk matrix plots risks on a grid of likelihood versus impact, helping prioritize which risks need the most attention.

Question 3

What does risk mitigation mean in Finance and Accounting Certification practice?

Accepted Answer

Taking steps to reduce the likelihood or impact of identified risks

Answer

Risk mitigation involves implementing strategies to reduce either the probability of a risk occurring or its potential impact.

Question 4

Which risk response strategy involves transferring risk to a third party in Finance and Accounting Certification?

Accepted Answer

Transfer (e.g., insurance)

Answer

Risk transfer shifts the financial or operational impact of a risk to another party, commonly through insurance or contracts.

Question 5

What is a risk register in Finance and Accounting Certification practice?

Accepted Answer

A documented list of identified risks with their analysis and response plans

Answer

A risk register is a document that records all identified risks, their assessment, and planned responses for tracking and management.

(FAC) Finance and Accounting Certification Practice Test