CRA Risk Mitigation Strategies & Controls 1

Question 1

What is the first step in mitigating a risk?

Accepted Answer

Identifying the risk and evaluating its impact and likelihood

Answer

The first step in mitigating a risk is to thoroughly understand it. This involves identifying the specific risk and then evaluating its potential impact and the likelihood of it occurring. This initial assessment provides the necessary information to determine the severity of the risk and to decide on the most appropriate and effective mitigation strategies.

Question 2

What is a common risk mitigation strategy?

Accepted Answer

Transferring the risk to a third party

Answer

Risk transfer is a common mitigation strategy where the potential financial or operational burden of a risk is shifted to another entity. This is often achieved through mechanisms like purchasing insurance, where an insurer assumes the financial risk, or by outsourcing certain activities to a third party who then takes on associated risks. This strategy helps reduce the organization's direct exposure to specific threats.

Question 3

Why is it important to continuously monitor risks?

Accepted Answer

To identify new risks and evaluate mitigation strategies

Answer

Continuous monitoring is essential because the risk landscape is constantly evolving, with new threats emerging and existing ones changing. This ongoing process allows organizations to identify these new risks promptly and to evaluate whether their current mitigation strategies are still effective. It ensures that the risk management plan remains adaptive and robust against dynamic challenges.

Question 4

What is risk transfer?

Accepted Answer

Shifting responsibility to another entity

Answer

Risk transfer is a strategy that involves shifting the responsibility or financial impact of a potential risk to another entity. This is commonly done through insurance policies, where the financial burden of a loss is transferred to an insurer in exchange for premiums. It can also involve contractual agreements where a third party assumes certain risks associated with a project or operation.

Question 5

What is a risk acceptance strategy?

Accepted Answer

Accepting the risk and planning for its consequences

Answer

Risk acceptance is a deliberate decision by an organization to acknowledge a risk and tolerate its potential consequences without implementing specific mitigation actions to reduce its likelihood or impact. This strategy is typically chosen when the cost of mitigation outweighs the potential loss, or when the risk is deemed low. However, it often involves having contingency plans in place to manage the fallout if the risk materializes.

(CRA) Certified Risk Architect Practice Test

(CRA) Certified Risk Architect Practice Test

CRA Risk Mitigation Strategies & Controls 1