GRC Principles and Models 5

Question 1

Which governance concept describes the board's responsibility to ensure the organization acts in the long-term interests of shareholders and other stakeholders?

Accepted Answer

Agency theory

Answer

Agency theory addresses the relationship between principals (shareholders) and agents (management), and the board's role in aligning these interests.

Question 2

Under ISO 31000:2018, what is the correct sequence of the risk management process?

Accepted Answer

Identify, Analyze, Evaluate, Treat

Answer

ISO 31000 defines the risk management process as: communication and consultation, scope/context/criteria, risk assessment (identify, analyze, evaluate), risk treatment, and monitoring/review.

Question 3

Which term describes the scenario where an organization decides to accept a risk because the cost of mitigation exceeds the potential loss?

Accepted Answer

Risk acceptance

Answer

Risk acceptance (or retention) is a deliberate decision to tolerate a risk when the cost-benefit analysis shows mitigation is not economically justified.

Question 4

The principle of 'tone at the top' in GRC governance refers to:

Accepted Answer

Leadership's visible commitment to ethics, compliance, and risk culture

Answer

Tone at the top reflects how senior leaders' attitudes and behaviors toward ethics and compliance set the cultural standard for the entire organization.

Question 5

In GRC, a 'control objective' is best defined as:

Accepted Answer

A statement of the desired result or purpose to be achieved by implementing controls

Answer

A control objective states the goal that a control is designed to achieve, providing the basis for designing and evaluating the control.

(GRC) Governance, Risk, and Compliance Certification Practice Test

(GRC) Governance, Risk, and Compliance Certification Practice Test

GRC Principles and Models 5