IFRS Risk Assessment and Management

Question 1

What is the first step in the risk management process?

Accepted Answer

Risk identification — recognizing potential threats and opportunities

Answer

Risk identification is the foundation of risk management, involving systematic recognition of potential threats and opportunities.

Question 2

How is risk typically measured?

Accepted Answer

By the probability of occurrence multiplied by the potential impact

Answer

Risk is commonly quantified as probability times impact, helping prioritize which risks need the most attention.

Question 3

What is risk mitigation?

Accepted Answer

Taking actions to reduce the probability or impact of identified risks

Answer

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

Question 4

What is the purpose of a risk register?

Accepted Answer

To document identified risks, their analysis, and planned responses

Answer

A risk register is a living document that captures all identified risks, their assessment, ownership, and response strategies.

Question 5

When should risk assessment be performed during a project?

Accepted Answer

Throughout the entire project lifecycle, not just at the beginning

Answer

Risk assessment should be ongoing throughout the project as new risks can emerge at any stage and existing risks can change.

(IFRS) International Financial Reporting Standards Practice Test