SPP Risk Management & Strategic Risk 1

Question 1

What is the primary purpose of enterprise risk management (ERM) in strategic planning?

Accepted Answer

To align risk appetite with strategy and manage risks holistically across the organization

Answer

ERM aligns an organization's risk appetite with its strategy, enabling integrated, holistic risk management across all functions and levels.

Question 2

Which framework is most widely recognized as the global standard for enterprise risk management?

Accepted Answer

COSO ERM Framework

Answer

The COSO ERM Framework (Committee of Sponsoring Organizations) is the globally recognized standard specifically designed for enterprise-wide risk management.

Question 3

What does 'risk appetite' mean in the context of strategic planning?

Accepted Answer

The amount of risk an organization is willing to accept in pursuit of its strategic objectives

Answer

Risk appetite represents the level and type of risk an organization is willing to accept while pursuing its strategic objectives, guiding decision-making at all levels.

Question 4

In a standard risk probability-impact matrix, which risk category demands immediate strategic attention?

Accepted Answer

High likelihood, high impact

Answer

Risks that are both highly likely and highly impactful represent the greatest threat to strategy and must be prioritized for immediate mitigation.

Question 5

How is 'strategic risk' distinguished from operational risk?

Accepted Answer

Strategic risks threaten the organization's ability to achieve its long-term goals and execute its strategy

Answer

Strategic risks are those that threaten the organization's capacity to execute its strategy and achieve long-term objectives, operating at a higher level than operational risks.

(SPP) Strategic Planning Professional Practice Test

(SPP) Strategic Planning Professional Practice Test

SPP Risk Management & Strategic Risk 1