Complianceonline Risk Management Quiz

The new definition of risk under ISO 31000 and 31010 is "Probability of an event that will have an impact on objectives." This definition suggests that risk is not just about the possibility of injury, damage, or loss, or the possibility of investment loss, or the probability of loss to an insurer. Instead, it emphasizes that risk is about the likelihood of an event occurring that could affect the achievement of objectives. This definition broadens the understanding of risk to include any event that could potentially impact the desired outcomes or goals.

An internal auditor typically spends most of his time auditing processes. This is because processes are a crucial aspect of any organization's operations and have a significant impact on its overall efficiency and effectiveness. By auditing processes, the internal auditor can identify any weaknesses, inefficiencies, or non-compliance issues that may exist, and make recommendations for improvement. This helps the organization to streamline its operations, reduce risks, and ensure that it is operating in accordance with relevant regulations and standards.

The Australian guidelines for ERM (Enterprise Risk Management) are generally stricter than those in the US. This means that Australian companies are likely to have more stringent requirements and regulations when it comes to managing and mitigating risks within their organizations. This could be due to various factors such as different legal frameworks, industry standards, or cultural attitudes towards risk management. Overall, this suggests that Australian companies may have a higher level of risk management practices compared to their counterparts in the US.

The board's responsibility in relation to good governance of the organization includes providing strategic direction, ensuring objectives are achieved, and ascertaining that risks are managed appropriately. However, quality assurance is not specifically mentioned as one of the responsibilities of the board according to IFAC.

The statement "Disregarding human factors" is incorrect because operations risk management should not ignore or neglect the impact of human factors on the overall risk management process. Human factors, such as human error, behavior, and decision-making, play a significant role in operational risks. Effective operations risk management should consider and address these human factors to minimize the likelihood and impact of risks.

The correct answer is "Capability to proactively identify, assess and address uncertainty and potential obstacles to achieving objectives." This answer aligns with the definition of risk management provided by the OCEG GRC model. Risk management involves the ability to anticipate and mitigate potential risks and uncertainties that may hinder the achievement of organizational objectives. It emphasizes the proactive approach of identifying, assessing, and addressing risks before they become significant obstacles. This capability also includes the implementation of strategies and measures to manage and mitigate risks effectively.

Internal auditors are expected to take a more focused oversight role with respect to risk management control and governance process. They are responsible for evaluating and monitoring the effectiveness of an organization's risk management and control processes. Internal auditors provide independent and objective assessments of the organization's internal controls and help identify areas of improvement. They play a crucial role in ensuring that the organization's risk management practices are in line with industry standards and regulatory requirements.

The given question asks for an exception among the listed causes of risk. The options include health, safety and environment, finance, insurance, and chemical breakdown. The correct answer is "Chemical breakdown" because it does not typically fall under the category of causes of risk. Health, safety and environment, finance, and insurance are commonly recognized as factors that can contribute to risk in various contexts, but chemical breakdown is not typically considered a cause of risk in the same way.

ISO 31000 is a standard issued by ISO for risk management. It can be used by any organization, regardless of its size, activity, or sector. However, it cannot be used for certification purposes. Certification is a separate process that verifies compliance with a specific standard, but ISO 31000 is not intended for certification. Therefore, the statement "It can be used for certification purposes" does not apply to ISO 31000.

ISO Guide 73:2009 provides a basic vocabulary of the definitions of generic terms related to risk management. It does not specifically focus on risk assessment techniques or provide guidelines for risk management and analysis. Therefore, the correct answer is "Provides a basic vocabulary of the definitions of generic terms related to risk management."

The current trend in auditing, risk management, and compliance is for the front office function to provide leading indicators about risk. This means that the front office, which is responsible for generating revenue and managing client relationships, is also taking an active role in identifying and assessing potential risks. By providing leading indicators, the front office can help the organization proactively manage and mitigate risks before they become major issues. This trend reflects a shift towards a more integrated and proactive approach to risk management and compliance.

NFPA 1600 is the correct answer because it is a standard developed by the National Fire Protection Association (NFPA) that provides guidelines for disaster management and emergency management programs. It covers various aspects of preparedness, response, recovery, and mitigation for all types of disasters, including natural disasters, technological emergencies, and terrorist events. NFPA 1600 is widely recognized and used by organizations and government agencies to establish effective emergency management systems and ensure the continuity of operations during and after a disaster.