(CRMA Exam) Certification in Risk Management
Assurance Part 1 of 2 – Questions & A+ Solutions
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Terms in this set (100)
Which of the following are Solution: B, D, and E
appropriate goals of risk
management? Select all that apply.
A. To eliminate uncertainty.
B. To facilitate greater operational
effectiveness and efficiency.
C. To limit risk-taking as much as
possible.
D. To support the attainment of
organizational objectives.
E. To facilitate well-informed decision-
making.
F. To guarantee outcomes from
activities.
Which of the following BEST Solution: A
describes risk culture? Select one.
A. The system present throughout an
organization of shared values and
beliefs about risk that shapes
attitudes, behaviors, and decisions.
B. The leadership of and commitment
to risk management from the highest
levels of an organization.
C. The level of authority and trust
awarded to managers to determine
the level of risk they are prepared to
take.
D. The policies and processes that
define risk ownership, responsibilities,
and reporting requirements.
,Which of the following describes the Solution: B
highest level of risk management
maturity (commonly referred to as
“risk-enabled”)? Select one.
A. When a risk strategy and policies
are in place and communicated.
B. When risk management and internal
control are fully embedded into
operations.
C. When the organization establishes
a risk committee, risk management
team, and risk processes.
D. When risk appetite has been
defined.
The definition of risk taken from the Solution: A, B, C, and D
IPPF glossary is as follows: “The
possibility of an event occurring that
will have an impact on the
achievement of objectives.” Suppose
an organization has the following
objective: To sell 1,000 units at $10
each. Which of the following may be
described as a risk for the
organization? Select all that apply.
A. A downturn in the economy may
reduce demand by 10%.
B. Overseas demand may exceed
expectation and a total of 1,100 units
are sold.
C. A competitor may offer a similar
product at a lower price and attract
customers away.
D. Foreign exchange rates may make
the product cheaper for customers
overseas, stimulating additional sales.
E. A new method of production may
become available.
F. Climate change occurs less quickly
than expected.
,Which of the following provides the Solution: B
BEST definition of residual risk?
Select one.
A. The risk that a material error exists
in the financial statements after audit.
B. The portion of inherent risk that
remains after management executes
its risk responses.
C. The risk that an audit may fail to
detect a control deficiency.
D. Risk severity prior to
implementation of risk responses.
E. A risk that cannot be mitigated.
F. The amount of impact that can be
eliminated by preventative measures.
A code of ethical behavior and Solution: A
statement of organizational values
are risk responses to the possibility
individuals may act in such a way as
to cause damage to the organization.
Which of the following statements
about these responses are true?
Select one.
A. They are preventative measures
designed to reduce likelihood.
B. They are preventative measures
designed to reduce impact.
C. They are detective measures
designed to alert management to
instances of unethical behavior.
D. They form part of contingency
measures to help repair any damage
that may be incurred as a result of
unethical behavior.
, There are a number of internal and Solution: B
external parties that contribute to the
effectiveness of risk management,
but which one has the primary
responsibility for identifying and
managing risks? Select one.
A. Members of the board.
B. Senior management.
C. Heads of risk, compliance, and
control functions.
D. The chief audit executive (CAE).
E. External auditors.
F. Regulators.
A purchasing manager has Solution: D
subcontracted repairs and
maintenance to a facilities
management company. This is a new
relationship and has been entered
into quickly. Which of the following is
NOT an appropriate control measure
to avoid the risks associated with this
relationship? Select one.
A. A schedule of regular
communication and reporting.
B. Financial penalties for missed
targets and performance failures.
C. Stated objectives and itemized
responsibilities for each party.
D. Identifying an alternative
subcontractor.
Assurance Part 1 of 2 – Questions & A+ Solutions
Save Groups
Terms in this set (100)
Which of the following are Solution: B, D, and E
appropriate goals of risk
management? Select all that apply.
A. To eliminate uncertainty.
B. To facilitate greater operational
effectiveness and efficiency.
C. To limit risk-taking as much as
possible.
D. To support the attainment of
organizational objectives.
E. To facilitate well-informed decision-
making.
F. To guarantee outcomes from
activities.
Which of the following BEST Solution: A
describes risk culture? Select one.
A. The system present throughout an
organization of shared values and
beliefs about risk that shapes
attitudes, behaviors, and decisions.
B. The leadership of and commitment
to risk management from the highest
levels of an organization.
C. The level of authority and trust
awarded to managers to determine
the level of risk they are prepared to
take.
D. The policies and processes that
define risk ownership, responsibilities,
and reporting requirements.
,Which of the following describes the Solution: B
highest level of risk management
maturity (commonly referred to as
“risk-enabled”)? Select one.
A. When a risk strategy and policies
are in place and communicated.
B. When risk management and internal
control are fully embedded into
operations.
C. When the organization establishes
a risk committee, risk management
team, and risk processes.
D. When risk appetite has been
defined.
The definition of risk taken from the Solution: A, B, C, and D
IPPF glossary is as follows: “The
possibility of an event occurring that
will have an impact on the
achievement of objectives.” Suppose
an organization has the following
objective: To sell 1,000 units at $10
each. Which of the following may be
described as a risk for the
organization? Select all that apply.
A. A downturn in the economy may
reduce demand by 10%.
B. Overseas demand may exceed
expectation and a total of 1,100 units
are sold.
C. A competitor may offer a similar
product at a lower price and attract
customers away.
D. Foreign exchange rates may make
the product cheaper for customers
overseas, stimulating additional sales.
E. A new method of production may
become available.
F. Climate change occurs less quickly
than expected.
,Which of the following provides the Solution: B
BEST definition of residual risk?
Select one.
A. The risk that a material error exists
in the financial statements after audit.
B. The portion of inherent risk that
remains after management executes
its risk responses.
C. The risk that an audit may fail to
detect a control deficiency.
D. Risk severity prior to
implementation of risk responses.
E. A risk that cannot be mitigated.
F. The amount of impact that can be
eliminated by preventative measures.
A code of ethical behavior and Solution: A
statement of organizational values
are risk responses to the possibility
individuals may act in such a way as
to cause damage to the organization.
Which of the following statements
about these responses are true?
Select one.
A. They are preventative measures
designed to reduce likelihood.
B. They are preventative measures
designed to reduce impact.
C. They are detective measures
designed to alert management to
instances of unethical behavior.
D. They form part of contingency
measures to help repair any damage
that may be incurred as a result of
unethical behavior.
, There are a number of internal and Solution: B
external parties that contribute to the
effectiveness of risk management,
but which one has the primary
responsibility for identifying and
managing risks? Select one.
A. Members of the board.
B. Senior management.
C. Heads of risk, compliance, and
control functions.
D. The chief audit executive (CAE).
E. External auditors.
F. Regulators.
A purchasing manager has Solution: D
subcontracted repairs and
maintenance to a facilities
management company. This is a new
relationship and has been entered
into quickly. Which of the following is
NOT an appropriate control measure
to avoid the risks associated with this
relationship? Select one.
A. A schedule of regular
communication and reporting.
B. Financial penalties for missed
targets and performance failures.
C. Stated objectives and itemized
responsibilities for each party.
D. Identifying an alternative
subcontractor.
