Section-D-Questions-Hock-P2-2020-Section-D-Risk-Management.-.pdf

Hock P2 2020
Section D - Risk Management.
Questions
Section D - Risk Management.

Risk Management 37


Risk Management
1. Question ID: HOCK CMA10 P2CRA 19-Adapted (Topic: Risk Management)
Which of the following is not a component of the enterprise risk management
framework as defined by COSO in its 2017 publication, Enterprise Risk Management:
Integrating with Strategy and Performance?

 A. The control environment.
 B. Governance and culture.
 C. Review and revision.
 D. Information, communication, and reporting.

2. Question ID: HOCK CMA10 P2CRA 05 (Topic: Risk Management)
A company has decided to self-insure for its employees' medical insurance. This is an
example of

 A. reducing the risk.
 B. retaining the risk.
 C. transferring the risk.
 D. exploiting the risk.

3. Question ID: HOCK CMA10 P2CRA 11 (Topic: Risk Management)
As defined by Statement on Management Accounting: Enterprise Risk Management:
Frameworks, Elements and Integration, the amount of risk that remains after
management has taken action to mitigate risk is known as

 A. Undiversifiable risk.
 B. Residual risk.
 C. Remaining risk.
 D. Assessed risk.

4. Question ID: ICMA 19.P2.023 (Topic: Risk Management)
When implementing a continuous enterprise risk management process, what step
should an organization take first?

 A. Establish its strategy and objectives.
 B. Monitor and communicate results.

, Hock P2 2020
Section D - Risk Management.
Questions
 C. Establish a risk management budget.
 D. Control previously identified risks.

5. Question ID: ICMA 1603.P2.039 (Topic: Risk Management)
A toothbrush manufacturer has noticed a shift of customer preferences in its growing
Asian sales market towards an electronic battery operated toothbrush from a manual
toothbrush. This shifting of customer tastes best represents what type of risk to the
toothbrush manufacturer?

 A. Business risk.
 B. Strategic risk.
 C. Operational risk.
 D. Financial risk.

6. Question ID: HOCK CMA10 P2CRA 01 (Topic: Risk Management)
A major difference between risk in investing and other types of risk is

 A. risk in investing is operational risk, whereas other types of risk are strategic risks.
 B. risk in investing has the potential for either a positive or negative event, whereas other
types of risk have the potential only for a negative event.
 C. other types of risk can be managed with insurance, whereas it is not possible to
manage risk in investing.
 D. risk in investing has the potential for great losses, whereas other types of risk have the
potential for either great losses or great gains.

7. Question ID: HOCK CMA10 P2CRA 13 (Topic: Risk Management)
Which of the following is not a method for managing operational risks?

 A. Hedging strategies designed to reduce the risk of interest rate fluctuations.
 B. Regularly reviewing personnel.
 C. Having good and functioning internal controls that are well maintained.
 D. Continuous reviewing of business processes.

8. Question ID: HOCK CMA10 P2CRA 17 (Topic: Risk Management)
What is the major difference between traditional risk management and Enterprise Risk
Management (ERM)?

 A. Traditional risk management prepares an organization to respond to specific,
recognized events that could prevent the organization from achieving its objectives. ERM