08 Enterprise Risk Management Quiz

What is the fundamental idea behind the ERM approach?

• Managing individual risks separately

• Taking a broader and more integrated approach to risk management

• Ignoring the relationship between risks

• Focusing only on control and hazard risks

What are the three components required in a comprehensive definition of the ERM process?

• Process, outputs, and impact

• Process, inputs, and outputs

• Outputs, impact, and inputs

• Inputs, outputs, and impact

What is the intended impact of ERM?

• Reducing efficiency and service delivery

• Creating shareholder value and enhancing risk reporting

• Increasing uncertainty and risk exposure

• Limiting the allocation of resources to business improvement

What are the principles of risk management set out as for the practice of enterprise risk management?

• Practical, Adaptive, Collaborative, Effective, and Disciplined (PACED)

• Proactive, Analytical, Controlled, Efficient, and Determined (PACED)

• Productive, Ambitious, Creative, Energetic, and Diligent (PACED)

• Proportionate, Aligned, Comprehensive, Embedded, and Dynamic (PACED)

What is the relationship between enterprise risk management (ERM) and business continuity management (BCM)?

• ERM and BCM have the same approach and objectives

• They have no relationship

• ERM focuses on managing risks, while BCM focuses on maintaining continuity

• ERM and BCM are completely different concepts

What is the objective of an ERM initiative in the finance sector?

• To decrease shareholder value and efficiency

• To ignore risk-based advantage and exploit areas of high potential adverse impact

• To stabilize results and protect them from disturbances

• To increase uncertainty and risk exposure

What are the two simultaneous mistakes made by many banks that led to the world banking crisis in 2008?

• Ignoring the rewards available and quantifying the level of risk accurately

• Balancing the risks involved and taking a risk-aggressive approach

• Undertaking a balanced view of the risks and quantifying the level of risk accurately

• Making decisions based on the rewards available and ignoring the risks involved

What are the future developments in ERM practice likely to focus on?

• Ensuring risk management activities are not embedded in the organization's core business processes

• Demonstrating measurable financial benefits of not implementing an enterprise risk management initiative

• Ensuring risk management activities are fully embedded in the organization's core business processes

• Demonstrating measurable financial benefits of implementing an enterprise risk management initiative

What is the ISO 22300 standards related to?

• Business continuity, crisis management, and broader requirements for society's general resilience and organizations

• The failure of risk management in banks

• Risk management in the energy sector

• Operational risk management in financial institutions

What must enterprise risk management demonstrate in order to be considered successful?

• Increased profit in private-sector organizations and decreased efficiency in the public sector

• Increased profit in private-sector organizations and enhanced efficiency in the public sector

• Enhanced efficiency and value-for-money delivery of services in the public sector

• Decreased profit in private-sector organizations and increased efficiency in the public sector