ORM

Review 58 ORM practice questions with answer explanations and community insights.

Question 1

ISO 27000 relates to what topic / area?

  1. Environmental, social, and governance (ESG) investing
  2. Information Security Systems
  3. International Risk Management
  4. Auditing of financial controls

Question 2

What are the roles of business versus risk management in developing and implementing risk assessments?

  1. Risk management, in its role as second line of defense, performs the risk assessment process from beginning to end. There is no business line involvement.
  2. The business owns the risk assessment process, while risk management develops the framework, helps facilitate the process, and provides supervision and oversight.
  3. Business owns the risk assessment process so risk management does not play a role in the process.
  4. Business management’s role in the risk assessment process should be confined to oversight.

Question 3

For the TSB case, what was the cause of the outage at the heart of the case?

  1. A liquidity squeeze by a major hedge-fund via margin calls on trading positions resulted in the collapse of their website.
  2. Sub-standard risk pricing and risk management left millions of people locked out of their accounts for weeks.
  3. A failed attempt to move customers to a new IT system left millions of people locked out of their accounts for weeks.
  4. Their IT models did not work if prices were discontinuous.

Question 4

When a control is found to be ineffective, which of the following steps should be taken next?

  1. Risks should be re-assessed to determine if there is the appropriate level of control assessment.
  2. An action plan should be designed to close the gap.
  3. The controls should be re-assessed during the next cycle to determine if they are still ineffective.
  4. Risks should be re-assessed to determine if there can be an exception for the level of control assessment.

Question 5

Compliance departments traditionally provide policy, oversight, and set the standards for monitoring personal dealing.Which control below would assist in implementing such policies?

  1. A list of approved suppliers that have been added to the outsourcing policy.
  2. Outsourcing of the policy writing to an accounting firm at least once every 5 years.
  3. Watch lists of stocks that are not allowed to be traded for a period of time, for instance, ahead of a securities offering that the firm is managing.
  4. Outsourcing of the policy writing to an accounting firm at least once every 3 years.
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