Operational Risk Management
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Questions and Answers

What type of risk is involved when an employee writes the wrong amount on a check?

  • Strategic risk
  • Hazard risk
  • Operational risk (correct)
  • Financial risk
  • What is an example of a 'process' failure in the scenario described?

  • Lack of employee training
  • Inadequate payment process (correct)
  • Insufficient staff authorization
  • All of the above
  • What is another type of event that can cause operational risk?

  • Power cut (correct)
  • Change in management
  • Employee termination
  • Economic downturn
  • What is the primary benefit of allowing anonymous incident reporting in the risk identification process?

    <p>To increase the likelihood of response from employees who are worried about repercussions from speaking up</p> Signup and view all the answers

    Why is it important to manage operational risks?

    <p>To reduce the likelihood of financial losses</p> Signup and view all the answers

    What is a potential way to mitigate the risk of writing the wrong amount on a check?

    <p>Having a second staff member authorize major payments</p> Signup and view all the answers

    What is the main advantage of seeking employee feedback in the risk identification process?

    <p>To identify risks that may not be considered otherwise</p> Signup and view all the answers

    What is the main advantage of using models or software in the risk identification process?

    <p>To help identify and classify risks</p> Signup and view all the answers

    What is the primary benefit of seeking employee feedback in a group setting?

    <p>To encourage brainstorming and lead to a higher number of identified risks</p> Signup and view all the answers

    What is the primary purpose of analyzing customer complaints in the risk identification process?

    <p>To identify risks associated with processes or issues that customers frequently complain about</p> Signup and view all the answers

    What type of risks can be identified through analyzing customer complaints?

    <p>Reputational risks</p> Signup and view all the answers

    What is a key step in the risk management process when beginning to identify risks?

    <p>Breaking down the big picture into high-level categories</p> Signup and view all the answers

    What is a benefit of asking insightful questions during the risk management process?

    <p>It helps to identify potential risks that may not have been considered</p> Signup and view all the answers

    What is a method of identifying prospective risks in an organization?

    <p>Brainstorming with staff or external stakeholders</p> Signup and view all the answers

    Which of the following is a category of risk that an organization may face?

    <p>Reputational risk</p> Signup and view all the answers

    What is a purpose of flow charting a process in risk management?

    <p>To identify potential risks in a process</p> Signup and view all the answers

    What is a key aspect of risk management in an organization?

    <p>It is a multi-faceted process</p> Signup and view all the answers

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