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Questions and Answers
Which of the following categories includes the example of 'Unexpected absence of key associates'?
What type of operational disruption does 'Damage of physical assets' fall under?
In which category would 'Supplier failure' be classified?
Which example aligns with the 'Processes' category of operational disruptions?
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Which of the following is NOT a type of disruption under the People category?
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Which factor is NOT explicitly mentioned as important in risk identification?
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What is the primary purpose of risk identification?
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Which of the following describes 'Compliance Risk'?
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What does continual improvement in risk assessment emphasize?
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Which type of risk includes deliberately sought opportunities?
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Which factor related to risk identification concerns the mindsets or views of individuals involved?
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Which of the following is a key component of risk assessment?
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What aspect does 'Best Available Information' in risk assessment emphasize?
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What is the definition of risk according to the Philippine National Standard?
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Which is NOT one of the aspects involved in risk identification?
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What principle emphasizes the need for risk management to be integrated into all organizational activities?
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How does risk evaluation contribute to risk management?
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Which of the following best describes the term 'risk management'?
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What does the ‘Customized’ principle of risk management entail?
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Which of the following reflects the uncertainty aspect of risk as defined by PNS?
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What is the goal of risk management as outlined in the principles?
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Study Notes
Risk Assessment Framework
- Components of Risk Assessment: Involves risk identification, analysis, and evaluation.
- Risk Identification: Involves finding, recognizing, and describing risk.
- Risk Analysis: Understanding the nature of risk, including its characteristics, sources, consequences, and scenarios.
- Risk Evaluation: Supports risk-based decision making through a factual, science-based approach.
Definition of Risk
- General Definition: Risk is the possibility of negative occurrence, often expressed in sources, events, consequences, and likelihoods.
- Impact on Objectives: Represents the effect of uncertainty on achieving objectives.
Purpose of Risk Management
- Resource Planning: Aims to organize resources effectively to meet specific business goals.
- Value Creation and Protection: Focuses on improving performance, promoting innovation, and achieving global goals.
- Proactive Approach: Serves as a tool to prevent risks and hazards within an organization’s value chain.
Principles of Effective Risk Management (PNS 31000:2018)
- Integrated: Risk management should be an integral part of organizational activities.
- Structured and Comprehensive: Aims to provide consistent and comparable results.
- Customized: Tailored to internal and external contexts aligned with objectives.
- Inclusive: Involves stakeholders appropriately and timely to integrate their insights.
- Dynamic: Must respond effectively to changes in a timely manner.
- Best Available Information: Decisions should be based on relevant, historical, and current information.
- Human and Cultural Factors: Acknowledges the influence of human behavior and culture on risk.
- Continual Improvement: Encourages ongoing enhancement through learning and experience.
Risk Assessment Process
- Systematic and Collaborative: Should be conducted iteratively, leveraging stakeholder knowledge.
- Initiation with Risk Identification: Purpose is to identify, recognize, and describe risks.
Considerations in Risk Identification
- Types of Sources: Includes both tangible and intangible sources of risk.
- Time-Related Factors: Factors that may change over time should be considered.
- Causes and Events: Identify potential threats and opportunities related to risks.
- Vulnerabilities and Capabilities: Assess the strengths and weaknesses within the organization.
- Emerging Risks Indicators: Recognize early signs of potential risks.
- Asset Value: Consider the nature and value of resources affected by risks.
- Consequences: Evaluate the impacts of risks on organizational objectives.
- Knowledge Limitations: Understand the reliability of information and knowledge gaps.
Types of Risks
- Compliance Risk: Related to government mandates, licenses, business permits, and requirements.
- Hazard Risk: Risks that can impede the achievement of an organization’s goals and objectives.
- Opportunity Risk: Risks that organizations may choose to embrace for long-term success.
- Control Risk: Risks associated with the possibility of inadequate controls.
Categories of Operational Disruptions
- People: Lack of skills, manager behavior issues, absence of key associates due to illness or other reasons.
- Premises: Damage to physical assets or contamination issues.
- Processes: Failures in IT, security breaches, mismanagement, and communication failures.
- Products: Quality issues, supplier failures, and logistics problems.
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Description
This quiz explores the framework of risk assessment through its key components: identification, analysis, and evaluation. Participants will deepen their understanding of risk characteristics and the nature of risks involved. Test your knowledge on these essential concepts in risk management.
