18 Questions
What is the primary source of external risks?
Competitive environment and economic factors
What is the purpose of assigning an owner or owners to a risk?
To establish clear accountability
What is the primary goal of assessing the impact of a risk?
To evaluate the potential loss or damage resulting from the risk
What is the purpose of evaluating mitigation options?
To recognize the trade-off between cost and benefits
What is the next step after assessing the impact of a risk?
Evaluating mitigation options
What is the purpose of monitoring the results of a mitigation strategy?
To make adjustments as needed
What is the primary goal of a risk management program?
To identify and mitigate potential risks
What type of risk arises from a lack of honesty or integrity?
Moral Hazard
What is the primary focus of internal auditors?
Operating activities and compliance with directives
What is the primary purpose of internal control systems?
To provide reasonable assurance that policies are being followed
What type of risk is associated with natural disasters such as earthquakes and fires?
Physical Risk
What is the primary goal of regulatory compliance?
To ensure conformity with official requirements
What is the primary difference between hazard risk and enterprise risk?
Hazard risk is a component of enterprise risk, which also includes operating, strategic, and financial risks.
What are the two characteristics of risk in the context of enterprise risk?
Variability and Upside of Risk
What is the level of risk that would cause a reduction of current year revenues or earnings that has a substantial impact on operations?
Significant Loss
What is an example of a critical or major loss?
A collapse of a major operating unit or product line, followed by a substantial financial setback
What is the primary focus of enterprise risk?
Operating, strategic, and financial risk
Why do actual results sometimes not match expected results?
Because the world is variable
This quiz covers the different types of risks in a business, including external and internal risks, and how to manage them. It also discusses the importance of assigning ownership and establishing clear accountability.
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