Podcast
Questions and Answers
What is the primary objective of the Identify Risks component of the SIRA?
What is the primary objective of the Identify Risks component of the SIRA?
- To assess the likelihood and impact of identified risks
- To recognize all possible integrity risks that an organization may face (correct)
- To develop policies and procedures to mitigate identified risks
- To implement controls and procedures to manage identified risks
What is the purpose of assessing risks in the SIRA process?
What is the purpose of assessing risks in the SIRA process?
- To identify all possible integrity risks that an organization may face
- To implement controls and procedures to manage identified risks
- To develop policies and procedures to mitigate identified risks
- To prioritize risks and determine where resources should be directed for mitigation (correct)
What triggers the need for reporting and addressing changes in the SIRA process?
What triggers the need for reporting and addressing changes in the SIRA process?
- Ineffectiveness of controls
- Both A and B (correct)
- Changes in the risk environment
- Implementation of new policies and procedures
Why is conducting a SIRA or similar risk assessment a regulatory requirement for financial institutions in many jurisdictions?
Why is conducting a SIRA or similar risk assessment a regulatory requirement for financial institutions in many jurisdictions?
What is the frequency of the SIRA process?
What is the frequency of the SIRA process?
What is the ultimate goal of the SIRA process?
What is the ultimate goal of the SIRA process?
What is the primary purpose of understanding the business environment in risk management?
What is the primary purpose of understanding the business environment in risk management?
What type of risks are related to non-compliance with laws, rules, and standards?
What type of risks are related to non-compliance with laws, rules, and standards?
What is the purpose of brainstorming sessions in risk management?
What is the purpose of brainstorming sessions in risk management?
What is the purpose of a risk matrix in risk assessment?
What is the purpose of a risk matrix in risk assessment?
What is the primary consideration when prioritizing risks in risk assessment?
What is the primary consideration when prioritizing risks in risk assessment?
What is the primary purpose of documenting and classifying risks?
What is the primary purpose of documenting and classifying risks?
What is the primary benefit of using a dynamic risk assessment process?
What is the primary benefit of using a dynamic risk assessment process?
What is the primary purpose of feedback from employees, customers, and stakeholders in risk assessment?
What is the primary purpose of feedback from employees, customers, and stakeholders in risk assessment?
What is the primary reason for considering the specific context of the organization in risk assessment?
What is the primary reason for considering the specific context of the organization in risk assessment?
What is the primary purpose of documenting findings, decisions, and actions in risk assessment?
What is the primary purpose of documenting findings, decisions, and actions in risk assessment?
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Study Notes
SIRA Overview
- SIRA consists of four parts: Identify Risks, Assess Risks, Implement Controls and Procedures, and Monitoring and Reporting
- SIRA is an ongoing process to ensure an organization stays abreast of new and emerging risks and complies with changing laws and regulations
Identify Risks
- Recognize all possible integrity risks an organization may face, including money laundering, terrorist financing, corruption, fraud, and market abuse
- Understand the business environment internally (processes, products, services, systems, employees, customers, and partners) and externally (market, competition, regulatory environment, and potential threats)
- Map risk areas, including financial risks (credit risk, market risk, liquidity risk), operational risks (system failures, process failures, human error, fraud), compliance and regulatory risks, reputational risks, and strategic risks
- Use various tools and techniques, such as brainstorming sessions, interviews, surveys, data analysis, and developing risk indicators
Risk Assessment
- Assess risks to understand how identified risks may affect the organization and determine which risks to prioritize in the mitigation process
- Quantify each risk by determining its probability of occurrence and potential impact (financial, reputational, operational efficiency, etc.)
- Use tools like risk matrices to position risks according to likelihood and impact, revealing high-priority risks
- Prioritize risks based on probability, impact, cost, and effort to manage the risk, considering the organization's context, goals, capabilities, resources, and risk tolerance
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