16 Questions
The SIRA consists of five parts, Identify Risks, Assess Risks, Implement Controls and Procedures, Monitoring and finally Monitoring and Reporting, and Risk Evaluation.
False
The likelihood of a risk is assessed before it is identified in the SIRA.
False
The SIRA requires ongoing monitoring of risks and the effectiveness of implemented controls.
True
The SIRA is a one-time exercise that ensures an organization's compliance with laws and regulations.
False
Money laundering and terrorist financing are examples of operational risks that an organization may face.
False
Conducting a SIRA is not a regulatory requirement for financial institutions in any jurisdiction.
False
The understanding of the business environment is only necessary internally.
False
Mapping risk areas is the final step in the risk management process.
False
Reputational risks can be ignored in the risk management process.
False
Brainstorming sessions are not necessary in the risk identification process.
False
Risk indicators are used to identify potential risks.
True
The risk matrix is not a commonly used tool in risk assessment.
False
Risks should be prioritized based on their probability of occurrence only.
False
The risk assessment process is a one-time event.
False
Feedback from employees, customers, and other stakeholders is unnecessary in the risk assessment process.
False
Documenting and reporting findings, decisions, and actions is not necessary for transparency and decision-making.
False
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
Learn about the SIRA methodology, a four-part process for managing risks in organizations. Understand how to identify, assess, implement controls, and monitor risks such as money laundering, corruption, and fraud. Test your knowledge on the SIRA methodology and its applications.
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