16 Questions
The SIRA process consists of five parts: Identify Risks, Assess Risks, Implement Controls and Procedures, Monitoring, and Auditing.
False
The Identify Risks stage of SIRA involves assessing the likelihood and impact of risks.
False
The SIRA process is a one-time exercise that ensures an organization is compliant with regulatory requirements.
False
Conducting a SIRA or similar risk assessment is optional for financial institutions in most jurisdictions.
False
The SIRA process is primarily focused on identifying and mitigating financial risks.
False
The Monitoring stage of SIRA involves implementing policies, procedures, and controls to manage and mitigate identified risks.
False
Identifying and mapping risk areas is the first step in the risk management process.
False
Brainstorming sessions with teams from different departments provide a narrow range of perspectives.
False
Reputational risks are not critical in the risk management process.
False
Data analysis is not used to identify patterns and trends that may indicate risks.
False
Risks are documented, but not classified by type, severity, and urgency.
False
Assessing risks is not a complex process.
False
Probability of occurrence is often expressed as a percentage or frequency in risk assessment.
True
The risk assessment process is static and does not require regular reassessment and updating.
False
Feedback from employees, customers, and other stakeholders is not valuable in the risk assessment process.
False
All findings, decisions, and actions should not be documented and reported to management and relevant stakeholders.
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 process, a risk management framework used to identify, assess, and mitigate integrity risks in organizations. Understand the four stages of SIRA and how it helps prioritize and manage risks such as money laundering and fraud.
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