CIMA Enterprise Risk Management

Question 1

According to CIMA, which of the following best describes 'enterprise risk management' (ERM)?

Accepted Answer

A comprehensive framework for identifying, assessing, and managing all risks across an organization

Answer

A process applied only to financial risks

Answer

An insurance strategy for catastrophic business events

Answer

A regulatory compliance checklist for listed companies

Question 2

In risk management, what does a 'risk register' contain?

Accepted Answer

A record of identified risks, their likelihood, potential impact, and control measures

Answer

A list of insurance policies held by the company

Answer

A log of past risk events and their financial impact

Answer

A schedule of compliance and regulatory filings

Question 3

Which term describes the level of risk an organization is willing to accept in pursuit of its objectives?

Accepted Answer

Risk appetite

Answer

Risk capacity

Answer

Risk tolerance

Answer

Residual risk

Question 4

What is 'residual risk'?

Accepted Answer

The risk that remains after controls and mitigation measures have been applied

Answer

The total risk before any controls are applied

Answer

The risk transferred to a third party through insurance

Answer

The risk identified but not yet acted upon

Question 5

Which risk response involves an organization choosing not to pursue an activity because the risk is unacceptable?

Accepted Answer

Risk avoidance

Answer

Risk reduction

Answer

Risk transfer

Answer

Risk retention

Question 6

In a risk heat map (risk matrix), risks are typically plotted on two dimensions. What are these dimensions?

Accepted Answer

Likelihood and impact

Answer

Cost and time

Answer

Severity and frequency

Answer

Controllability and visibility