GRC - Governance, Risk, and Compliance Enterprise Risk Management Frameworks Questions and Answers

Question 1

A global manufacturing company is implementing an Enterprise Risk Management (ERM) framework.
The Chief Risk Officer (CRO) wants to ensure the framework is adaptable to different business units and promotes a proactive risk culture.
Which ERM framework is best known for its flexible, principles-based approach that can be customized to any organization's context?

Accepted Answer

ISO 31000

Answer

NIST Risk Management Framework

Answer

COBIT Framework

Answer

COSO ERM - Integrating with Strategy and Performance

Question 2

A financial services firm is updating its ERM framework to better align with its strategic objectives and performance metrics. The board of directors has emphasized the importance of integrating risk management directly into the strategy-setting process. Which of the following is a key component of the COSO ERM 2017 framework that directly addresses this requirement?

Accepted Answer

Strategy and Objective-Setting

Answer

Risk Assessment

Answer

Control Activities

Answer

Monitoring Activities

Question 3

Which of the following best describes a primary objective of establishing an ERM framework within an organization?

Accepted Answer

To provide a structured and consistent approach for identifying, assessing, and managing risks across the enterprise.

Answer

To completely eliminate all strategic and operational risks.

Answer

To satisfy the requirements of external auditors exclusively.

Answer

To replace the need for internal controls and departmental risk management.

Question 4

A technology company is deciding between the COSO ERM and ISO 31000 frameworks. The company operates globally and has a diverse range of stakeholders. A key difference the GRC team should consider is that:

Accepted Answer

COSO ERM is more prescriptive and detailed, often favored by audit and accounting professionals, while ISO 31000 is a more concise, high-level guideline.

Answer

ISO 31000 results in a formal certification, whereas COSO ERM does not.

Answer

COSO ERM is primarily used in Europe, while ISO 31000 is dominant in North America.

Answer

ISO 31000 focuses solely on financial risks, while COSO ERM covers all risk categories.

Question 5

During a risk committee meeting, a new manager suggests that the company's ERM framework should focus on responding to risks by either avoiding or accepting them. A GRC professional should advise that this view is incomplete because a comprehensive risk response strategy also includes:

Accepted Answer

Reducing and sharing

Answer

Ignoring and delaying

Answer

Transferring and escalating

Answer

Enhancing and exploiting

Question 6

According to the principles of ISO 31000, for risk management to be effective, it must be:

Accepted Answer

Integrated into all of the organization's activities and decision-making processes.

Answer

Managed by a separate, independent risk department.

Answer

A one-time project implemented by external consultants.

Answer

Focused exclusively on downside risks and potential losses.