Arm 54 Ch 2

Front 1

The main difference between the COSO RM standard and the ISO 31000 standard is:

Back 1

They define risk differently

Front 2

RM standards share some common characteristics. List three.

Back 2

1) Adoption of an enterprise approach

2) Monitored treatment plans

3) Understanding of and accountability for defining risk appetite

Front 3

In order for the RM process to be implemented successfully, the standard should be selected based upon several important criteria. One of these is the concept of risk governance. What does risk governance mean in the context of a RM standard?

Back 3

Integration of the management principles governing the organization into the RM process.

(Governance = Integration)

Front 4

What is the purpose of the Risk Maturity Model (RMM) developed by RIMS?

Back 4

To be used as a tool to provide periodic self-assessments using a consistent measuring tool containing best practices.

(Risk Maturity Model = Tool)

Front 5

What are three essential attributes of the RMM model?

Back 5

1) An ERM based approach

2) Root cause discipline

3) Performance management

Front 6

In ISO 31000, the RM framework performs what function?

Back 6

Provides a structure by which to integrate the RM process into the organization

Front 7

After establishing the context, the ISO 31000 Process calls for what sequence of actions regarding risk, continually subject to communication and monitoring/review?

Back 7

1) Identification

2) Analysis

3) Evaluation

4) Treatment

(IAET)

Front 8

In ISO 31000, the process steps of identification, analysis, and evaluation fall under the general concept of:

Back 8

Risk Assessment

Front 9

Reference standards, measures, or expectations used in judging the significance of a given risk in context with strategic goals are known as:

Back 9

Risk Criteria

Front 10

In the risk assessment step, upon identifying risks, they need to be categorized in terms of what?

Back 10

Their impact on organization objectives

Front 11

COSO enterprise RM differs from other RM standards in that it does not address which issue?

Back 11

Root cause analysis

Front 12

The origin of the COSO standards is in which type of risk?

Back 12

Financial

Front 13

The COSO Framework is designed to help an organization achieve its objectives in which categories?

Back 13

1) Strategic

2) Reporting

3) Compliance

NOT Hazard

Front 14

What term refers to the amount of risk an organization bears before any actions are taken to alter it?

Back 14

Inherent risk

Front 15

The COSO Framework consists of eight interrelated components. Which of those deals with, among other issues, whether a risk is a negative risk or an opportunity risk?

Back 15

Event indentification

Front 16

Control activities in the COSO standard consist of two parts. The first is developing the policy that states what should be done. What is the second part?

Back 16

Creating the procedure to accomplish the policy

Front 17

What is risk-based capital?

Back 17

The amount of capital an insurer needs to support its operations given its risk characteristics

Front 18

Basel II and III apply to what type of industry?

Back 18

Banking

Front 19

Solvency II contains three supporting pillars. What are they?

Back 19

1) Financial requirements including adequate capitalization

2) High standards of RM and organizational governance

3) High levels of transparency for supervisors and the public

NOT underwriting standards that avoid adverse selection

Front 20

Basel II is a comprehensive set of reform measures to strengthen the regulation, supervision, and RM of the banking sector. What are its goals?

Back 20

1) Improve the banking sector's ability to absorb shocks from financial and economic stress

2) Improve RM governance

3) Strengthen banks' transparency and disclosure

Front 21

According to The Basel Committee, what is the fifth process of RM?

Back 21

Ensuring that an effective capital planning and monitoring program is in place