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11 Cards in this Set

  • Front
  • Back

What are the features of risk management?

Risk management is an integral part of achieving business objectives.

Risk management has the potential to add value to the business.

Risk management reduces the likelihood of suboptimal outcome.

What are the principles underlying ERM?

Every entity, whether for-profit or not-for-profit, exists to realise value for its stakeholders.

Value is created, preserved, or eroded by management decisions in all activities, from setting strategy to operating the enterprise day-to-day.

ERM supports value creation by enabling management to:

Deal effectively with potential future events that create uncertainty.

Respond in a manner that reduces the likelihood of downside outcomes and increases the upside.

According to the ERM framework, how can objectives be categorised?



reliable in terms of reporting

compliant with laws and regulations

ERM provides a coherent framework for managing risks. It has a positive focus on creating value rather than?

a negative concern with eliminating potential hazards.

ERM is implemented by who?

staff at all levels and applies at all levels of decision-making and control, from strategy setting down to detailed management of operations.

ERM consists of what eight inter-related components?

Internal environment

Objective setting

Event identification

Risk assessment

Risk response

Control activities

Information and communication


ERM considers that risk can be managed at what levels of the organistation?

Enterprise or entity level, division or subsidiary level and as a business unit

Risk assessment requires a thorough understanding of the entity and the areas in which it operates. It comprises?

risk identification

risk description

risk estimation

What are some Methods of estimating risk?

Failure mode and effect analysis

Fault tree/event tree analysis

Hazard and operability studies

Cost-benefit and risk-benefit analysis

Root cause analysis

Human reliability analysis

Delphi method


Soft systems analysis

Risk mapping provides a convenient method for discussing and recording risk assessments. It is a potentially useful technique to discuss risks.

How is the map produced?

Impact on one axis and likelyhood on another risk placed agaist this.

A risk register contains as much information as may be considered useful for monitoring purposes. Some of the data to be included in a risk register are

Risk number (unique identifier)

Risk category

Description of risk

Date risk identified

Name of person who identified risk



A monetary value

Interdependencies with other risks

Risk owner