Risk Management Framework Principles Flashcards
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Read the first 7 Risk Management Framework Principles flashcards as text
Under ISO 31000, which framework component is at the center and drives all other components?
Answer: Leadership and commitment
ISO 31000 places leadership and commitment at the core of the framework, supporting integration, design, implementation, evaluation, and improvement.
A company's risk management policy was written five years ago and has never been reviewed despite major market changes. Which ISO 31000 principle is most clearly being violated?
Answer: Dynamic
The dynamic principle requires risk management to anticipate, detect, and respond to changes in the internal and external context.
In ISO 31000, which three activities together make up risk assessment?
Answer: Identification, analysis, and evaluation
ISO 31000 defines risk assessment as the overall process of risk identification, risk analysis, and risk evaluation.
Which of the following best describes the purpose of establishing risk criteria?
Answer: To define the terms of reference against which the significance of risk is evaluated
Risk criteria set the benchmarks for judging whether a risk is acceptable or needs treatment.
An organization adapts its risk framework to fit its size, culture, and objectives rather than copying a competitor's model. Which ISO 31000 principle does this reflect?
Answer: Customized
The customized principle states the framework and process should be tailored to the organization's external and internal context and objectives.
Which statement best distinguishes enterprise risk management (ERM) from traditional risk management?
Answer: ERM addresses all risk types across the organization in an integrated, portfolio view
ERM takes an organization-wide, portfolio approach that includes strategic, operational, financial, and hazard risks.
Within the ISO 31000 process, which activity applies at every step rather than as a single stage?
Answer: Communication and consultation
Communication and consultation with stakeholders runs through every step of the risk management process.