QUESTION: 125

Which of the following role carriers are responsible for setting up the risk governance process, establishing and maintaining a common risk view, making risk-aware business decisions, and setting the enterprise's risk culture?
Each correct answer represents a complete solution. Choose two.

Senior management
Chief financial officer (CFO)
Human resources (HR)
Board of directors

Answer(s): A,D

Explanation:

The board of directors and senior management has the responsibility to set up the risk governance process, establish and maintain a common risk view, make risk-aware business decisions, and set the enterprise's risk culture.

Incorrect Answers:
B: CFO is the most senior official 0f the enterprise who is accountable for financial planning, record keeping, investor relations and financial risks. CFO is not responsible for responsible for setting up the risk governance process, establishing and maintaining a common risk view, making risk-aware business decisions, and setting the enterprise's risk culture.

C: Human resource is the most senior official of an enterprise who is accountable for planning and policies with respect to all human resources in that enterprise. HR is not responsible for risk related activities.

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QUESTION: 126

You are working in an enterprise. You project deals with important files that are stored on the computer. You have identified the risk of the failure of operations. To address this risk of failure, you have guided the system administrator sign off on the daily backup. This scenario is an example of which of the following?

Risk avoidance
Risk transference
Risk acceptance
Risk mitigation

Answer(s): D

Explanation:

Mitigation is the strategy that provides for the definition and implementation of controls to address the risk described. Here in this scenario, you are trying to reduce the risk of operation failure by guiding administrator to take daily backup, hence it is risk mitigation.

Risk mitigation attempts to reduce the probability of a risk event and its impacts to an acceptable level. Risk mitigation can utilize various forms of control carefully integrated together. The main control types are:
Managerial(e.g.,policies)
Technical (e.g., tools such as firewalls and intrusion detection systems) Operational (e.g., procedures, separation of duties)
Preparedness activities

Incorrect Answers:
A: The scenario does not describe risk avoidance. Avoidance is a strategy that provides for not implementing certain activities or processes that would incur risk.

B: The scenario does not describe the sharing of risk. Transference is the strategy that provides for sharing risk with partners or taking insurance coverage.

C: The scenario does not describe risk acceptance, Acceptance is a strategy that provides for formal acknowledgment of the existence of a risk and the monitoring of that risk.

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QUESTION: 127

Risks to an organization's image are referred to as what kind of risk?

Operational
Financial
Information
Strategic

Answer(s): D

Explanation:

Strategic risks are those risks which have potential outcome of not fulfilling on strategic objectives of the organization as planned. Since the strategic objective will shape and impact the entire organization, the risk of not meeting that objective can impose a great threat on the organization.

Strategic risks can be broken down into external and internal risks:
External risks are those circumstances from outside the enterprise which will have a potentially damaging or helpful impact on the enterprise. These risks include sudden change of economy, industry, or regulatory conditions. Some of the external risks are predictable while others are not. For instance, a recession may be predictable and the enterprise may be able to hedge against the dangers economically; but the total market failure may not as predictable and can be much more devastating.
Internal risks usually focus on the image or reputation of the enterprise. some of the risks that are involved in this are public communication, trust, and strategic agreement from stakeholders and customers.

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QUESTION: 128

Which of the following steps ensure effective communication of the risk analysis results to relevant stakeholders? Each correct answer represents a complete solution. Choose three.

The results should be reported in terms and formats that are useful to support business decisions
Provide decision makers with an understanding of worst-case and most probable scenarios,due diligence exposures and significant reputation, legal or regulatory considerations
Communicate the negative impacts of the events only, it needs more consideration
Communicate the risk-return context clearly

Answer(s): A,B,D

Explanation:

The result of risk analysis process is being communicated to relevant stakeholders. The steps that are involved in communication are:
The results should be reported in terms and formats that are useful to support business decisions. Coordinate additional risk analysis activity as required by decision makers, like report rejection and scope adjustment
Communicate the risk-return context clearly, which include probabilities of loss and/or gain, ranges, and confidence levels (if possible) that enable management to balance risk-return.
Identify the negative impacts of events that drive response decisions as well as positive impacts of events that represent opportunities which should channel back into the strategy and objective setting process.
Provide decision makers with an understanding of worst-case and most probable scenarios, due diligence exposures and significant reputation, legal or regulatory considerations.

Incorrect Answers:
C: Communicate the negative impacts of events that drive response decisions as well as positive impacts of events that represent opportunities which should channel back into the strategy and objective setting process, for effective communication. Only negative impacts are not considered alone.

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QUESTION: 125

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QUESTION: 126

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QUESTION: 127

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QUESTION: 128

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