CRMA-Certified Risk Management
Assurance
Who sets objectives, scope and approach for assurance activity? - Answer-Internal
auditor
Example of Inherent Risk - Answer-A new enterprise/new project
Information gathering methods - Answer-1. Walkthroughs
2. Documentary Analysis
3. Face to face interviews
4. Testing
5. Observation
6. Focus groups
Background information auditors should be familiar with - Answer-1. mission, strategy
and org objectives
2. understand internal and external environment
3. Risk appetite, capacity, tolerance, criteria
4. How the org documents and responds to risk
5. Review on ERM processes reporting
Residual Risk - Answer-The risk remaining after risk treatment
Soft Controls - Answer-less tangible , difficult to change
Hard Controls - Answer-Easily grasped and manipulated
Mckinsey 7s Framework Hard Elements? - Answer-Strategy, Structures, Systems
4 V Model of Ethical Leadership - Answer-Values, Vision, Virtue, Voice
Mckinsey 7s Framework Soft Elements? - Answer-Style, Shared Values, Staff, Skills
Identify the 2 elements of assurance and consulting engagements - Answer-They
should be:
1. Defined in the internal audit charter
2. Delivered by auditors with due care, objectivity and independence
What is the overriding Safeguard? - Answer-Managing risk remains the responsibility of
Management.
, Under no circumstance should the internal auditor take responsibility for risk
management
3 Lines of Defense - Answer-Operational mgt
Risk & Compliance
Internal Audit
Primary Stakeholders(The Board & Sr Mgt) - Answer-To ensure the 3 lines of defense
model is operational and effective
Theory X - Answer-the perspective of the autocratic manager.
- most people dislike work
- most ppl must be controlled and threatened to induce them too make an adequate
effort to acheive org. objectives
- most ppl want to be directed, lack ambition, and primarily seek security.
Process of developing appropriate KRI begins with identification of ? - Answer-Stress
points
ERM Assurance engagements should consider - Answer-1. Identification and
assessment of inherent and residual risks
2. Establishment of mitigating controls, contingency plans and monitoring activities
4. Maintenance of risk registers
5. Completion of risk documentation
Theory Y - Answer-he permissive mgr assumes the following:
- physical and mental effort in work is as natural as recreation or rest.
- control and threats are not the only means of motivating individuals to make an
adequate effort to achieve org. objectives.
- commitment to objectives is proportional to the rewards of accomplishment.
- most ppl can learn to seek responsibility.
- the human ability to use imagination and creativity to solve problems is common.
- in modern industrial life, the intellectual ability of most ppl is not fully realized.
Private Sector - Answer-Organizations owned privately primarily for profit.
Public Sector - Answer-Organizations held by the state for public service
Keys to effective gov. include: - Answer-Integrity, transparency, and accountability
Internal gov mechanisms include: - Answer-a gov body, balance of power, risk mgt,
internal auditing, and rewards and remuneration
Documentation is necessary to foster transparency and support effective decision-
making. T/F - Answer-True
Assurance
Who sets objectives, scope and approach for assurance activity? - Answer-Internal
auditor
Example of Inherent Risk - Answer-A new enterprise/new project
Information gathering methods - Answer-1. Walkthroughs
2. Documentary Analysis
3. Face to face interviews
4. Testing
5. Observation
6. Focus groups
Background information auditors should be familiar with - Answer-1. mission, strategy
and org objectives
2. understand internal and external environment
3. Risk appetite, capacity, tolerance, criteria
4. How the org documents and responds to risk
5. Review on ERM processes reporting
Residual Risk - Answer-The risk remaining after risk treatment
Soft Controls - Answer-less tangible , difficult to change
Hard Controls - Answer-Easily grasped and manipulated
Mckinsey 7s Framework Hard Elements? - Answer-Strategy, Structures, Systems
4 V Model of Ethical Leadership - Answer-Values, Vision, Virtue, Voice
Mckinsey 7s Framework Soft Elements? - Answer-Style, Shared Values, Staff, Skills
Identify the 2 elements of assurance and consulting engagements - Answer-They
should be:
1. Defined in the internal audit charter
2. Delivered by auditors with due care, objectivity and independence
What is the overriding Safeguard? - Answer-Managing risk remains the responsibility of
Management.
, Under no circumstance should the internal auditor take responsibility for risk
management
3 Lines of Defense - Answer-Operational mgt
Risk & Compliance
Internal Audit
Primary Stakeholders(The Board & Sr Mgt) - Answer-To ensure the 3 lines of defense
model is operational and effective
Theory X - Answer-the perspective of the autocratic manager.
- most people dislike work
- most ppl must be controlled and threatened to induce them too make an adequate
effort to acheive org. objectives
- most ppl want to be directed, lack ambition, and primarily seek security.
Process of developing appropriate KRI begins with identification of ? - Answer-Stress
points
ERM Assurance engagements should consider - Answer-1. Identification and
assessment of inherent and residual risks
2. Establishment of mitigating controls, contingency plans and monitoring activities
4. Maintenance of risk registers
5. Completion of risk documentation
Theory Y - Answer-he permissive mgr assumes the following:
- physical and mental effort in work is as natural as recreation or rest.
- control and threats are not the only means of motivating individuals to make an
adequate effort to achieve org. objectives.
- commitment to objectives is proportional to the rewards of accomplishment.
- most ppl can learn to seek responsibility.
- the human ability to use imagination and creativity to solve problems is common.
- in modern industrial life, the intellectual ability of most ppl is not fully realized.
Private Sector - Answer-Organizations owned privately primarily for profit.
Public Sector - Answer-Organizations held by the state for public service
Keys to effective gov. include: - Answer-Integrity, transparency, and accountability
Internal gov mechanisms include: - Answer-a gov body, balance of power, risk mgt,
internal auditing, and rewards and remuneration
Documentation is necessary to foster transparency and support effective decision-
making. T/F - Answer-True
