CRCM - COMPLIANCE RISK
MANAGEMENT EXAM 2025 QUESTIONS
AND ANSWERS
Mitigation strategies for managing compliance risk - ANS Predictive and detective automated
and manual
Inherent Risk - ANS Risk before controls are applied
Residual Risk - ANS Risk after controls are applied
Risk measurement - ANS Technique for determining whether risks are controlled to a point
within management's tolerance for the risk
Formalized risk assessments - ANS Assessment of inherent risk, residual risk, quantity and
quality of risk, as well as trends and direction
Three lines of defense - ANS 1st line - Business unit level
2nd line - governance oversight
3rd - internal or External audit
Compliance management system - ANS The banks framework to manage regulatory
compliance responsibilities
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,Elements for Mitigating Compliance Risk - ANS 1. Written Program
2. Research and interpret regulations
3. Testing the program and performance
4. Coordination of Regulatory Exams
5. Leadership of Compliance training programs
6. Advising internal partners
Written Compliance Program - ANS A comprehensive document summarizing key
components of the CMS including roles & responsibilities and compliance related P & P
Change Management Process - ANS Process to:
1. Research regulatory questions
2. Rank solutions as low, moderate or high
3. Track regulatory proposals
4. Implement final regulatory rules
Risk Assessment components - ANS 1. Identify risks
2. Measure risk of non-compliance through inherent and residual risks
3. Document controls
4. Monitor risks to ensure appropriate management
5. Report risks
6. Independently evaluate risks
Key Risk Indicators - ANS Changes to:
1. Products and services
2. Systems and automation status
3. P & P
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, 4. Transaction volume & size
5. Personnel issues
6. Management experience
7. Dependences on other departments
8. Size & complexity of the bank's operations
9. Locations of branches & affiliates
Key performance indicators - ANS 1. Fines & penalties
2. Customer complaints
3. Regulatory criticism from regulator or internal or external auditors
4. Contracts & service level agreement violations
Risk ranking - ANS 1. Establish the exposure and likelihood of each identified compliance risk
at the inherent and residual levels
2. Establish a risk map by ranking the risks by their combined exposure and likelihood rankings
Exposure - ANS The extent of potential damage
Likelihood - ANS The probability that an event will occur and the potential damage will take
place
Risk trend - ANS The direction of risk and probable change to risk over the next 12 months
Risk dependencies - ANS Other areas of the bank or other external parties that the business
unit must rely on to control risk
Subprime borrowers - ANS Borrowers with weekend credit histories or reduced repayment
capacity
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 3
MANAGEMENT EXAM 2025 QUESTIONS
AND ANSWERS
Mitigation strategies for managing compliance risk - ANS Predictive and detective automated
and manual
Inherent Risk - ANS Risk before controls are applied
Residual Risk - ANS Risk after controls are applied
Risk measurement - ANS Technique for determining whether risks are controlled to a point
within management's tolerance for the risk
Formalized risk assessments - ANS Assessment of inherent risk, residual risk, quantity and
quality of risk, as well as trends and direction
Three lines of defense - ANS 1st line - Business unit level
2nd line - governance oversight
3rd - internal or External audit
Compliance management system - ANS The banks framework to manage regulatory
compliance responsibilities
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 1
,Elements for Mitigating Compliance Risk - ANS 1. Written Program
2. Research and interpret regulations
3. Testing the program and performance
4. Coordination of Regulatory Exams
5. Leadership of Compliance training programs
6. Advising internal partners
Written Compliance Program - ANS A comprehensive document summarizing key
components of the CMS including roles & responsibilities and compliance related P & P
Change Management Process - ANS Process to:
1. Research regulatory questions
2. Rank solutions as low, moderate or high
3. Track regulatory proposals
4. Implement final regulatory rules
Risk Assessment components - ANS 1. Identify risks
2. Measure risk of non-compliance through inherent and residual risks
3. Document controls
4. Monitor risks to ensure appropriate management
5. Report risks
6. Independently evaluate risks
Key Risk Indicators - ANS Changes to:
1. Products and services
2. Systems and automation status
3. P & P
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 2
, 4. Transaction volume & size
5. Personnel issues
6. Management experience
7. Dependences on other departments
8. Size & complexity of the bank's operations
9. Locations of branches & affiliates
Key performance indicators - ANS 1. Fines & penalties
2. Customer complaints
3. Regulatory criticism from regulator or internal or external auditors
4. Contracts & service level agreement violations
Risk ranking - ANS 1. Establish the exposure and likelihood of each identified compliance risk
at the inherent and residual levels
2. Establish a risk map by ranking the risks by their combined exposure and likelihood rankings
Exposure - ANS The extent of potential damage
Likelihood - ANS The probability that an event will occur and the potential damage will take
place
Risk trend - ANS The direction of risk and probable change to risk over the next 12 months
Risk dependencies - ANS Other areas of the bank or other external parties that the business
unit must rely on to control risk
Subprime borrowers - ANS Borrowers with weekend credit histories or reduced repayment
capacity
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 3
