RSK2601
EXAM PACK
,RSK2601- ENTERPRISE RISK MANAGEMENT
OCTOBER/NOVEMBER 2015
EXAM ANSWERS
SECTION A: MULTIPLE-CHOICE QUESTIONS
Question 1
Answer: 2 — Comprehensive, inclusive and proactive approach to risk
management.
ERM takes a holistic approach by integrating different categories of risk throughout the
organisation rather than managing risks in isolated silos.
Question 2
Answer: 4 — Set out how the risks will be managed and controlled.
A risk-management policy establishes the organisation's approach to managing
identified risks, including responsibilities, accountability, boundaries and reporting.
Question 3
Answer: 1 — The avoidance of unpleasant surprises and losses.
Boards fundamentally want ERM to provide assurance that major risks are identified
and appropriately managed so that unexpected losses and surprises are reduced.
Question 4
Answer: 4 — All of the above.
The benefits include:
, building stakeholder and investor confidence;
aligning risk appetite with strategy;
linking risk management with audit requirements; and
enabling the organisation to identify and exploit opportunities.
Question 5
Answer: 1 — Risk management carried out in silos and extensive use of
insurance.
The traditional approach tended to manage risks separately within departments and
relied heavily on insurance. ERM instead promotes an integrated and comprehensive
approach.
Question 6
Answer: 4 — All of the above.
King III applies broadly to listed companies and also has relevance to banks, insurance
institutions and certain public-sector entities.
Question 7
Answer: 3 — Risk management should be performed on an ongoing basis.
Risk management is not a once-off exercise. Risks change as the organisation, its
environment and its objectives change.
Question 8
Answer: 2 — a, b, c.
The concepts include:
shareholder approval of remuneration policies;
, alternative dispute resolution; and
directors' performance evaluation.
Business rescue is principally associated with the Companies Act rather than being a
new King III concept.
Question 9
Answer: 3 — Ethical practices.
King III responded strongly to changing expectations concerning ethical leadership,
corporate citizenship and responsible governance.
Question 10
Answer: 4 — All of the above.
A good corporate citizen should promote ethical conduct, align IT with organisational
objectives, report on social/health/environmental matters and ensure that significant
risks are properly identified, quantified and addressed.
Question 11
Answer: 3 — Framework.
The risk-management policy forms part of the broader ERM framework.
Question 12
Answer: 4 — PEST analysis.
PEST analysis examines the political, economic, social and technological
environment affecting the organisation. It is one of the tools used during the context-
establishment stage.
Question 13
EXAM PACK
,RSK2601- ENTERPRISE RISK MANAGEMENT
OCTOBER/NOVEMBER 2015
EXAM ANSWERS
SECTION A: MULTIPLE-CHOICE QUESTIONS
Question 1
Answer: 2 — Comprehensive, inclusive and proactive approach to risk
management.
ERM takes a holistic approach by integrating different categories of risk throughout the
organisation rather than managing risks in isolated silos.
Question 2
Answer: 4 — Set out how the risks will be managed and controlled.
A risk-management policy establishes the organisation's approach to managing
identified risks, including responsibilities, accountability, boundaries and reporting.
Question 3
Answer: 1 — The avoidance of unpleasant surprises and losses.
Boards fundamentally want ERM to provide assurance that major risks are identified
and appropriately managed so that unexpected losses and surprises are reduced.
Question 4
Answer: 4 — All of the above.
The benefits include:
, building stakeholder and investor confidence;
aligning risk appetite with strategy;
linking risk management with audit requirements; and
enabling the organisation to identify and exploit opportunities.
Question 5
Answer: 1 — Risk management carried out in silos and extensive use of
insurance.
The traditional approach tended to manage risks separately within departments and
relied heavily on insurance. ERM instead promotes an integrated and comprehensive
approach.
Question 6
Answer: 4 — All of the above.
King III applies broadly to listed companies and also has relevance to banks, insurance
institutions and certain public-sector entities.
Question 7
Answer: 3 — Risk management should be performed on an ongoing basis.
Risk management is not a once-off exercise. Risks change as the organisation, its
environment and its objectives change.
Question 8
Answer: 2 — a, b, c.
The concepts include:
shareholder approval of remuneration policies;
, alternative dispute resolution; and
directors' performance evaluation.
Business rescue is principally associated with the Companies Act rather than being a
new King III concept.
Question 9
Answer: 3 — Ethical practices.
King III responded strongly to changing expectations concerning ethical leadership,
corporate citizenship and responsible governance.
Question 10
Answer: 4 — All of the above.
A good corporate citizen should promote ethical conduct, align IT with organisational
objectives, report on social/health/environmental matters and ensure that significant
risks are properly identified, quantified and addressed.
Question 11
Answer: 3 — Framework.
The risk-management policy forms part of the broader ERM framework.
Question 12
Answer: 4 — PEST analysis.
PEST analysis examines the political, economic, social and technological
environment affecting the organisation. It is one of the tools used during the context-
establishment stage.
Question 13
