RIMS CRMP EXAM STUDY GUIDE
COMMON TERMS QUESTIONS AND
ANSWERS
Root cause analysis -Answer-A problem-solving methodology used to find the root
causes of problems.
Include fault tree analysis, event tree analysis, failure mode and effect analysis, and
cause and effect analysis (fishbone)
Strategic risk management -Answer-A business discipline that drives deliberation
and action regarding uncertainties and untapped opportunities that affect an
organization's strategy and strategy execution.
SWOT analysis -Answer-Strengths, Weaknesses, Opportunities, and Threats and is
an analytical approach for environmental scanning that combines internal and
external context with obstacles and accelerators to success in achieving objectives.
Can Identify risk related Obstacles ( threats and weaknesses) and Accelerators
(Strengths and Opportunities)
SMART goals -Answer-Simple, Measurable, Achievable, Realistic and Timely and
refers to characteristics of high quality goals and objectives.
Value chain -Answer-A high-level model developed by Michael Porter used to
describe the process by which businesses receive raw materials, add value to the
raw materials through various processes to create a finished product, and then sell
that end product to customers. Companies conduct value-chain analysis by looking
at every production step required to create a product and identifying ways to
increase the efficiency of the chain. The overall goal is to deliver maximum value for
the least possible total cost and create a competitive advantage
the series of functions, processes, materials and activities (inputs) from concept to
the eventual end user that creates and builds value at every step in order to deliver a
product or service (output).
Risk analysis -Answer-process of characterizing and understanding the nature of risk
and of considering the level of risk in the context of the organization's willingness to
accept risk. Once identified, Risk is typically analyzed on the basis of likelihood and
consequences for the objective or issue under review. Other criteria for measuring
and evaluating the significance and effect of risk can be used.
Once risk is identified, must:
1. Describe the risk (likelihood, consequences, timing, duration, vulnerability and
interdependencies)
2. Measure the risk
Quantitative/Qualitative/Assumptions
, Combination of several
Risk Identification Process -Answer-compromised of finding, recognizing and
recording risks
Risk Monitoring -Answer-means "to observe and check the progress or quality of
(something) over a period of time; keep under systematic review"
Analysis -Answer-1. A systematic examination and evaluation of data or information,
by breaking it into its component parts to uncover their interrelationships. Opposite of
Synthesize.
2. An examination of data and facts to uncover and understand cause-effect
relationships, thus providing basis for problem solving and decision making.
Strategic Plan -Answer-complete plan of action for whatever situations might arise in
achieving an organization's goals within the established time. An organization's
strategic plans will determine the actions the organization will take at any stage of
the planning period as circumstances change.
Includes company's Vision Statement, Mission Statement, Strategy
How does the organization intend to execute the plan of all of the above?
Vision Statement -Answer-Where does the organization want to be in the future?
Aspirations?
Mission Statement -Answer-Why does the organization exist?
Strategy -Answer-What will the organization do to accomplish its mission (plan)?
COSP -Answer-Compile, Organize, Synthesize, Prioritize
Compile - compile internal and external information
Organize - make everything easily accessible
Synthesize - combine data in ways that are coherent, logical, and meaningful
Prioritize - Choose information that is most relevant and useful
Conduct Risk -Answer-comprises a wide variety of activities and types of behavior
that fall outside other main categories of risk (market, credit, liquidity, operational
risk). Refers to risks attached to the way a firm behaves in a wide range of market-
facing and internal situations. No official definition. Generally agreed to incorporate
matters such as how customers are treated, remuneration of staff, and how firms
deal with conflicts of Interest.
Ernst and Young "Risk Culture: Much Ado about something"
COMMON TERMS QUESTIONS AND
ANSWERS
Root cause analysis -Answer-A problem-solving methodology used to find the root
causes of problems.
Include fault tree analysis, event tree analysis, failure mode and effect analysis, and
cause and effect analysis (fishbone)
Strategic risk management -Answer-A business discipline that drives deliberation
and action regarding uncertainties and untapped opportunities that affect an
organization's strategy and strategy execution.
SWOT analysis -Answer-Strengths, Weaknesses, Opportunities, and Threats and is
an analytical approach for environmental scanning that combines internal and
external context with obstacles and accelerators to success in achieving objectives.
Can Identify risk related Obstacles ( threats and weaknesses) and Accelerators
(Strengths and Opportunities)
SMART goals -Answer-Simple, Measurable, Achievable, Realistic and Timely and
refers to characteristics of high quality goals and objectives.
Value chain -Answer-A high-level model developed by Michael Porter used to
describe the process by which businesses receive raw materials, add value to the
raw materials through various processes to create a finished product, and then sell
that end product to customers. Companies conduct value-chain analysis by looking
at every production step required to create a product and identifying ways to
increase the efficiency of the chain. The overall goal is to deliver maximum value for
the least possible total cost and create a competitive advantage
the series of functions, processes, materials and activities (inputs) from concept to
the eventual end user that creates and builds value at every step in order to deliver a
product or service (output).
Risk analysis -Answer-process of characterizing and understanding the nature of risk
and of considering the level of risk in the context of the organization's willingness to
accept risk. Once identified, Risk is typically analyzed on the basis of likelihood and
consequences for the objective or issue under review. Other criteria for measuring
and evaluating the significance and effect of risk can be used.
Once risk is identified, must:
1. Describe the risk (likelihood, consequences, timing, duration, vulnerability and
interdependencies)
2. Measure the risk
Quantitative/Qualitative/Assumptions
, Combination of several
Risk Identification Process -Answer-compromised of finding, recognizing and
recording risks
Risk Monitoring -Answer-means "to observe and check the progress or quality of
(something) over a period of time; keep under systematic review"
Analysis -Answer-1. A systematic examination and evaluation of data or information,
by breaking it into its component parts to uncover their interrelationships. Opposite of
Synthesize.
2. An examination of data and facts to uncover and understand cause-effect
relationships, thus providing basis for problem solving and decision making.
Strategic Plan -Answer-complete plan of action for whatever situations might arise in
achieving an organization's goals within the established time. An organization's
strategic plans will determine the actions the organization will take at any stage of
the planning period as circumstances change.
Includes company's Vision Statement, Mission Statement, Strategy
How does the organization intend to execute the plan of all of the above?
Vision Statement -Answer-Where does the organization want to be in the future?
Aspirations?
Mission Statement -Answer-Why does the organization exist?
Strategy -Answer-What will the organization do to accomplish its mission (plan)?
COSP -Answer-Compile, Organize, Synthesize, Prioritize
Compile - compile internal and external information
Organize - make everything easily accessible
Synthesize - combine data in ways that are coherent, logical, and meaningful
Prioritize - Choose information that is most relevant and useful
Conduct Risk -Answer-comprises a wide variety of activities and types of behavior
that fall outside other main categories of risk (market, credit, liquidity, operational
risk). Refers to risks attached to the way a firm behaves in a wide range of market-
facing and internal situations. No official definition. Generally agreed to incorporate
matters such as how customers are treated, remuneration of staff, and how firms
deal with conflicts of Interest.
Ernst and Young "Risk Culture: Much Ado about something"
