BUS532
Ethical Risk Management & Compliance
Comprehensive Finals Review (Qns & Ans)
2025
1. In the context of risk management, what is 'risk appetite'?
- A) The estimated financial loss a company can incur.
- B) The degree of risk an organization is willing to accept.
- C) The frequency of risky incidents occurring.
- D) The strategies to eliminate all risks.
ANS: B) The degree of risk an organization is willing to
accept.
©2024/2025
, Rationale: Risk appetite defines the level of risk that an
organization is prepared to accept while conducting business to
achieve its objectives.
2. Which of the following is a primary objective of ethical risk
management?
- A) Maximizing shareholder value.
- B) Ensuring compliance with all regulations.
- C) Minimizing operational costs.
- D) Aligning corporate behavior with societal values.
ANS: D) Aligning corporate behavior with societal values.
Rationale: Ethical risk management aims to ensure that
organizational behavior is not only lawful but also meets ethical
standards and societal expectations.
3. Which standard is most closely associated with compliance
management systems?
- A) ISO 9001
- B) ISO 31000
- C) ISO 19600
- D) ISO 27001
©2024/2025
, ANS: C) ISO 19600.
Rationale: ISO 19600 provides comprehensive guidelines for
establishing, developing, implementing, and maintaining an
effective compliance management system.
4. In compliance risk assessment, what does 'inherent risk' refer
to?
- A) The risk that remains after controls are implemented.
- B) The potential risk inherent in a process before any controls.
- C) A risk that has been transferred to a third party.
- D) The unpredictable influence of external factors.
ANS: B) The potential risk inherent in a process before any
controls.
Rationale: Inherent risk is the inherent exposure to risk
before any mitigating controls are applied.
5. What role does a compliance officer primarily play in an
organization?
- A) Developing new business strategies.
- B) Enforcing compliance with internal and external policies.
©2024/2025
Ethical Risk Management & Compliance
Comprehensive Finals Review (Qns & Ans)
2025
1. In the context of risk management, what is 'risk appetite'?
- A) The estimated financial loss a company can incur.
- B) The degree of risk an organization is willing to accept.
- C) The frequency of risky incidents occurring.
- D) The strategies to eliminate all risks.
ANS: B) The degree of risk an organization is willing to
accept.
©2024/2025
, Rationale: Risk appetite defines the level of risk that an
organization is prepared to accept while conducting business to
achieve its objectives.
2. Which of the following is a primary objective of ethical risk
management?
- A) Maximizing shareholder value.
- B) Ensuring compliance with all regulations.
- C) Minimizing operational costs.
- D) Aligning corporate behavior with societal values.
ANS: D) Aligning corporate behavior with societal values.
Rationale: Ethical risk management aims to ensure that
organizational behavior is not only lawful but also meets ethical
standards and societal expectations.
3. Which standard is most closely associated with compliance
management systems?
- A) ISO 9001
- B) ISO 31000
- C) ISO 19600
- D) ISO 27001
©2024/2025
, ANS: C) ISO 19600.
Rationale: ISO 19600 provides comprehensive guidelines for
establishing, developing, implementing, and maintaining an
effective compliance management system.
4. In compliance risk assessment, what does 'inherent risk' refer
to?
- A) The risk that remains after controls are implemented.
- B) The potential risk inherent in a process before any controls.
- C) A risk that has been transferred to a third party.
- D) The unpredictable influence of external factors.
ANS: B) The potential risk inherent in a process before any
controls.
Rationale: Inherent risk is the inherent exposure to risk
before any mitigating controls are applied.
5. What role does a compliance officer primarily play in an
organization?
- A) Developing new business strategies.
- B) Enforcing compliance with internal and external policies.
©2024/2025
