Enterprise Risk Management Test Questions with Correct Answers Fully Solved Latest Version 2025
Enterprise Risk Management (ERM) - Answers includes methods and processes used by organizations to
manage risks and seize opportunities related to the achievement of objectives
Risk Oversight - Answers the board's supervision of the risk management framework and risk
management process
Risk Management - Answers the responsibility(s) of a company's management team in relation to risk
understanding an organization: step 1 - Answers identifying the organization's objectives, stakeholder
obligations, statutory duties, and the enviroment in which the organization operates
understanding an organization: step 2 - Answers identifying the activities, assets/resources, including
those outside the organization, that support the delivery of these product services (process mapping)
understanding an organization: step 3 - Answers assessing the impact/consequences over time of the
failure of these activities/assets/resources
understanding an organization: step 4 - Answers identifying/evaluating the perceived threates that
could disrupt the organization's key products and services and the critical activities/assets/resources
that support them
preparing to manage risk: step 1 - Answers utilize a proper steering committee. assign these people to
participate in a cross-functional forum to provide oversight on business continuity and information
security risk
preparing to manage risk: step 2 - Answers establish and document the right management structure
according to authority
preparing to manage risk: step 3 - Answers determine and document a formal risk management
methodology to ensure consistency and integrity of risk management throughout the organization
preparing to manage risk: step 4 - Answers initiate and formalize the risk management business process
by providing appropriate formal risk management training to all individuals involved in risk
identification, business impact assessment, and risk treatment
principle of ERM: 1 - Answers Risk management creates and protects values
principle of ERM: 2 - Answers Risk management is an integral part of all organizational processes
principle of ERM: 3 - Answers Risk management is part of decision making
principle of ERM: 4 - Answers Risk management should explicitly address uncertainty
principle of ERM: 5 - Answers Risk management is systematic, timely, and structured
principle of ERM: 6 - Answers Risk management is based on the best available information
,principle of ERM: 7 - Answers Risk management is tailored
principle of ERM: 8 - Answers Risk management takes human and cultural factors into account
principle of ERM: 9 - Answers Risk management is transparent and inclusive
principle of ERM: 10 - Answers Risk management is dynamic, iterative, and responsive to change
principle of ERM: 11 - Answers Risk management facilitates continual improvement of the organization
major step to ERM: 1 - Answers establish the risk organization (Risk management architecture)
major step to ERM: 2 - Answers define what ERM is, and what it should accomplish (Risk strategy)
major step to ERM: 3 - Answers Define and document how risk assessment and risk management
processes are executed (Risk protocols)
establishing the risk organization step 1 - Answers Mandate and commitment: mandate and
commitment from the board is critically important and it needs to be continuous and high-profile.
establishing the risk organization step 2 - Answers Designing a framework program for managing risk
role of management: 1 - Answers define and endorse the risk management policy
role of management: 2 - Answers ensure that the organization's culture and risk management policy are
aligned
role of management: 3 - Answers determine risk management performance indicators that align with
performance indicators of the organization
role of management: 4 - Answers align risk management objectives with the objectives and strategies of
the organization
role of management: 5 - Answers ensure legal and regulatory compliance
role of management: 6 - Answers assign accountabilities and reposnsibilities at appropriate levels with
the organization
role of management: 7 - Answers ensure that the necessary resources are allocated to risk management
role of management: 8 - Answers communicate the benefits of risk management to all stakeholders
role of management: 9 - Answers ensure that the framework for managing risk continues to remain
appropriate
communication and consultation: step 1 - Answers developing a communication plan
communication and consultation: step 2 - Answers defining the context appropriately
, communication and consultation: step 3 - Answers ensuring that the interests of stakeholders are
understood and considered
communication and consultation: step 4 - Answers bringing together different areas of expertise for
identifying and analyzing risk
communication and consultation: step 5 - Answers ensuring that different views are appropriately
considered in evaluating risks
communication and consultation: step 6 - Answers ensuring that risks are adequately identified
communication and consultation: step 7 - Answers securing endorsement and support for a treatment
plan
risk context - Answers by establishing risk context the organization articulated its objectives, defines the
external and internal parameters to be taken into account when managing risk, and sets the scope and
risk criteria for the remaining process
external risk context - Answers the social, cultural, political, legal, regulatory, financial, technological,
economic, natural/competitive environment (whether international, national, regional, or local)
internal risk context - Answers governace, organization structure, roles and accountabilities
policies, objectives, and the strategies that are in place to achieve them
capabilities, understood in terms of resources and knowledge
information systems, information flows, and decision making processes (both formal and informal)
relationships with, and perceptions/values of, internal stakeholders
the organization's culture
standards, guidelines, and models adopted by the organization
the form and extent of contractual relationships
risk classification - Answers Risk classification systems are based on the division of risks into those
related to financial control, operational efficiency, reputation exposure, and commercial activities and
are customized to each organization's specifications, needs, and abilities.
high level risk management policy - Answers formalizes management's requirements, goals, and
objectives - once they are determine definitively
risk management policy includes: 1 - Answers the organizations' rational for managing risk
risk management policy includes: 2 - Answers links between the organization's objectives/policies and
the risk management policy
Enterprise Risk Management (ERM) - Answers includes methods and processes used by organizations to
manage risks and seize opportunities related to the achievement of objectives
Risk Oversight - Answers the board's supervision of the risk management framework and risk
management process
Risk Management - Answers the responsibility(s) of a company's management team in relation to risk
understanding an organization: step 1 - Answers identifying the organization's objectives, stakeholder
obligations, statutory duties, and the enviroment in which the organization operates
understanding an organization: step 2 - Answers identifying the activities, assets/resources, including
those outside the organization, that support the delivery of these product services (process mapping)
understanding an organization: step 3 - Answers assessing the impact/consequences over time of the
failure of these activities/assets/resources
understanding an organization: step 4 - Answers identifying/evaluating the perceived threates that
could disrupt the organization's key products and services and the critical activities/assets/resources
that support them
preparing to manage risk: step 1 - Answers utilize a proper steering committee. assign these people to
participate in a cross-functional forum to provide oversight on business continuity and information
security risk
preparing to manage risk: step 2 - Answers establish and document the right management structure
according to authority
preparing to manage risk: step 3 - Answers determine and document a formal risk management
methodology to ensure consistency and integrity of risk management throughout the organization
preparing to manage risk: step 4 - Answers initiate and formalize the risk management business process
by providing appropriate formal risk management training to all individuals involved in risk
identification, business impact assessment, and risk treatment
principle of ERM: 1 - Answers Risk management creates and protects values
principle of ERM: 2 - Answers Risk management is an integral part of all organizational processes
principle of ERM: 3 - Answers Risk management is part of decision making
principle of ERM: 4 - Answers Risk management should explicitly address uncertainty
principle of ERM: 5 - Answers Risk management is systematic, timely, and structured
principle of ERM: 6 - Answers Risk management is based on the best available information
,principle of ERM: 7 - Answers Risk management is tailored
principle of ERM: 8 - Answers Risk management takes human and cultural factors into account
principle of ERM: 9 - Answers Risk management is transparent and inclusive
principle of ERM: 10 - Answers Risk management is dynamic, iterative, and responsive to change
principle of ERM: 11 - Answers Risk management facilitates continual improvement of the organization
major step to ERM: 1 - Answers establish the risk organization (Risk management architecture)
major step to ERM: 2 - Answers define what ERM is, and what it should accomplish (Risk strategy)
major step to ERM: 3 - Answers Define and document how risk assessment and risk management
processes are executed (Risk protocols)
establishing the risk organization step 1 - Answers Mandate and commitment: mandate and
commitment from the board is critically important and it needs to be continuous and high-profile.
establishing the risk organization step 2 - Answers Designing a framework program for managing risk
role of management: 1 - Answers define and endorse the risk management policy
role of management: 2 - Answers ensure that the organization's culture and risk management policy are
aligned
role of management: 3 - Answers determine risk management performance indicators that align with
performance indicators of the organization
role of management: 4 - Answers align risk management objectives with the objectives and strategies of
the organization
role of management: 5 - Answers ensure legal and regulatory compliance
role of management: 6 - Answers assign accountabilities and reposnsibilities at appropriate levels with
the organization
role of management: 7 - Answers ensure that the necessary resources are allocated to risk management
role of management: 8 - Answers communicate the benefits of risk management to all stakeholders
role of management: 9 - Answers ensure that the framework for managing risk continues to remain
appropriate
communication and consultation: step 1 - Answers developing a communication plan
communication and consultation: step 2 - Answers defining the context appropriately
, communication and consultation: step 3 - Answers ensuring that the interests of stakeholders are
understood and considered
communication and consultation: step 4 - Answers bringing together different areas of expertise for
identifying and analyzing risk
communication and consultation: step 5 - Answers ensuring that different views are appropriately
considered in evaluating risks
communication and consultation: step 6 - Answers ensuring that risks are adequately identified
communication and consultation: step 7 - Answers securing endorsement and support for a treatment
plan
risk context - Answers by establishing risk context the organization articulated its objectives, defines the
external and internal parameters to be taken into account when managing risk, and sets the scope and
risk criteria for the remaining process
external risk context - Answers the social, cultural, political, legal, regulatory, financial, technological,
economic, natural/competitive environment (whether international, national, regional, or local)
internal risk context - Answers governace, organization structure, roles and accountabilities
policies, objectives, and the strategies that are in place to achieve them
capabilities, understood in terms of resources and knowledge
information systems, information flows, and decision making processes (both formal and informal)
relationships with, and perceptions/values of, internal stakeholders
the organization's culture
standards, guidelines, and models adopted by the organization
the form and extent of contractual relationships
risk classification - Answers Risk classification systems are based on the division of risks into those
related to financial control, operational efficiency, reputation exposure, and commercial activities and
are customized to each organization's specifications, needs, and abilities.
high level risk management policy - Answers formalizes management's requirements, goals, and
objectives - once they are determine definitively
risk management policy includes: 1 - Answers the organizations' rational for managing risk
risk management policy includes: 2 - Answers links between the organization's objectives/policies and
the risk management policy
