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Detailed New ISO-31000-CLA Exam Questions for Concept Clearance
NEW QUESTION # 52
Which of the following is a process with inputs, activities, and outcomes?
- A. Financial management
- B. Relations management
- C. Risk management
- D. Quality management
Answer: C
Explanation:
Explanation
Risk management is a process with inputs, activities, and outcomes1. The inputs are the organization's context and risk criteria. The activities are risk identification, analysis, evaluation, and treatment. The outcomes are improved decision making, performance, and resilience.
NEW QUESTION # 53
Which of the following consists of risk management principles, framework, and process that have been adopted as a national risk management standard by more than 60 countries?
- A. ISO 31000:2018
- B. ISO 14001:2018
- C. ISO 27001:2013
- D. ISO 9001:2015
Answer: A
Explanation:
Explanation
ISO 31000:2018 consists of risk management principles, framework, and process that have been adopted as a national risk management standard by more than 60 countries . It provides guidelines on managing any type of risk faced by organizations.
NEW QUESTION # 54
Which type of risk management technique does insurance belongs to?
- A. Reduction
- B. Sharing
- C. Retention
Answer: B
Explanation:
Explanation
According to , page 16-17, insurance belongs to sharing technique which is "a way of transferring some or all financial consequences associated with a particular exposure". It involves paying a premium in exchange for compensation in case of loss.
NEW QUESTION # 55
As part of the ISO 31000 risk management process, 'monitoring and review' is best thought of as which of the following?
- A. A feedback loop.
- B. Part of risk assessment.
- C. An extra stage.
Answer: A
Explanation:
Explanation
According to 3, clause 6.5., monitoring and review "is intended as a feedback loop for checking whether any change has occurred either internally or externally that may affect performance against objectives". It helps to ensure that the risk management process remains relevant and effective over time.
NEW QUESTION # 56
Which management is core to governance and compliance?
- A. Fillet
- B. Quality
- C. Risk
- D. Crisis
Answer: C
Explanation:
Explanation
Risk management is core to governance and compliance . Risk management helps to ensure that organizational objectives are achieved in a lawful, ethical, and transparent manner.
NEW QUESTION # 57
Relying on historic analysis when assessing potential risks and possible impacts implies that
- A. should adverse events occur, the impact can be accurately modelled.
- B. all significant risks can be confidently analysed.
- C. management believe that the future will behave much like the past.
Answer: C
Explanation:
Explanation
According to 1, page 19, historic analysis is "a method of risk identification based on past data". It assumes that past patterns and trends will continue in the future, which may not always be true.
NEW QUESTION # 58
ISO 31000:2018 currently has a tactical and process focus.
- A. False
- B. True
Answer: A
Explanation:
Explanation
The ISO 31000:2018 standard provides a framework for risk management, with a focus on the strategic and integrated aspects of risk management. It outlines principles, a framework, and a process for managing risk in organizations of all kinds. The focus of the standard is on aligningrisk management with the organization's context, objectives, and strategy, and on integrating risk management into all aspects of an organization's governance, culture, and performance.
NEW QUESTION # 59
Which of the following statement about operations risk management is incorrect?
- A. Capable of continual improvement and enhancement
- B. Disregarding human factors
- C. Dynamic, iterative and responsive to change
- D. Transparent and inclusive
Answer: B
Explanation:
Explanation
According to ISO31000 (2018), clause 4., one of the principles of effective risk management is "taking human and cultural factors into account". This means that risk management should consider how people's behaviors, perceptions, values and attitudes influence or are influenced by risk .
NEW QUESTION # 60
Which teams are composed of cross functional subject matter experts, risk experts, and process owners?
- A. Crisis Information teams
- B. Project management teams
- C. Crisis management teams
- D. Risk assessment teams
Answer: D
Explanation:
Explanation
Risk assessment teams are composed of cross functional subject matter experts, risk experts, and process owners. Risk assessment teams conduct risk assessments for specific areas or projects within the organization.
NEW QUESTION # 61
A systemic risk involves:
- A. A potential major disruption in the function of an entire market or financial system
- B. A risk that all of the current suppliers of an organization's inputs will be unable to produce the inputs
- C. A risk that loss in one area of an organization may cause loss in another area of the organization
- D. A risk that an event will cause multiple key people in an organization to leave at once
Answer: A
Explanation:
Explanation
According to 1, systemic risk is "the possibility that an event at the company level could trigger severe instability or collapse an entire industry or economy". It is different from other types of risks that affect only specific parts or aspects of an organization
NEW QUESTION # 62
Which of the following statements about captive insurance companies are correct?
1. A captive cannot act as a reinsurer.
2. A captive can access reinsurance markets.
3. A captive can sometimes offer greater cover than is available in the insurance market.
4. A captive must be located in the same country as its parent company.
- A. 1 and 2.
- B. 1 and 4.
- C. 2 and 3.
Answer: C
Explanation:
Explanation
According to 3, a captive insurance company is "a wholly owned subsidiary insurer that provides risk mitigation services for its parent company or related entities". It can act as a reinsurer by accepting risks from other insurers or captives 1. It can also access reinsurance markets to transfer some of its own risks 1. It can sometimes offer greater cover than is available in the insurance market by tailoring its policies to suit its parent's needs 3. It does not have to be located in the same country as its parent company; in fact, many captives are domiciledoffshore for tax or regulatory reasons
NEW QUESTION # 63
Which risk is sometimes called 'retained risk.'?
- A. Procedural risk
- B. Analytical risk
- C. Residual risk
- D. Conceptualize risk
Answer: C
Explanation:
Explanation
According to ISO/IEC Guide73 (2009), clause B., residual risk is "the level of remaining after controls have been applied". It is sometimes called 'retained risk' because it represents the amount of risk that an organization decides to accept or retain after implementing its mitigation strategies 3.
NEW QUESTION # 64
Hopkin states "most standard definitions of risk refer to risks being attached to corporate objectives". What is another important factor to consider when linking risk to an organisation?
- A. Risk correlation.
- B. Core processes.
- C. Hazard management.
Answer: B
Explanation:
Explanation
According to 1, page 11, core processes are "the activities that an organization performs in order to deliver its products or services". They are essential for achieving the organization's objectives and creating value for its stakeholders. Therefore, core processes should be considered when linking risk to an organization.
NEW QUESTION # 65
The risk management landscape has changed dramatically in recent history because of changes in all but which of the above?
- A. Finance
- B. Globalization
- C. Global warming
- D. Technology
Answer: C
Explanation:
Explanation
According to , page 3, some of the drivers for change in risk management landscape include technology (such as digitalization, automation, artificial intelligence), globalization (such as increased interdependence, complexity and diversity), finance (such as financial crises, regulations, standards) but not global warming.
NEW QUESTION # 66
Risk management is tailored.
- A. False
- B. True
Answer: B
Explanation:
Explanation
Risk management is tailored4. Tailored means that risk management takes into account the specific needs, objectives, and characteristics of each organization and its context.
NEW QUESTION # 67
When an operational area develops a treatment for a critical risk, the risk management professional MUST
- A. evaluate the impact upon other areas.
- B. communicate the treatment plan directly with internal audit.
- C. evaluate the dollar savings associated with the treatment.
- D. add the risk to the risk map.
Answer: A
Explanation:
Explanation
When an operational area develops a treatment for a critical risk, the risk management professional must evaluate the impact upon other areas3. This helps to ensure that the treatment does not create new risks or adversely affect other objectives.
NEW QUESTION # 68
Which of the following ensures that uncertainty is managed so the organization can meet its objectives?
- A. Avoidance risk management
- B. Evasive risk management
- C. Extended risk management
- D. Enhanced risk management
Answer: D
Explanation:
Explanation
Enhanced risk management ensures that uncertainty is managed so the organization can meet its objectives4.
Enhanced risk management involves applying a systematic and logical process to identify, analyze, evaluate, treat, monitor, review, and communicate risks.
NEW QUESTION # 69
Which management ensures that value is created by identifying opportunities for investment, mergers, or acquisition.
- A. Quality
- B. Safety
- C. Risk
- D. Crisis
Answer: C
Explanation:
Explanation
Risk management ensures that value is created by identifying opportunities for investment, mergers, or acquisition. Risk management helps to assess the potential benefits, costs, and risks of different options and make informed decisions.
NEW QUESTION # 70
Which type of risk remains after risk treatment has been applied?
- A. Residual risk
- B. Accepted risk
- C. Avoidance risk
- D. Controlled risk
Answer: A
Explanation:
Explanation
Residual risk is the type of risk that remains after risk treatment has been applied1. Residual risk reflects the remaining exposure or uncertainty after taking into account existing controls.
NEW QUESTION # 71
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