ISO-31000-CLA Sample Questions Answers

Records are one of the tools used by risk managers for communication between stakeholders and interested parties2. Records help to share information, insights, recommendations, and decisions related to risk management.

Inclusiveness is another critical attribute of good risk management. Inclusiveness helps to ensure that different perspectives, knowledge, and values are considered in risk management.

According to 1, OCEG GRC model is “a framework for integrating governance, risk management, compliance and ethics/culture into a single capability”. It defines risk management as “the capability that enables an organization to understand how uncertainty affects its ability to achieve objectives” 2.

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.

A train crash and its consequences is an example of risk aggregation, which is the combined effect of multiple risks on an organisation’s objectives3. Risk aggregation can result in losses that are greater than the sum of individual losses.

According to 3, page 6, one of the current trends in auditing, risk management and compliance is “moving from a back-office function providing lagging indicators about risk (e.g., audit findings) to a front-office function providing leading indicators about risk (e.g., key risk indicators)”.

The accuracy and reliability of the risk assessment should be identified as clearly as possible1. This helps to communicate the level of confidence in the risk assessment results and to inform decision-making.

ISO 31000:2018 offers a generic outline for the design of the risk management framework and process. ISO 31000:2018 provides guidelines that can be adapted to any organization’s situation and circumstances.

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 countries23. It provides guidelines on managing any type of risk faced by organizations.

According to , page 9, one of the current trends in auditing, risk management and compliance is “shifting from auditing people to auditing processes”. This means that internal auditors focus more on how well an organization’s processes are designed and implemented to achieve its objectives and manage its risks.

A risk management professional advises management on the status of key risks by providing insights into the changing characteristics of a risk3. This helps to monitor and review the effectiveness of risk management activities and communicate any changes in risk levels or priorities.

According to 1, there are four types of potential risk strategies for threats: avoid (eliminate or change), transfer (share or outsource), mitigate (reduce or control), accept (retain or monitor). There are also four types of potential risk strategies for opportunities: exploit (ensure or enhance), share (allocate or collaborate), enhance (increase or maximize), accept (acknowledge or watch).