CISI-Managing Operational Risk in Financial Institutions
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
Not categorized0%
1
2
3
4
5
6
7
8
9
10
Answered
Review
Question 1 of 10
1. Question
The System should be reported comprehensively and adequately in policies accepted by the board of directors and should include descriptions of operational risk and operational loss. Banks that fail to adequately identify and define operational risk and exposure to losses can significantly reduce their Framework’s effectiveness. The documentation of the process should explicitly state:
Correct
Describes agreed operating risk appetite and responsiveness, as well as levels or limitations for endogenous and residual risk, and recognized risk control techniques and methods.
Incorrect
Describes agreed operating risk appetite and responsiveness, as well as levels or limitations for endogenous and residual risk, and recognized risk control techniques and methods.
Question 2 of 10
2. Question
The Board of Directors will define, approve and review the Structure periodically. Senior management will be supervised by the board of directors to ensure that procedures, processes, and structures are successfully applied at all decision levels. The executive board should:
Correct
Provide consistent guidelines and advice to central management on the values underpinning the Framework and recognize appropriate policies defined by senior management.
Incorrect
Provide consistent guidelines and advice to central management on the values underpinning the Framework and recognize appropriate policies defined by senior management.
Question 3 of 10
3. Question
The governance structure of a bank should be in accordance with the existence, scale, complexity and risk profile of its operations. A bank should not take the following into account when developing the operational risk governance structure:
Correct
Service of the Committee–Meetings of the Committee shall not take place at a suitable date, with ample preparation and money to interrupt productive discussion and decision-making. Records of the actions of the Committee would be inadequate to allow for a effective review and assessment of the Report.
Incorrect
Service of the Committee–Meetings of the Committee shall not take place at a suitable date, with ample preparation and money to interrupt productive discussion and decision-making. Records of the actions of the Committee would be inadequate to allow for a effective review and assessment of the Report.
Question 4 of 10
4. Question
Examples of instruments which can be used to define and evaluate operational risk include:
Correct
Audit Findings, Internal Loss Data Collection and Analysis and External Data Collection and Analysis are examples of instruments which can be used to define and evaluate operational risk
Incorrect
Audit Findings, Internal Loss Data Collection and Analysis and External Data Collection and Analysis are examples of instruments which can be used to define and evaluate operational risk
Question 5 of 10
5. Question
A bank will have policies and procedures dealing with the evaluation and approval process for new goods, operations, processes, and systems. The evaluation and approval process will take into consideration:
Correct
Inherent risks in the new product, service, or activity, changes to the bank’s operational risk profile and appetite and tolerance, including the risk of existing products or activities, the necessary controls, risk management processes, and risk mitigation strategies, the residual risk, changes to relevant risk thresholds or limits and the procedures and metrics to measure, monitor, and manage the risk of the new product or activity.
Incorrect
Inherent risks in the new product, service, or activity, changes to the bank’s operational risk profile and appetite and tolerance, including the risk of existing products or activities, the necessary controls, risk management processes, and risk mitigation strategies, the residual risk, changes to relevant risk thresholds or limits and the procedures and metrics to measure, monitor, and manage the risk of the new product or activity.
Question 6 of 10
6. Question
Organizational risk reports that include internal financial, organizational, and enforcement metrics, as well as external market or environmental information related to decision-making events and conditions. Documents on the operating risk will include:
Correct
Breaches of the bank’s risk appetite and tolerance statement, as well as thresholds or limits, details of recent significant internal operational risk events and losses and relevant external events and any potential impact on the bank and operational risk capital.
Incorrect
Breaches of the bank’s risk appetite and tolerance statement, as well as thresholds or limits, details of recent significant internal operational risk events and losses and relevant external events and any potential impact on the bank and operational risk capital.
Question 7 of 10
7. Question
A framework for ensuring compliance with policies should include monitoring mechanisms and procedures. Examples of main enforcement elements in a policy evaluation include:
Correct
Top-level reviews of progress towards stated objectives, verifying compliance with management controls, review of the treatment and resolution of instances of non-compliance, evaluation of the required approvals and authorisations to ensure accountability to an appropriate level of management and tracking reports for approved exceptions to thresholds or limits, management overrides and other deviations from policy.
Incorrect
Top-level reviews of progress towards stated objectives, verifying compliance with management controls, review of the treatment and resolution of instances of non-compliance, evaluation of the required approvals and authorisations to ensure accountability to an appropriate level of management and tracking reports for approved exceptions to thresholds or limits, management overrides and other deviations from policy.
Question 8 of 10
8. Question
In addition to the division of duties and dual control, banks will ensure that conventional internal controls are in place to mitigate operational risk as necessary. Examples of such inspections include:
Correct
Clearly established authorities and/or processes for approval, close monitoring of adherence to assigned risk thresholds or limits, safeguards for access to, and use of, bank assets and records, appropriate staffing level and training to maintain expertise, ongoing processes to identify business lines or products where returns appear to be out of line with reasonable expectations, regular verification and reconciliation of transactions and accounts and a vacation policy that provides for officers and employees being absent from their duties for a period of not less than two consecutive weeks.
Incorrect
Clearly established authorities and/or processes for approval, close monitoring of adherence to assigned risk thresholds or limits, safeguards for access to, and use of, bank assets and records, appropriate staffing level and training to maintain expertise, ongoing processes to identify business lines or products where returns appear to be out of line with reasonable expectations, regular verification and reconciliation of transactions and accounts and a vacation policy that provides for officers and employees being absent from their duties for a period of not less than two consecutive weeks.
Question 9 of 10
9. Question
The use of goods, operations, and distribution platforms related to technology exposes a bank to economic, operational, and reputational risks, and the potential for material financial loss. The Bank will provide an integrated approach to technology risk identification, control and management. Sound risk management technology makes use of the same precepts as operational risk management and includes:
Correct
Governance and oversight controls that ensure technology, including outsourcing arrangements, is aligned with and supportive of the bank’s business objectives, policies and procedures that facilitate identification and assessment of risk, establishment of a risk appetite and tolerance statement as well as performance expectations to assist in controlling and managing risk, implementation of an effective control environment and the use of risk transfer strategies that mitigate risk and monitoring processes that test for compliance with policy thresholds or limits.
Incorrect
Governance and oversight controls that ensure technology, including outsourcing arrangements, is aligned with and supportive of the bank’s business objectives, policies and procedures that facilitate identification and assessment of risk, establishment of a risk appetite and tolerance statement as well as performance expectations to assist in controlling and managing risk, implementation of an effective control environment and the use of risk transfer strategies that mitigate risk and monitoring processes that test for compliance with policy thresholds or limits.
Question 10 of 10
10. Question
Policy of outsourcing and risk-management practices will include:
Correct
Policy of outsourcing and risk-management practices will include sound outsourcing agreement structuring involving data ownership and confidentiality as well as termination rights.
Incorrect
Policy of outsourcing and risk-management practices will include sound outsourcing agreement structuring involving data ownership and confidentiality as well as termination rights.
Hi, Aiden here, co-founder of Certdemy. I hope you liked it and enjoy our service. We are a group of professional who has been in your position right now – taking exams.
You have already paid for the expensive exam registration fee and it makes no sense to pay for another exam prep tool just because you are working hard on your career for your family and future.
That is why we provide all the top-notch, premium practice questions which are normally charged at over USD200 per exam preparation tools to you completely for free.
But we need your help and I am not asking for a donation. It comes with a huge running cost to hire exam professionals to craft the questions, pay for the domain, hosting fee, and web maintenance.
If this is not much to ask for, can you spend 5 seconds of your time and share our service to your favorite forums, friends & colleagues so that they can also enjoy our service and help us keep this place running? Thanks so much in advance if you have already done so!
To your success,
Aiden D. Lucas We earn a commission for each qualified sales with no additional cost to you as amazon associate