Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
CISI – Managing Operational Risk in Financial Institutions – Joshua – Quiz 3
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 categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- Answered
- Review
-
Question 1 of 10
1. Question
Which of the following options is not part of the responsibilities of a Chief Executive Officer (CEO)
Correct
There is no standardized list of the roles and responsibilities of a chief executive officer. The typical duties, responsibilities, and job description of a CEO include:
Communicating, on behalf of the company, with shareholders, government entities, and the public
Leading the development of the company’s short- and long-term strategy
Creating and implementing the company or organization’s vision and mission
Evaluating the work of other executive leaders within the company, including directors, vice presidents, and presidents
Maintaining awareness of the competitive market landscape, expansion opportunities, industry developments, etc.
Ensuring that the company maintains high social responsibility wherever it does business
Assessing risks to the company and ensuring they are monitored and minimized
Setting strategic goals and making sure they are measurable and describableIncorrect
There is no standardized list of the roles and responsibilities of a chief executive officer. The typical duties, responsibilities, and job description of a CEO include:
Communicating, on behalf of the company, with shareholders, government entities, and the public
Leading the development of the company’s short- and long-term strategy
Creating and implementing the company or organization’s vision and mission
Evaluating the work of other executive leaders within the company, including directors, vice presidents, and presidents
Maintaining awareness of the competitive market landscape, expansion opportunities, industry developments, etc.
Ensuring that the company maintains high social responsibility wherever it does business
Assessing risks to the company and ensuring they are monitored and minimized
Setting strategic goals and making sure they are measurable and describable -
Question 2 of 10
2. Question
Which of the following areas of fraud risk do the Audit committee members need to focus on?
Correct
The audit committee should be satisfied that the company has programs and policies in place to prevent and identify fraud. It should work with management to oversee the establishment of appropriate anti-fraud controls and programs and to take the necessary steps when fraud is detected.
Incorrect
The audit committee should be satisfied that the company has programs and policies in place to prevent and identify fraud. It should work with management to oversee the establishment of appropriate anti-fraud controls and programs and to take the necessary steps when fraud is detected.
-
Question 3 of 10
3. Question
In considering whether or not to establish a risk committee, what key factors will you consider? (Select all that applies)
Correct
In considering whether or not to establish a risk committee one might consider the following key factors:
• Inherent risk environment: The need for a risk committee may be precipitated by the inherent risk environment. The extent, complexity, and potential impact of risks should be considered and weighed against the ability of the board or a board committee (e.g. the audit committee) to deal sufficiently with the workload.
• The needs of stakeholders: The needs of the enterprise and its stakeholders should be
considered. It may also behove the board to assess the quality and comprehensiveness
of the current risk governance and an oversight structure, the risk environment, and the future needs of the organisation. The composition and activities of the risk committee and its relationship with other board committees could reflect the board’s assessment of those factors.Incorrect
In considering whether or not to establish a risk committee one might consider the following key factors:
• Inherent risk environment: The need for a risk committee may be precipitated by the inherent risk environment. The extent, complexity, and potential impact of risks should be considered and weighed against the ability of the board or a board committee (e.g. the audit committee) to deal sufficiently with the workload.
• The needs of stakeholders: The needs of the enterprise and its stakeholders should be
considered. It may also behove the board to assess the quality and comprehensiveness
of the current risk governance and an oversight structure, the risk environment, and the future needs of the organisation. The composition and activities of the risk committee and its relationship with other board committees could reflect the board’s assessment of those factors. -
Question 4 of 10
4. Question
The following are the responsibilities of the risk committee except?
Correct
The risk committee will have specific responsibilities that include but are not limited to, oversight and approval of the enterprise risk management framework commensurate with the complexity of the company including (note that these responsibilities are performed by the committee on behalf of the board
– ultimately the board remains responsible for the final approval of the risk policy and risk management):
• Oversight of risk appetite and risk tolerance appropriate to each business line of the company
• Appropriate policies and procedures relating to risk management governance, risk management practices, and risk control infrastructure for the enterprise as a whole
• Processes and systems for identifying and reporting risks and risk-management deficiencies, including emerging risks, on an enterprise-wide basis
• Monitoring of compliance with the company’s risk limit structure and policies and procedures relating to risk management governance, practices, and risk controls across the enterprise
• Effective and timely implementation of corrective actions to address risk management deficiencies
• Specification of management and employees’ authority and independence to carry out risk management responsibilities, and
• Integration of risk management and control objectives in management goals and the company’s compensation structure.Incorrect
The risk committee will have specific responsibilities that include but are not limited to, oversight and approval of the enterprise risk management framework commensurate with the complexity of the company including (note that these responsibilities are performed by the committee on behalf of the board
– ultimately the board remains responsible for the final approval of the risk policy and risk management):
• Oversight of risk appetite and risk tolerance appropriate to each business line of the company
• Appropriate policies and procedures relating to risk management governance, risk management practices, and risk control infrastructure for the enterprise as a whole
• Processes and systems for identifying and reporting risks and risk-management deficiencies, including emerging risks, on an enterprise-wide basis
• Monitoring of compliance with the company’s risk limit structure and policies and procedures relating to risk management governance, practices, and risk controls across the enterprise
• Effective and timely implementation of corrective actions to address risk management deficiencies
• Specification of management and employees’ authority and independence to carry out risk management responsibilities, and
• Integration of risk management and control objectives in management goals and the company’s compensation structure. -
Question 5 of 10
5. Question
To establish an appropriate risk governance infrastructure, what does the board need to consider?
Correct
To establish an appropriate risk governance infrastructure, the board might consider defining the risk-related roles and responsibilities of each committee as well as clear boundaries and communication channels among them. The board will need to understand and define which committees are responsible for which risks and how each committee oversees risks.
Incorrect
To establish an appropriate risk governance infrastructure, the board might consider defining the risk-related roles and responsibilities of each committee as well as clear boundaries and communication channels among them. The board will need to understand and define which committees are responsible for which risks and how each committee oversees risks.
-
Question 6 of 10
6. Question
The most important role is instilling a consistent level of risk awareness throughout your company, as the Chief Risk Officer in your organisation how would you achieve this?
Correct
The roles and responsibilities of a Chief Risk Officer vary according to the needs of the organization and the qualifications of the individual. The most important role in instilling a consistent level of risk awareness throughout the company. This is achieved by developing and implementing a risk management process to identify, measure, and control the full spectrum of risks using consistent economic capital measures.
Incorrect
The roles and responsibilities of a Chief Risk Officer vary according to the needs of the organization and the qualifications of the individual. The most important role in instilling a consistent level of risk awareness throughout the company. This is achieved by developing and implementing a risk management process to identify, measure, and control the full spectrum of risks using consistent economic capital measures.
-
Question 7 of 10
7. Question
In view of the fact that a Chief Risk Officer is responsible for maintaining a comprehensive, company-wide perspective to ensure that the various risk strategies are sufficiently diversified. What is expected of a proactive CRO?
Correct
An effective CRO is proactive, focusing not only on current risks but also on future exposures, generating discussion about what levels of risk are acceptable and what actions are needed to mitigate risks. Such a proactive approach necessitates thinking across risk types and performing stress tests. An effective CRO is also a communicator who reports exposures and changes to senior management on a daily basis and inspires enough trust to be actively included in the company’s strategic decision-making processes.
Incorrect
An effective CRO is proactive, focusing not only on current risks but also on future exposures, generating discussion about what levels of risk are acceptable and what actions are needed to mitigate risks. Such a proactive approach necessitates thinking across risk types and performing stress tests. An effective CRO is also a communicator who reports exposures and changes to senior management on a daily basis and inspires enough trust to be actively included in the company’s strategic decision-making processes.
-
Question 8 of 10
8. Question
Which of the options below are the two categories that serve as mechanisms to limit risk-taking? (Select all that applies)
Correct
As for mechanisms to limit risk-taking, they fall into two broad categories, namely:
i) those that affect the general financial and operating environment of SOEs; and
ii) guidelines and instructions regarding the daily management of companies.Incorrect
As for mechanisms to limit risk-taking, they fall into two broad categories, namely:
i) those that affect the general financial and operating environment of SOEs; and
ii) guidelines and instructions regarding the daily management of companies. -
Question 9 of 10
9. Question
Activities of banks have risk inherent in them. As they accept deposits and lend them out or invest these funds in other investment portfolios. The following are the different risks faced by banks except?
Correct
To adequately capture a firm’s risk exposure, risk management should be comprehensive, should represent aggregate exposure of the firm by both firm type and business lines, and should consider both the impact on both earning and shareholder value. There are various types: Operational risk, Reputational risk, Legal risk, The traditional banking risks etc.
Incorrect
To adequately capture a firm’s risk exposure, risk management should be comprehensive, should represent aggregate exposure of the firm by both firm type and business lines, and should consider both the impact on both earning and shareholder value. There are various types: Operational risk, Reputational risk, Legal risk, The traditional banking risks etc.
-
Question 10 of 10
10. Question
Identify the activities/functions of the Compliance and Operational Risk Management Office (Select all that applies)
Correct
The Compliance and Operational Risk Management Office performs two sets of
activities/functions:
a. Assists Senior Management in managing effectively the compliance risks faced by the Bank. To this end, it identifies, assesses, advises on, monitors and reports accordingly on the Bank’s compliance risk,
b. Assists the Bank in managing the operational risk. The office shall identify, assess,
monitor and control/mitigate the operational risk inherent in all material products,
activities, processes and systems.Incorrect
The Compliance and Operational Risk Management Office performs two sets of
activities/functions:
a. Assists Senior Management in managing effectively the compliance risks faced by the Bank. To this end, it identifies, assesses, advises on, monitors and reports accordingly on the Bank’s compliance risk,
b. Assists the Bank in managing the operational risk. The office shall identify, assess,
monitor and control/mitigate the operational risk inherent in all material products,
activities, processes and systems.