CISI-Managing Operational Risk in Financial Institutions
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Question 1 of 10
1. Question
Organizations face rising challenges from non-financial risks— from fraud and abuse to weaknesses in technology and operating errors. Which of the statement from the given statements below describes its subsequent effects?
Correct
Effects may include direct losses, such as fines, litigation, and remediation of compliance lapses, or indirect damage to reputation and the business model of employee misconduct or failure to meet supervisory requirements.
Incorrect
Effects may include direct losses, such as fines, litigation, and remediation of compliance lapses, or indirect damage to reputation and the business model of employee misconduct or failure to meet supervisory requirements.
Question 2 of 10
2. Question
The Financial Conduct Authority (FCA) also considers the robustness and efficacy of governance structures as the foundation for an existing company that manages risk and complies with the regulations. With respect to Governance Culture in Financial Services, what should the internal audit be doing in terms of key elements for the Senior Management function?
Correct
The distribution of the Senior Management Function (SMF), the assigned roles and the appropriateness of the distribution, and whether there are any differences in regulatory requirements and whether the SMFs have generated handover papers.
Incorrect
The distribution of the Senior Management Function (SMF), the assigned roles and the appropriateness of the distribution, and whether there are any differences in regulatory requirements and whether the SMFs have generated handover papers.
Question 3 of 10
3. Question
A firm should set up and retain appropriate systems and controls for managing the operational risks that may arise from employees. In doing so a organization should consider:
Correct
Its organizational risk philosophy and any difference of this or its human resource management activities through its operations (including, for example, the degree to which the policy of conformity is applied to in-house IT staff).
Incorrect
Its organizational risk philosophy and any difference of this or its human resource management activities through its operations (including, for example, the degree to which the policy of conformity is applied to in-house IT staff).
Question 4 of 10
4. Question
A firm should ensure that all workers are able to carry out their operational risk management obligations and be aware of them, including by creating and maintaining:
Correct
Specific policy documents and relevant processes and procedures guides that are easily conveyed to workers and accessible for personnel analysis if appropriate.
Incorrect
Specific policy documents and relevant processes and procedures guides that are easily conveyed to workers and accessible for personnel analysis if appropriate.
Question 5 of 10
5. Question
A firm should not have regard to ensuring that all employees are capable of performing, and aware of, their operational risk management responsibilities in relation to:
Correct
A firm should have regard to ensuring that all employees are capable of performing, and aware of, their operational risk management responsibilities in relation to approved persons, people occupying positions of high personal trust (for example, security administration, payment and settlement functions); and people occupying positions requiring significant technical competence (for example, derivatives trading and technical security administration).
Incorrect
A firm should have regard to ensuring that all employees are capable of performing, and aware of, their operational risk management responsibilities in relation to approved persons, people occupying positions of high personal trust (for example, security administration, payment and settlement functions); and people occupying positions requiring significant technical competence (for example, derivatives trading and technical security administration).
Question 6 of 10
6. Question
Risk management has assumed an even greater position in today’s global economy, as companies are more often exposed to fluctuations in foreign exchange rates. What of the following is perhaps one of the treasury department’s most critical functions?
Correct
In today’s global marketplace, risk management has taken on an even more important role as businesses are more frequently exposed to foreign exchange rate movements. Indeed, liquidity risk management is arguably one of the most important functions of the treasury department.
Incorrect
In today’s global marketplace, risk management has taken on an even more important role as businesses are more frequently exposed to foreign exchange rate movements. Indeed, liquidity risk management is arguably one of the most important functions of the treasury department.
Question 7 of 10
7. Question
With regards to FCA, which of the given steps must be carried out by retail banks, payment institutions and electronic money institutions to enhance their business continuity planning (BCP)?
Correct
Utilise regulatory tools to test the cyber capabilities of high-impact firms, undertake multi-firm supervisory work to better understand the protection measures that firms take against cyber attacks and do further work to understand and assess the approach taken by firms to change management and third party service provider management.
Incorrect
Utilise regulatory tools to test the cyber capabilities of high-impact firms, undertake multi-firm supervisory work to better understand the protection measures that firms take against cyber attacks and do further work to understand and assess the approach taken by firms to change management and third party service provider management.
Question 8 of 10
8. Question
Active Risk Manager (ARM) incorporates health, safety and environmental risk into a standard structure and gathers and retains information about all forms of injuries, accidents and near-misses, relating them to relevant threats, providing a detailed summary of particular initiatives or programs within the organisation. Choose the correct statement with respect to its positions.
Correct
Effective Risk Manager (ARM) Health and Safety operates in tandem with other essential danger sectors, such as Program, Operational and Property Risks, which maintains details about all types of incidents, collisions which near-misses due to potential risks, including a comprehensive overview on particular projects or activities within the company.
Incorrect
Effective Risk Manager (ARM) Health and Safety operates in tandem with other essential danger sectors, such as Program, Operational and Property Risks, which maintains details about all types of incidents, collisions which near-misses due to potential risks, including a comprehensive overview on particular projects or activities within the company.
Question 9 of 10
9. Question
How does the changing world impact risk management within financial services with specific focus on technology?
Correct
The that global influence of financial services risk management with a special emphasis on technology such as technology and cyber risks is a growing field as a professional fight against a continuous wave of threats, fraudsters and criminals.
Incorrect
The that global influence of financial services risk management with a special emphasis on technology such as technology and cyber risks is a growing field as a professional fight against a continuous wave of threats, fraudsters and criminals.
Question 10 of 10
10. Question
It is believed that basic principles for the establishment of comprehensive security and information security management systems are in the information security management organisation:
Correct
Complete separation of management and controlling functions from executive functions, preventing misconduct and maximal limitation of mistakes made by individuals within the area of one-man responsibility, ensuring independence and unbiased character of individuals who carry out security audit, having guaranteed that the company secrets will be kept.
Incorrect
Complete separation of management and controlling functions from executive functions, preventing misconduct and maximal limitation of mistakes made by individuals within the area of one-man responsibility, ensuring independence and unbiased character of individuals who carry out security audit, having guaranteed that the company secrets will be kept.
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