Chapter 2 Standards And Guidelines Flashcards Preview

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Flashcards in Chapter 2 Standards And Guidelines Deck (30):
1

Risk management standard defined

Document published by a recognized authority that includes principal’s criteria and best practises for risk management

2

Risk management framework is?

Structure including elements such as concepts methods procedures and metrics that supports the risk management process

3

Generic risk management framework would include?

Alignment integration communication and reporting

4

The common elements of risk management standards are

To implement a successful risk management program and organization must select the standard that will align with the organizations mission values objectives and corporate structure

5

There are several similarities in the standards and frameworks and they are?

Adoption of enterprise approach, structured process steps, understanding of an accountability of defining risk appetite, formal documentation of risks in risk assessment activities, establishment and communication of risk management process goals and activities, monitored treatment plans.

6

Frameworks and standards provide the organization with what

They provide the organization by identifying analyzing responding to an monitoring risks such as threats and opportunities within the internal and extra no context in which it operates.

7

Iso 31000:2009 describes risk management standards as?

They provide an international standard for risk management as well as a generic approach to risk management within an industry sector and it consists of three major parts principles rooted in risk management and designed to generate a value and continuously scan and react to the environment.
Framework elements based on program design implementation and monitoring.
Processes emphasis on deliberative communication context risk assessment treatment and follow-up.

8

COSO ERM Defines a risk management standards as?

As a process driven from an organizations Board of Directors that establishes an organization, Wide strategy to manage risk with units appetite. They focus on threats to the organization and application of controls. Does not delve into the details of risk management approaches and processes.

9

BS 31100 defines Risk management strategies as?

Published by British standards institution as a code of practice for risk management they provide recommendations for the model framework process and implementation of risk management therefore primary goals are ensuring that an organization achieves its objectives. Ensuring the risks are managed in specific areas or activities. Overseeing risk management in an organization Providing a reasonable assurance on an organizations risk management.

10

FERMA 2002 Defines risk management standards as?

Adopted by the Federation of European risk management associations. Recognizes that risk has both an upside and a downside. Standard has these elements: establishment of consistent terminology. Process by which risk management can be executed. Organize risk management structure. Risk management goals.

11

OCEG Red book Defines risk management standards as?

The open compliance and ethics group approach include integration of governance risk and compliance process is relies on the integrated technology platform try to identify and assess risk.

12

Basel 11 Defines risk management standards as

Issued by the basel community on banking supervision to provide recommendations on banking laws and regulation. Basel 11 is the regulation rather than a standard. Establishes risk and capital management rules.

13

Solvency 11 Defines risk management standards as?

Developed by the European commission to provide regulatory requirements for insurance firms that operate in the European Union. Solvency 11 is a regulation rather than a standard.

14

Management society rims has developed a risk maturity model to provide such a tool. the risk maturity model is not a standard or a prescribed process or framework it focusses on seven essential attributes what are they?

ERM based approach, ERM process management, risk appetite management, root cause discipline, uncovering risks, performance management, business resiliency and sustainability.

15


What is ISO?

It is a non-governmental group its membership consists of the national standards institute of 163 countries some of which are government entries but others are private sector

16

What is the scope of ISO 031000?

The standard can be applied to all operations and most activities of the organization and any type of risk including hazard operational financial and strategic risks

17

There are 11 types of ISO 31000 Principles of risk management what are they?

Creates value, integral part of organizational processes, part of the decision-making, explicitly addresses uncertainty, systematic structured and timely, based on the best of available information, tailored, takes human and cultural factors into account, transparent and inclusive, dynamic iterative and responsive to change, facilitates continual improvement and enhancements for the organization.

18

What are the qualities of affective risk management include?

Protecting organizational values, informed decision making, and dealing with uncertainty

19

What is risk management framework?

Risk management framework is a foundation for applying the risk management process throughout the organization.

20

What is risk criteria?

Risk criteria is information used as a basis for measuring the significance of a risk

21

What is inherent risk?

Inherent risk is an Entity apart from any action to alter either the likelihood or impact of the risk.

22

What is residual risk?

Residual risk is risk remaining after actions to alter the risks likelihood or impact.

23

COSO Risk management says there is a relationship of objectives and components how does this work?

COSO says there is a direct relationship between objectives with which an organization strives to achieve and risk management components which are necessary to achieve them they are based on strategic operations reporting and compliance

24

COSO internal environment includes?

Objective setting, event identification, risk assessment, risk response, control activities, information and communication, and monitoring.

25

Risk based capital is?

The amount of capital and ensure needs to support its operations given the insurers risk characteristics

26

What does solvency ll aim to achieve?

Market consistent balance sheet, risk based capital, own risk insolvency assessment, senior management accountability, and supervisory assessment.

27

What are the three pillars of solvency ll ?

Pillar one covers all the financial requirements and aims to ensure firms are adequately capitalized with risk based capital. Pillar to impose it higher standards of risk management and governance within an organization and give supervisors greater powers to challenge their firms on risk management issues. Pillar three is the pillar that aims for greater levels of transparency for supervisors and the public there’s a private annual report by insurers as to supervisors and a publicly solvency and financial condition report.

28

When did Basel lll occur and what are the measures of its reform?

The reform measures improve the banking sector‘s ability to absorb shocks arising from financial and economic stress whatever the source. Improve risk management and governance. Strengthen banks transparency and disclosures.

29

The Basel Committee states that risk management encompasses which processes?

Identifying risks to a bank, measuring exposures to those risk where possible, ensuring that an effective Capital planning and monitoring program is in place, monitoring risk exposure is in corresponding capital needs on ongoing basis, taking steps to control or mitigate risk exposures and reporting to senior management and the board of the banks risk exposure and capital positions.

30

Basel lll risk management Standard consist of 11 principles what are they?

Principal 1 the Board of Directors should take the lead and establishing strong risk management culture
principle 2 bank should not develop implement and maintain framework that is fully integrated into the banks overall risk management process
principal 3 the Board of Directors should establish approved and periodically review the framework
principal 4 the Board of Directors and approve and review a risk appetite and tolerance statement for operational risk and articulate the nature and types of levels of operational risk that they’re willing to assume
principal 5 senior management should develop for approval by the Board of Directors a clear affective and robust government structure structure and well-defined transparent and consistent lines of responsibility
principal 6 senior management should ensure the identification and assessment of operational risk inherent in all material products actions and processes and systems to make sure that the inherent risks and incentives are Well understood
principal 7 senior management should ensure that the there is an approval process for all new products activities processes and systems and fully assess operational risk
principal 8 senior management should implement a process to regularly monitor operational risks profiles and material exposures to losses
principal 9 bank should have a strong control environment that utilizes policies processes and systems appropriate internal controls and appropriate risk management and transfer strategies
principal 10 bank should have business resiliency and continuity plans in place to ensure an ability to operate an ongoing basis and limit losses in the event of severe business disruption
principal 11 a banks public disclosure should allow stakeholders to assess its approach to operational risk management.