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ARM 54 Assignment 5: Questions With Solutions (A+)
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ARM 54 Assignment 5: Questions With Solutions (A+)
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ARM 54 Assignment 5: Questions With Solutions (A+)P-D-C-A Cycle Right Ans - The P-D-C-A Cycle, also known as the Shewhart
cycle and the Deming cycle, is an expansion of an approach to process
improvement. The steps include Plan, Do, Check, and Act
Key performance indicator (KPI) Right Ans - financial or nonfinancial
measurement that defines how successfully an organization is progressing
toward its long term goals
Key risk indicator (KRI) Right Ans - A tool used by an organization to
measure the uncertainty of meeting a strategic business objective.
The fundamental purpose of risk management framework Right Ans - to
integrate risk management throughout the organization. the framework is
intended to support a risk management process. the principle that underlies a
rm framework is that rm should add value. it should not only reduce negative
risk but contribute to profit, reputation, and health and safety.
Risk owner Right Ans - An individual accountable for the identification,
assessment, treatment, and monitoring of risks in a specific environment.
Components of the framework model Right Ans - -lead and establish
accountability
-align and integrate
-allocate resources
-communicate and report
Techniques an organization can use to establish accountability for risk
management Right Ans - -identify risk owners and their roles in the
organization
-establish key performance indicators
-establish key risk indicators and use them to evaluate performance
-develop risk criteria to evaluate the significance of risks
Reporting aspect of the enterprise-wide risk management process Right
Ans - rm framework should include procedures to report info about risks and
the results of rm to appropriate stakeholders. senior management should
receive executive summary reports at regular intervals. more detailed reports
, should be prepared and reviewed by managers regarding risks in their areas
of responsibility. for the rm process to be optimally effective, info about
emerging risks should be included in reports.
Importance of rm policy statement Right Ans - to obtain buy-in from
managers and employees throughout the organization, a clear statement of rm
policy should be present and communicated throughout the organization and
appropriate external stakeholders.
Purpose and process of gap analysis in determining a RM framework Right
Ans - compares an organization's RM framework and process with an
internationally recognized standard thereby allowing the organization to
focus resources on addressing any gaps in its framework. by identifying gaps
in the organization's RM program, the analysis helps eliminate the need to
redesign existing portions of the standard framework.
Evaluation of an organization's internal environment Right Ans - provides
necessary info about the organization for the RM framework. it begins with
the organization's objectives, risk appetite, and strategies and progresses to
risks in different areas of the organization. communication channels and
resources need to be evaluated to determine how to implement the
framework effectively.
Evaluation of an organization's external environment Right Ans - provides
info about the organization's technical capabilities and economic, political,
legal and regulatory, natural and competitive landscapes. RM professionals
should evaluate the external environment for all operations.
Key elements to successful implementation of a RM framework and process
into existing organizational processes Right Ans - align RM objectives and
policy with the organization's overall objectives and risk appetite. use existing
processes
Categories of necessary resources to implement a RM framework and process
Right Ans - -technology including systems and equipment
-administrative persons
-specialists, either internal or external
-analysts
-training
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