Question

Question 1

1. Which of the following is the most important reason for an organization to use enterprise risk management?

   		To help an organization achieve its strategy through identifying, measuring, and managing the organization's most important risks and opportunities
   		To ensure complete elimination of all risks that the organization may face
   		To eliminate the possibility of the organization's present value of future cash flows being affected by exchange rate fluctuations
   		To help an organization recover the costs incurred to determine whether products and services conform to quality requirements

Question 2

1. After determining risk appetite, enterprise risk management process immediately involves:

   		assessing top risks at the inherent level.
   		managing risks such that the remaining residual risks align with the organization's risk appetite.
   		revaluating the accuracy of the management's risk assessments.
   		identifying the most important risks.

Question 3

1. Which of the following is true of an inherent risk?

   		An inherent risk is the probability or likelihood of a risk occurring multiplied by the impact should it actually occur.
   		An inherent risk is avoided by enacting some particular procedure to decrease the inherent risk to a lower residual risk level.
   		An inherent risk can be defined as the difference between the risk response benefit and the residual risk produced by the particular risk response.
   		An inherent risk is the risk that remains after any risk management action has been taken.

Question 4

1. Which of the following is true of a residual risk?

   		A residual risk is a risk that exists absent of any risk management action to reduce or avoid the risk.
   		A residual risk is a risk that can be avoided by enacting some particular procedure to decrease the residual risk to a lower inherent risk level.
   		A residual risk is a risk that remains after any risk management action has been taken.
   		A residual risk is the probability or likelihood of a risk occurring multiplied by the impact should it actually occur.

Question 5

1. Which of the following is true of stakeholder engagement?

   		It is the area within the business sustainability cycle that immediately follows sustainability reporting.
   		Stakeholder engagement is the area within the business sustainability cycle that immediately follows performance measurement.
   		Stakeholder engagement varies from casual, impromptu, informal conversations all the way to regular, structured interactions.
   		It is not possible to quantify the results of stakeholder engagement activities.

Question 6

1. Business sustainability is valuable because:

   		it improves decision-making by managers.
   		it enables organizations to please all key stakeholders all the time.
   		it enables organizations to eliminate all the risks they may face.
   		it ensures complete elimination of stakeholder concerns.

Question 7

1. Which of the following is true of corporate sustainability reporting?

   		Corporate sustainability reporting is synonymous with traditional financial reporting.
   		Corporate sustainability reporting must adhere to generally accepted accounting principles.
   		Corporate sustainability reporting is required to have the report contents verified by an independent third party.
   		Corporate sustainability reporting is voluntary in nature.

Question 8

1. Which of the following is the most significant benefit of having a corporate sustainability report (CSR) assured by an independent third party?

   		The assurance will enable management to address all stakeholder concerns with equal priority.
   		The assurance will enable the organization to eliminate all the risks it may face.
   		The assurance will enable people to trust the CSR's content for external stakeholders more easily.
   		The assurance will provide exemption to an organization from filing annual reports.

Answer 1

Answer 1 - Enterprise risk management is the process and methods used by the organisation to manage risk and to ultimately achieve its objective. The answer to this is point number 1 i.e To help an organization achieve its strategy through identifying, measuring, and managing the organization's most important risks and opportunities.

Answer 2 - The objective of Risk management is to assess the risk bearing capacity of the organisation and to manage the risk in such a way that it is only left with its risk bearing managing appetite. The answer to this is point number 2 i.e managing risks such that the remaining residual risks align with the organization's risk appetite.

Answer 3 - Inherent Risk is susceptibility of an assertion about account balance, class of transaction, disclosure towards misstatement which may be material either individually or in aggregate with other misstatement while assuming there is no system of internal control. The answer to this is point number 1 i.e An inherent risk is the probability or likelihood of a risk occurring multiplied by the impact should it actually occur.

Answer 4 - Residual risk is a risk that is left after identifying & managing risk faced by the entity. The answer to this is point number  3 i.e A residual risk is a risk that remains after any risk management action has been taken.

Answer 5 - stakeholder engagement is a process in which organisation involves people who will affected by the decisions of the organisation. And stakeholder simply means all the person who have interest in the organisation i.e owners, lenders, employees, government etc. The answer to this is point no. 2 i.e Stakeholder engagement is the area within the business sustainability cycle that immediately follows performance measurement.

Answer 6 - Business sustainability is a process to manage financial, social, environmental risk, obligations and opportunities. business sustainability is closely related with Triple Bottom Line Reporting. The answer to this is point number 1 i.e it improves decision-making by managers.

Answer 7 - corporate sustainability reporting is organisational report that gives information about economic, environmental, Social and governance performance. Its audit is mandatory by an independent auditor or third person. The answer to this is point number 3 Corporate sustainability reporting is required to have the report contents verified by an independent third party.

Answer 8 - the most significant benefit of having a corporate sustainability report (CSR) assured by an independent third party is that it will be easily trusted by outsiders as audit will give them a assurance about the true and fairness of report. The answer to this should be point number 3 i.e The assurance will enable people to trust the CSR's content for external stakeholders more easily.