CA Foundation Business Economics Questions 2023 - Part 32
Fri, 03 Mar 2023
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CRISC—Certified in Risk and Information Systems Control Certification Questions and answer - Part 25
1. You are the project manager of GHT project. You have identified a risk event on your current project that could save $670,000 in project costs if it occurs. Your organization is considering hiring a vendor to help establish proper project management techniques in order to assure it realizes these savings. Which of the following statements is TRUE for this risk event?
A) This risk event should be accepted because the rewards outweigh the threat to the project.
B) This risk event should be mitigated to take advantage of the savings.
C) This risk event is an opportunity to the project and should be exploited.
D) This is a risk event that should be shared to take full advantage of the potential savings.
2. Which of the following role carriers has to account for collecting data on risk and articulating risk?
A) Enterprise risk committee
B) Business process owner
C) Chief information officer (CIO)
D) Chief risk officer (CRO)
3. Which of the following is NOT true for effective risk communication?
A) Risk information must be known and understood by all stakeholders.
B) Use of technical terms of risk
C) Any communication on risk must be relevant
D) For each risk, critical moments exist between its origination and its potential business consequence
4. Which of the following interpersonal skills has been identified as one of the biggest reasons for project success or failure?
A) Motivation
B) Influencing
C) Communication
D) Political and cultural awareness
5. You are the project manager of the GHY project for your organization. You are working with your project team to begin identifying risks for the project. As part of your preparation for identifying the risks within the project you will need eleven inputs for the process. Which one of the following is NOT an input to the risk identification process?
A) Quality management plan
B) Stakeholder register
C) Cost management plan
D) Procurement management plan
A) This risk event should be accepted because the rewards outweigh the threat to the project.
B) This risk event should be mitigated to take advantage of the savings.
C) This risk event is an opportunity to the project and should be exploited.
D) This is a risk event that should be shared to take full advantage of the potential savings.
2. Which of the following role carriers has to account for collecting data on risk and articulating risk?
A) Enterprise risk committee
B) Business process owner
C) Chief information officer (CIO)
D) Chief risk officer (CRO)
3. Which of the following is NOT true for effective risk communication?
A) Risk information must be known and understood by all stakeholders.
B) Use of technical terms of risk
C) Any communication on risk must be relevant
D) For each risk, critical moments exist between its origination and its potential business consequence
4. Which of the following interpersonal skills has been identified as one of the biggest reasons for project success or failure?
A) Motivation
B) Influencing
C) Communication
D) Political and cultural awareness
5. You are the project manager of the GHY project for your organization. You are working with your project team to begin identifying risks for the project. As part of your preparation for identifying the risks within the project you will need eleven inputs for the process. Which one of the following is NOT an input to the risk identification process?
A) Quality management plan
B) Stakeholder register
C) Cost management plan
D) Procurement management plan
1. Right Answer: D
Explanation: This risk event has the potential to save money on project costs and organization is hiring a vendor to assure that all these saving are being realized. Hence this risk event involves sharing with a third party to help assure that the opportunity take place.Incorrect Answers:A: This risk event is not accepted as this event has potential to save money as well as it is shared with a vendor so that all these savings are being realized.B: The risk event is mitigated when it has negative impacts. But here it is positive consequences (i.e., saving), therefore it is not mitigated.C: This risk event can be exploited but as here in this scenario, it is stated that organization is hiring vendor, therefore event is being shared not exploited.
2. Right Answer: D
Explanation: CRO is the individual who oversees all aspects of risk management across the enterprise. Chief risk officer has the main accountability for collecting data and articulating risk. If there is any fault in these processes then CRO should be answerable.Incorrect Answers:A: Enterprise risk committee are the executives who are accountable for the enterprise level collaboration and consensus required to support enterprise risk management (ERM). They are to some extent responsible for articulating risk but are not accounted for it. They are neither responsible nor accounted for collecting data on risk.B: Business process owner is an individual responsible for identifying process requirements, approving process design and managing process performance. He/ she is responsible for collecting data and articulating risk but is not accounted for them.C: CIO is the most senior official of the enterprise who is accountable for IT advocacy; aligning IT and business strategies; and planning, resourcing and managing the delivery of IT services and information and the deployment of associated human resources. CIO has some responsibility towards collecting data and articulating risk but is not accounted for them.
3. Right Answer: B
Explanation: For effective communication, information communicated should not inundate the recipients. All ground rules of good communication apply to communication on risk. This includes the avoidance of jargon and technical terms regarding risk because the intended audiences are generally not deeply technologically skilled.Hence use of technical terms is avoided for effective communicationIncorrect Answers:A, C, D: These all are true for effective risk communication. For effective risk communication the risk information should be clear, concise, useful and timely. Risk information must be known and understood by all the stakeholders. Information or communication should not overwhelm the recipients. This includes the avoidance of technical terms regarding risk because the intended audiences are generally not much technologically skilled.Any communication on risk must be relevant. Technical information that is too detailed or is sent to inappropriate parties will hinder, rather than enable, a clear view of risk. For each risk, critical moments exist between its origination and its potential business consequence.Information should also be aimed at the correct target audience and available on need-to-know basis. Hence for effective risk communication risk information should be: Clear Concise Useful Timely given Aimed at the correct audience Available on need-to-know basis
4. Right Answer: C
Explanation: Communication has been identified as one of the biggest reasons for why projects succeeds or fails. Effective communication is essential for good project management.Communication is a process in which information is passed from one person to another. A manager asks his subordinates to accomplish the task assigned to them. He should successfully pass the information to his subordinates. It is a means of motivating and guiding the employees of an enterprise.Incorrect Answers:A: While motivation is one of the important interpersonal skill, but it is not the best answer.B: Influencing the project stakeholders is a needed interpersonal skill, but it is not the best answer.D: Political and cultural awareness is an important part of every project, but it is not the best answer for this question
5. Right Answer: D
Explanation: The procurement management plan is not one of the eleven inputs for the risk identification process. The eleven inputs to this process are: risk management plan activity cost estimates activity duration estimates scope baseline stakeholder register cost management plan schedule management plan quality management plan project documents enterprise environmental factors organizational process assets.
Explanation: This risk event has the potential to save money on project costs and organization is hiring a vendor to assure that all these saving are being realized. Hence this risk event involves sharing with a third party to help assure that the opportunity take place.Incorrect Answers:A: This risk event is not accepted as this event has potential to save money as well as it is shared with a vendor so that all these savings are being realized.B: The risk event is mitigated when it has negative impacts. But here it is positive consequences (i.e., saving), therefore it is not mitigated.C: This risk event can be exploited but as here in this scenario, it is stated that organization is hiring vendor, therefore event is being shared not exploited.
2. Right Answer: D
Explanation: CRO is the individual who oversees all aspects of risk management across the enterprise. Chief risk officer has the main accountability for collecting data and articulating risk. If there is any fault in these processes then CRO should be answerable.Incorrect Answers:A: Enterprise risk committee are the executives who are accountable for the enterprise level collaboration and consensus required to support enterprise risk management (ERM). They are to some extent responsible for articulating risk but are not accounted for it. They are neither responsible nor accounted for collecting data on risk.B: Business process owner is an individual responsible for identifying process requirements, approving process design and managing process performance. He/ she is responsible for collecting data and articulating risk but is not accounted for them.C: CIO is the most senior official of the enterprise who is accountable for IT advocacy; aligning IT and business strategies; and planning, resourcing and managing the delivery of IT services and information and the deployment of associated human resources. CIO has some responsibility towards collecting data and articulating risk but is not accounted for them.
3. Right Answer: B
Explanation: For effective communication, information communicated should not inundate the recipients. All ground rules of good communication apply to communication on risk. This includes the avoidance of jargon and technical terms regarding risk because the intended audiences are generally not deeply technologically skilled.Hence use of technical terms is avoided for effective communicationIncorrect Answers:A, C, D: These all are true for effective risk communication. For effective risk communication the risk information should be clear, concise, useful and timely. Risk information must be known and understood by all the stakeholders. Information or communication should not overwhelm the recipients. This includes the avoidance of technical terms regarding risk because the intended audiences are generally not much technologically skilled.Any communication on risk must be relevant. Technical information that is too detailed or is sent to inappropriate parties will hinder, rather than enable, a clear view of risk. For each risk, critical moments exist between its origination and its potential business consequence.Information should also be aimed at the correct target audience and available on need-to-know basis. Hence for effective risk communication risk information should be: Clear Concise Useful Timely given Aimed at the correct audience Available on need-to-know basis
4. Right Answer: C
Explanation: Communication has been identified as one of the biggest reasons for why projects succeeds or fails. Effective communication is essential for good project management.Communication is a process in which information is passed from one person to another. A manager asks his subordinates to accomplish the task assigned to them. He should successfully pass the information to his subordinates. It is a means of motivating and guiding the employees of an enterprise.Incorrect Answers:A: While motivation is one of the important interpersonal skill, but it is not the best answer.B: Influencing the project stakeholders is a needed interpersonal skill, but it is not the best answer.D: Political and cultural awareness is an important part of every project, but it is not the best answer for this question
5. Right Answer: D
Explanation: The procurement management plan is not one of the eleven inputs for the risk identification process. The eleven inputs to this process are: risk management plan activity cost estimates activity duration estimates scope baseline stakeholder register cost management plan schedule management plan quality management plan project documents enterprise environmental factors organizational process assets.
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