D373 Marketing in the Digital Era - Set 3 - Part 1

Correct Answer: To recognize and document potential risks that could affect the organization

Risk identification is the process of recognizing and documenting risks that could impact the organization's objectives.

Correct Answer: A risk that exists before any mitigation actions are taken

Inherent risk refers to the level of risk before any controls or risk mitigation strategies are applied.

Correct Answer: To track how risks evolve and ensure mitigation strategies remain effective

Continuous monitoring helps ensure that risks are being managed effectively and adjustments are made as necessary.

Correct Answer: To ensure that stakeholders are informed about risks and the steps taken to manage them

Effective risk communication ensures that all stakeholders are aware of the risks and how the organization is managing them.

Correct Answer: Risk identification

Risk identification is the initial step in the risk management process, where potential risks are recognized and documented.

Correct Answer: To reduce the likelihood and impact of risks on the organization

Risk mitigation involves taking steps to minimize the probability and impact of risks on the organization.

Correct Answer: A change in market demand for a company’s product

Strategic risks are those that affect the overall direction of an organization, such as changes in market demand or competitive dynamics.

Correct Answer: It ensures there is a record of identified risks and the actions taken to address them

Proper documentation helps ensure accountability and provides a clear record of how risks were managed.

Correct Answer: Risk appetite defines the level of risk an organization is willing to accept, while risk tolerance measures the range within which risks are acceptable

Risk appetite is the overall level of risk an organization is willing to accept, while risk tolerance refers to the acceptable variance around that level.

Correct Answer: It provides a structured approach to identifying, assessing, and managing risks

A risk management framework ensures that risks are addressed systematically and consistently across the organization.

Correct Answer: To provide information on risks to decision-makers and stakeholders

Risk reporting ensures that relevant parties are informed about the risks and the organization’s approach to managing them.

Correct Answer: To assess the impact of various possible future events on the organization

Scenario analysis allows organizations to prepare for different potential risk scenarios and develop appropriate responses.

Correct Answer: A risk that remains after risk mitigation strategies have been implemented

Residual risk is the amount of risk that remains even after mitigation measures have been applied.

Correct Answer: The person accountable for monitoring and managing a specific risk

A risk owner is assigned responsibility for overseeing and managing a particular risk.

Correct Answer: A risk arising from day-to-day operations and processes within an organization

Operational risks stem from internal processes, such as system failures, human errors, or fraud.

Correct Answer: To implement measures that reduce the likelihood or impact of risks

Risk controls are actions taken to reduce the probability and severity of risks.

Correct Answer: By combining multiple risks to understand their collective impact on the organization

Risk aggregation allows organizations to assess how different risks interact and affect the overall risk profile.

Correct Answer: To ensure that risk management supports the achievement of the organization’s goals

Aligning risk management with business objectives ensures that risks are managed in a way that contributes to the organization’s success.

Correct Answer: A measure that tracks how well risks are being managed

KPIs in risk management help monitor the effectiveness of risk management practices.

Correct Answer: By providing predefined actions to take in response to potential risk events

Contingency plans outline the steps to follow when risks materialize, helping to mitigate their impact.