Free ORM Certificate – 2023 Update Exam 8020 Exam Practice Test

The acronym ESG can stand for:

• Environmental. Strategy, and corporate Governance.
• Environmental. Social and corporate Governance.
• Enhanced Social Governance.
• Extra Social Governance.

In order for a KRI to be effective it must be:Incorrect – Governance focuses on high-level corporate oversight, not day-to-day operations.Incorrect – Governance is broader than just regulatory reporting.Incorrect – Governance and management are separate but complementary; governance provides oversight, while management executes strategy.

• Quantitative and Qualitative. Consistent. Efficient & Repeatable.
• Qualitative, Consistent Efficient & Repeatable.
• Quantitative, Consistent and Comparable. Efficient & Repeatable
• Quantitative, Repeatable and Efficient.

Which of the following principles best applies to a compliance function?

• The compliance function should report to the business (even when following a three lines of defense model).
• The compliance function should be independent of the business (following a three lines of defense model).
• The compliance function should be outsourced if there is a risk function.
• The risk function should be outsourced if there is a compliance function.

For credit risk losses containing operational risk elements that have been historically included in an organizations' credit risk database how should the loss amount be treated?

• The entire loss amount is treated as credit risk
• The entire loss amount is treated as operational risk.
• The loss amount is split into credit and operational risk components.
• The entire loss amount is treated as credit risk, but the loss is entered as a memorandum within
• the operational loss database and not used for capital modeling purposes.

In relation to financial crime. OFAC is a definition for which organization?

• Office of Financial Asset Control.
• Office of Foreigner and other Control.
• Office for Asset Control.
• Office of Foreign Asset Control.

Which of the following is not the purpose or benefit of a Risk Appetite statement?

• Risk management standards and resources are likely to be improved.
• The governing body articulates its expectations.
• Establishes the maximum risk that the organization can stand.
• Assists with Strategic discussions.

Governance can be defined as which of the following?

• Governance is a structure specifying the daily operation of a firm.
• Governance is a structure specifying the ways in which reporting is made to the primary regulator.
• Governance is being replaced by management in all firms that are regulated.
• Governance is a structure specifying the policies, principles, and procedures for making decisions about corporate direction.

Which of the Basel Accords, published in 2004, introduced operational risk as a risk subjected to a capital charge?

• Basel I
• Basel II
• Basel III
• Basel IV

Compliance departments traditionally provide policy, oversight, and set the standards for monitoring personal dealing. Which control below would assist in implementing such policies?

• A list of approved suppliers that have been added to the outsourcing policy.
• Outsourcing of the policy writing to an accounting firm at least once every 5 years.
• Watch lists of stocks that are not allowed to be traded for a period of time, for instance, ahead of a securities offering that the firm is managing.
• Outsourcing of the policy writing to an accounting firm at least once every 3 years.

In the Basel III standardized approach for operational risk, what is the Business Indicator?

• It is a proxy for operational risks that relate to near-miss events.
• It is a non-financial-statement-based proxy for operational risk.
• It is a scaling factor that is based on a bank's average historical losses.
• It is a financial-statement-based proxy for operational risk.