PECB ISO-31000-Lead-Risk-Manager Practice Test Questions Answers

The correct answer is C. Managers reporting and escalating risks within the organization. ISO 31000 defines stakeholders as persons or organizations that can affect, be affected by, or perceive themselves to be affected by a decision or activity. Stakeholders can be internal or external, depending on their relationship with the organization.

Internal stakeholders are individuals or groups within the organization, such as employees, managers, executives, and internal committees. In the scenario provided, managers who report and escalate risks are clearly internal stakeholders, as they are directly involved in organizational processes and decision-making.

Option A, shareholders, are typically considered external stakeholders, as they are not involved in daily operations, even though they have a strong interest in performance. Option B, customers, are also external stakeholders concerned with outputs rather than internal processes. Option D, regulators, are external stakeholders representing legal and regulatory interests.

ISO 31000 emphasizes the importance of inclusiveness, requiring organizations to involve both internal and external stakeholders appropriately. Internal stakeholders play a critical role in risk identification, analysis, reporting, and treatment because of their proximity to operations and decision-making.

From a PECB ISO 31000 Lead Risk Manager perspective, correctly identifying internal stakeholders supports effective communication, accountability, and integration of risk management into everyday activities.

The correct answer isA. To create and protect value. ISO 31000:2018 explicitly states that thepurpose of risk management is the creation and protection of value. This principle is foundational and underpins all other aspects of the risk management framework and process. According to ISO 31000, risk management improves performance, encourages innovation, and supports the achievement of objectives by addressing uncertainty in a structured and informed manner.

ISO 31000 does not define risk management as a mechanism to eliminate all risks. On the contrary, it recognizes that risk-taking is often necessary to pursue opportunities and create value. Attempting to eliminate all risks would be impractical and could hinder innovation, strategic growth, and operational effectiveness. Therefore, option B is incorrect.

Similarly, while compliance with legal and regulatory requirements is an important consideration within risk management, ISO 31000 clearly emphasizes that compliance isnot the sole purposeof risk management. Risk management applies to all types of objectives—strategic, operational, financial, reputational, environmental, and social—and goes beyond regulatory compliance alone. Hence, option C is incomplete and incorrect.

ISO 31000 also acknowledges that uncertainty is inherent in organizational activities and decision-making. Risk management does not aim to remove uncertainty, but rather tounderstand, assess, and manage itin a way that supports informed decisions. Therefore, option D is incorrect.

From a PECB ISO 31000 Lead Risk Manager perspective, understanding that the ultimate purpose of risk management is value creation and protection is essential. This principle ensures that risk management is integrated into governance, strategy, and operations, supporting sustainable success rather than acting as a purely defensive or compliance-driven function.

The correct answer isA. The objectives of the risk management process. ISO 31000:2018 emphasizes that settingobjectivesis a critical part of initiating the risk management process. Objectives define what the organization intends to achieve through risk management and provide a basis for evaluating performance and effectiveness.

In the scenario, NovaCare’s top management and Daniel clearly articulatedmeasurable and time-bound targets, such as reducing minor system outages by 50% within one year and achieving full coverage of security monitoring tools across all critical IT systems. These statements describe desired outcomes aligned with organizational goals, including uninterrupted healthcare services, regulatory compliance, and patient data protection. According to ISO 31000, such statements are characteristic of objectives, as they guide risk identification, analysis, evaluation, and treatment.

Thescopeof the risk management process would define boundaries such as organizational units, activities, locations, or timeframes to which the process applies. While the scenario mentions critical IT systems, the focus of the question is onwhat they decided to achieve, not where or to whom the process applies.

Thethreshold of risk acceptancerelates to risk criteria and tolerance levels, which determine what level of risk is acceptable. Although the targets imply performance expectations, they do not define acceptance thresholds for individual risks.

From a PECB ISO 31000 Lead Risk Manager perspective, clearly defining objectives ensures alignment between risk management activities and strategic priorities and enables effective monitoring and review. Therefore, the correct answer isthe objectives of the risk management process.

The correct answer isA. By developing and communicating a clear policy that expresses the organization’s objectives and commitment to risk management. ISO 31000:2018 places strong emphasis onleadership and commitmentas a foundational element of the risk management framework. Top management and oversight bodies are expected to demonstrate commitment by establishing direction, ensuring alignment with organizational objectives, and visibly supporting risk management activities.

ISO 31000 explicitly states that leadership commitment should be demonstrated through actions such asissuing a risk management policy, allocating resources, assigning responsibilities, and ensuring integration of risk management into governance and decision-making. A clearly communicated policy provides a common understanding of the organization’s approach to risk, reinforces expectations, and promotes consistent behavior across all levels.

Option B is incorrect because ISO 31000 does not advocate avoiding documentation. While flexibility is important, formal documentation such as policies and frameworks is necessary to ensure clarity, consistency, and accountability. Option C is incorrect because reliance on external experts does not replace leadership responsibility; risk management accountability remains with the organization. Option D is also incorrect, as delegation without leadership involvement contradicts ISO 31000’s emphasis on top management responsibility.

From a PECB ISO 31000 Lead Risk Manager perspective, visible and documented commitment by leadership is essential for embedding risk management into organizational culture and operations. Therefore, option A is correct.

The correct answer isC. Key drivers and trends affecting the objectives of the organization. ISO 31000:2018 requires organizations to establish theexternal contextas part of the risk management process. The external context includes external factors that influence the organization’s ability to achieve its objectives.

According to ISO 31000, examining the external context involves analyzing political, economic, social, technological, legal, environmental, and market-related factors. These are often referred to askey drivers and trends, such as regulatory changes, economic conditions, market dynamics, and technological developments.

Option A relates to internal governance and methodological choices rather than the external environment. Option B, contractual relationships, may involve external parties but are generally considered part of the organization’s internal context when they relate to internal obligations and arrangements. Option D clearly refers to internal context elements.

From a PECB ISO 31000 Lead Risk Manager perspective, understanding external drivers and trends is essential for anticipating emerging risks and opportunities and for setting appropriate risk criteria. Therefore, the correct answer iskey drivers and trends affecting the objectives of the organization.