ISO-31000-Lead-Risk-Manager PECB ISO 31000 Lead Risk Manager Free Practice Exam Questions (2026 Updated)

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.

The correct answer isA. By identifying points to monitor and control critical risks in the process. Although HACCP originated in the food industry, its principles are applicable to many other sectors because it provides asystematic and preventive approachto identifying, evaluating, and controlling risks within processes.

HACCP focuses on identifyingcritical control points (CCPs)—specific stages in a process where controls can be applied to prevent, eliminate, or reduce risks to acceptable levels. This aligns closely with ISO 31000’s emphasis on proactive risk identification, analysis, and treatment. Outside the food industry, HACCP principles can be applied to manufacturing, healthcare, logistics, and energy sectors to manage operational, safety, and quality-related risks.

Option B refers to quality management practices, not risk-focused controls. Option C describes monitoring after completion, whereas HACCP emphasizespreventive control during the process. Option D is incorrect because HACCP complements, rather than replaces, risk assessment.

From a PECB ISO 31000 Lead Risk Manager perspective, HACCP demonstrates how structured methodologies can be adapted across industries to control critical risks at key points, thereby supporting resilience and value protection. Therefore, the correct answer isidentifying points to monitor and control critical risks.

The correct answer isB. Yes, organizations need to calculate the EMV of the identified negative risks only. ISO 31000 does not mandate specific quantitative techniques but allows organizations to use appropriate methods to analyze risk, provided they support informed decision-making. Expected Monetary Value (EMV) is a commonly used quantitative technique for analyzingnegative (downside) risks, particularly where financial impacts can be reasonably estimated.

In Scenario 4, Solenco applied EMV appropriately by combining the probability of failure with the estimated financial consequences. This provided a clear, comparable metric for prioritizing the inverter failure risk relative to other risks in the risk register. ISO 31000 supports such proportional and context-appropriate analysis.

Option A is incorrect because not all risks require EMV calculation; the technique should be applied selectively based on relevance and materiality. Option C is incorrect because ISO 31000 does not prohibit point-in-time quantitative techniques; instead, it encourages combining them with monitoring and review. Option D is incorrect, as EMV is widely used across industries, not only in finance.

From a PECB ISO 31000 Lead Risk Manager perspective, EMV is acceptable and useful for analyzing significant financial risks when assumptions are transparent and results are reviewed regularly. Therefore, the correct answer isYes, organizations need to calculate the EMV of the identified negative risks only.

The correct answer is A. Risk identification. ISO 31000:2018 defines risk identification as the process of finding, recognizing, and describing risks that could affect the achievement of objectives. Techniques such as structured interviews, brainstorming workshops, and expert consultations are explicitly recognized as appropriate methods for identifying risks.

In Scenario 3, Daniel and the team used structured interviews and brainstorming workshops to gather potential risk events across departments. This activity resulted in identifying key risks such as data breaches, record-keeping errors, and regulatory noncompliance. These outcomes clearly demonstrate risk identification rather than analysis or evaluation.

Risk analysis would involve understanding the nature of risks, including their causes, likelihood, and consequences. While the team later performed cause-and-effect analysis, the specific activity described in this question focuses on collecting and listing risk events, which is the core objective of risk identification.

From a PECB ISO 31000 Lead Risk Manager perspective, effective risk identification is critical for ensuring that significant risks are not overlooked and that subsequent analysis and treatment are meaningful. Therefore, the correct answer is risk identification.

The correct answer isC. Epistemic uncertainty. ISO 31000:2018 defines risk as theeffect of uncertainty on objectivesand emphasizes that uncertainty can arise from limitations in knowledge, availability of information, data quality, and understanding of complex situations. Epistemic uncertainty specifically relates toincomplete, inaccurate, or unreliable information, and unlike inherent variability, it can be reduced through better information, learning, and analysis.

In the Gospeed Ltd. scenario, the most critical issue was the lack of reliable information to anticipate operational delays, equipment failures, and regulatory changes. Unreliable customs data, insufficient insight into regulatory developments, and overlooked feedback from operational staff demonstrate clear knowledge gaps. These conditions directly correspond to epistemic uncertainty as described in ISO 31000, which stresses that risk management should bebased on the best available information, while explicitly acknowledging its limitations.

Aleatory uncertainty is not applicable, as it refers to inherent randomness or natural variability, such as weather conditions, which cannot be reduced through improved knowledge. In contrast, Gospeed’s uncertainty could have been mitigated through improved data quality, stronger communication channels, and effective consultation with stakeholders.

Decision uncertainty is also incorrect, as it relates to uncertainty arising from choosing among alternatives rather than from information deficiencies. Although management made poor decisions by ignoring operational concerns, the root cause of the problem was theinformation gap, not the act of decision-making itself.

ISO 31000 further highlights the importance of inclusiveness, communication, and consultation to reduce uncertainty and support informed decision-making. Gospeed’s failure to adequately address epistemic uncertainty weakened the integration of risk management into daily operations, ultimately resulting in delivery delays and financial penalties. Therefore, from a PECB ISO 31000 Lead Risk Manager perspective, the uncertainty faced by Gospeed is clearlyepistemic uncertainty.

The correct answer isA. Evaluating potential outcomes, stakeholder perspectives, future uncertainties, and the organization’s tolerance for risk. ISO 31000 emphasizes that risk management supportsdecision-makingby providing structured information about uncertainty, consequences, and trade-offs.

Effective decision-making requires considering not only potential outcomes but also stakeholder expectations, the organization’s risk appetite and tolerance, and uncertainties related to future conditions. This holistic view ensures decisions are aligned with objectives and values while balancing opportunities and threats.

Option B is too narrow and contradicts ISO 31000’s value-based approach. Option C ignores the fact that avoiding change may itself increase risk. Option D undermines accountability and leadership responsibility.

From a PECB ISO 31000 Lead Risk Manager perspective, informed decisions depend on integrating risk considerations into strategy and operations. Therefore, the correct answer isevaluating outcomes, stakeholders, uncertainties, and risk tolerance.

The correct answer isB. Risk management plan. ISO 31000:2018 explains that once leadership commitment and context are established, organizations mustdesign and implement the risk management frameworkthrough structured and coordinated actions. A risk management plan translates strategic intent intopractical, actionable stepsthat enable the integration of risk management into everyday operations.

In the scenario, Luca outlined concrete actions such as stakeholder engagement, breaking the process into stages, aligning objectives with organizational goals, tracking progress through existing systems, defining responsibilities, allocating resources, and establishing communication, reporting, and escalation mechanisms. These elements collectively describe arisk management plan, which specifieshowrisk management will be implemented, monitored, and improved across the organization.

Arisk management policyis typically a high-level statement expressing top management’s commitment, principles, and overall direction regarding risk management. While leadership demonstrated commitment in the scenario, Luca’s activities went beyond policy formulation and focused on execution.

Arisk treatment planis developed later in the risk management process and focuses specifically on actions to modify individual risks. In Scenario 2, Luca’s work addressed theframework and integration level, not the treatment of specific risks. A risk register, likewise, is a recording tool and not a set of actions.

From a PECB ISO 31000 Lead Risk Manager perspective, developing a risk management plan is a critical step in ensuring that risk management is integrated, structured, and sustainable. Therefore, the correct answer isrisk management plan.

The correct answer isC. Structured What-If Technique (SWIFT). SWIFT is a facilitated, structured risk identification technique that usesguidewords and promptssuch as “what if…?” and “how could…?” to stimulate discussion and identify potential risks, causes, consequences, and existing controls.

In the scenario, the facilitator explicitly used guidewords and open-ended prompts during a workshop, which is characteristic of SWIFT. ISO 31010, which complements ISO 31000, describes SWIFT as a flexible and collaborative technique suitable for workshops and group discussions, particularly when time or resources are limited.

Checklists and taxonomies rely on predefined lists rather than interactive questioning. FMEA focuses on identifying failure modes and their effects in a systematic, often component-level analysis, rather than open-ended facilitated discussion. The Delphi technique uses anonymous expert surveys conducted in multiple rounds, which does not match the described workshop format.

From a PECB ISO 31000 Lead Risk Manager perspective, SWIFT is especially useful for early-stage risk identification and for engaging cross-functional stakeholders. Therefore, the correct answer isStructured What-If Technique (SWIFT).

The correct answer isB. The reliance on previous occasions that one has been a part of when trying to predict a future event. Availability bias is a cognitive bias where individuals assess the likelihood of events based on how easily examples come to mind, often influenced by personal experience, recent events, or vivid memories.

In risk management, availability bias can distort risk perception by causing individuals to overestimate risks they have personally experienced or recently encountered, while underestimating less familiar but potentially significant risks. ISO 31000 emphasizes that risk management should besystematic, evidence-based, and inclusive, precisely to reduce the influence of cognitive biases.

Option A describes emotional discomfort rather than a cognitive bias. Option C refers more closely to anchoring bias, where decisions are overly influenced by a single reference point. Option D describes social loafing, not availability bias.

From a PECB ISO 31000 Lead Risk Manager perspective, recognizing availability bias is essential to ensure objective risk identification and analysis. Structured techniques, data analysis, and diverse stakeholder involvement help mitigate this bias. Therefore, the correct answer isreliance on previous occasions when predicting future events.

The correct answer isC. Number of suspended transactions. Regulatory risk indicators are metrics that signal potentialnoncompliance with laws, regulations, or regulatory expectations.

The number of suspended transactions often reflects regulatory controls being triggered due to suspected violations, noncompliant activities, or breaches of regulatory thresholds. An increase in suspended transactions can indicate heightened regulatory exposure, control weaknesses, or emerging compliance issues, making it a clearregulatory KRI.

Option A (increasing days in accounts receivable) is primarily a financial or credit risk indicator. Option B (employees’ compensation claims) relates mainly to health, safety, or operational risk. Option D (production efficiency rate) is a performance indicator rather than a regulatory risk indicator.

ISO 31000 emphasizes the use of KRIs to provideearly warning signalsand support timely corrective action. From a PECB ISO 31000 Lead Risk Manager perspective, regulatory KRIs play a critical role in compliance oversight and governance assurance. Therefore, the correct answer isNumber of suspended transactions.

The correct answer is A. Risk cannot be justified except in extraordinary circumstances. In ISO 31000-aligned risk evaluation frameworks, risks are commonly categorized into regions such as intolerable, tolerable, and acceptable based on predefined risk criteria.

Risks in the intolerable region exceed the organization’s risk appetite and tolerance. ISO 31000 emphasizes that such risks require immediate treatment, including avoidance or significant reduction. Accepting intolerable risks would contradict the principle of protecting and creating value.

Option B describes the ALARP (As Low As Reasonably Practicable) principle, which applies to the tolerable region, not the intolerable region. Option C oversimplifies decision-making and ignores risk appetite boundaries. Option D contradicts ISO 31000, as monitoring alone is insufficient for intolerable risks.

From a PECB ISO 31000 Lead Risk Manager perspective, intolerable risks demand decisive action and cannot be accepted as part of normal operations. Therefore, the correct answer is risk cannot be justified except in extraordinary circumstances.

The correct answer is A. Functional structure. In the scenario, Bambino’s organizational structure is described as having company units overseen by directors responsible for strategic, administrative, and operational matters within their respective areas. This indicates a traditional functional structure, where responsibilities are grouped by function and authority flows vertically through defined managerial roles.

A functional structure typically organizes the company around key business functions such as operations, administration, finance, and production. Each function is managed independently, with directors overseeing decision-making within their domain. This structure aligns with the description provided in Scenario 2, where Luca reviewed how responsibilities and decision-making were distributed across units managed by directors with broad functional accountability.

A divisional structure would involve separate divisions based on products, markets, or geographic regions, each operating semi-independently. This is not indicated in the scenario, as Bambino operates as a single integrated manufacturer specializing in daycare furniture. A matrix structure would involve dual reporting lines (e.g., functional and project-based), which is also not described.

From an ISO 31000 perspective, understanding the organizational structure is part of establishing the internal context, which is essential for designing and integrating an effective risk management framework. The functional structure influences how responsibilities are assigned, how communication flows, and how risk management is embedded into daily operations. Therefore, the correct answer is functional structure.

The correct answer isC. Guidelines for managing an emerging risk faced by an organization. ISO/TS 31050 is a technical specification that complements ISO 31000 by providingguidance on identifying, assessing, and managing emerging risks, which are risks that are evolving, uncertain, and not yet fully understood.

Emerging risks are characterized by high uncertainty, limited historical data, and potentially significant impacts. ISO/TS 31050 supports organizations in strengthening resilience by enhancing foresight, early detection, and adaptive decision-making. This aligns closely with ISO 31000’s emphasis on adynamic, iterative, and forward-lookingapproach to risk management.

Option A is incorrect because guidelines on the selection and application of risk assessment techniques are provided byISO/IEC 31010, not ISO/TS 31050. Option B is also incorrect, as basic vocabulary related to risk management is covered byISO Guide 73, which defines key risk management terms used across ISO standards.

Option D is incorrect because ISO/TS 31050 does not prescribe requirements for establishing a risk management framework. ISO 31000 itself provides guidance on principles, framework, and process, while ISO/TS 31050 focuses specifically on the challenge of emerging risks within that broader framework.

From a PECB Lead Risk Manager standpoint, ISO/TS 31050 is particularly relevant in environments characterized by rapid change, technological disruption, regulatory evolution, and geopolitical uncertainty. It reinforces the ISO 31000 principle that risk management should anticipate, detect, acknowledge, and respond to change in a timely manner.

The correct answer is A. Only if the risk level meets the risk acceptance criteria and no additional controls are required. ISO 31000 recognizes risk retention as a legitimate risk treatment option when risks are within acceptable limits defined by the organization’s risk criteria.

Retention means consciously accepting a risk with full awareness of its potential consequences, typically because further treatment would be unnecessary, impractical, or disproportionate. Crucially, retention decisions must be based on risk acceptance criteria, not on subjective judgment alone.

Option B is incorrect because even minor risks must meet acceptance criteria. Option C promotes deferral without evaluation, which contradicts ISO 31000 principles. Option D is invalid because unidentified risks cannot be retained.

From a PECB ISO 31000 Lead Risk Manager perspective, retaining risks must be a deliberate, documented, and authorized decision aligned with risk appetite and tolerance. Therefore, the correct answer is only if the risk level meets the risk acceptance criteria and no additional controls are required.

The correct answer isC. Compliance risks. ISO 31000 defines risk as theeffect of uncertainty on objectives, expressed through the combination of likelihood and consequences. When Luca assessed the probability of noncompliance with laws, regulations, permits, and voluntary commitments, along with the associated impacts such as fines, sanctions, and reputational damage, he was clearly identifyingcompliance risks.

Compliance obligations refer to the laws, regulations, standards, and voluntary commitments that an organization must or chooses to comply with. In the scenario, these obligations included product safety laws, labor regulations, permits, and sustainability agreements. However, Luca went further by analyzing what could happenif those obligations were not met, which is the essence of risk identification and analysis.

Compliance performance would involve measuring how well Bambino is currently complying, while compliance controls are the measures implemented to ensure adherence. Neither term reflects the activity described, which focused on uncertainty, likelihood, and consequences.

From a PECB ISO 31000 Lead Risk Manager perspective, identifying compliance risks is a key part of risk identification and analysis, enabling organizations to prioritize actions, allocate resources, and protect value. Therefore, the correct answer iscompliance risks.

The correct answer isA. Integration. ISO 31000 definesintegrationas the process of embedding risk management into all aspects of the organization, including governance, strategy, planning, management, and culture. Integration ensures that risk management is not a standalone activity, but an inherent part of how the organization operates and makes decisions.

In the question, the organization aligns accountability and oversight roles with strategic objectives and culture, which directly reflects the integration component of the risk management framework. ISO 31000 emphasizes that integration is achieved when risk management influences governance structures and supports informed decision-making at all levels.

Option B,Design, refers to structuring the framework by understanding context, defining roles, allocating resources, and establishing communication mechanisms. While related, design precedes integration. Option C,Implementation, focuses on putting the framework into operation, while option D,Evaluation, involves assessing effectiveness.

From a PECB ISO 31000 Lead Risk Manager perspective, integration is critical to ensure that risk management supports value creation and protection. Therefore, the correct answer isintegration.