ACCA Strategic Professional · Strategic Business Leader · Managing, monitoring and mitigating risk
Brightwell Logistics is designing its risk process in line with ISO 31000. The risk manager proposes that the process of identifying, analysing and evaluating risks should be completed once a year by a specialist team, then filed until the next cycle. Which feature of ISO 31000 does this proposal most clearly contradict?
The proposal contradicts ISO 31000's principle that risk management is dynamic, iterative and responsive to change, supported by continual communication, consultation, monitoring and review. A once-a-year exercise filed away cannot respond to emerging risks or changing context, so it falls short of the standard.
- AThe requirement that all risks must be eliminated rather than treated
- BThe principle that risk management is dynamic, iterative and responsive to change, with continual communication and monitoringCorrect
- CThe rule that only financial risks fall within scope
- DThe requirement that risk treatment is delegated entirely to internal audit
Explanation
ISO 31000 states that risk management should be dynamic, iterative and responsive to change, with communication, consultation, monitoring and review throughout. An annual filed exercise ignores this. The other options misstate ISO 31000, which does not require elimination of all risks, limit scope to financial risk, or assign treatment to internal audit.
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