Risk Management Principles
36 practice questions with explanations — 15 free to try
4 of these 36 questions are in the free 15-question taster · the full topic is part of Premium
PassNova has 36 M_o_R Foundation practice questions on Risk Management Principles, each with a clear explanation. A 15-question taster is free with no sign-up; the full bank is part of PassNova Premium. Updated for 2026.
Risk Management Principles: example questions & answers
4 worked examples with answers and explanations below. Try 15 M_o_R Foundation questions free in the browser; the full 36-question Risk Management Principles bank is part of PassNova Premium.
In Management of Risk (M_o_R), which of the following best defines a 'risk'?
- AAn event that has already caused harm to the organisation
- BAn uncertain event or set of events that, should it occur, will have an effect on the achievement of objectives✓
- CA definite future cost which must always be budgeted for in advance each year
- DA weakness in a control that auditors have identified
Answer: M_o_R defines risk as an uncertain event or set of events that, should it occur, will have an effect on the achievement of objectives. The uncertainty and link to objectives are central to the definition.
M_o_R recognises that risk has two types of effect on objectives. What are they?
- AStrategic and operational
- BThreats and opportunities✓
- CInternal and external
- DFinancial and reputational
Answer: M_o_R treats risk as having both a downside (threats) and an upside (opportunities). Effective risk management seeks to minimise threats and maximise opportunities.
How many principles underpin the M_o_R framework?
- AEight✓
- BTwelve
- CFive
- DSeven
Answer: M_o_R is built on eight principles that inform and support all other elements of the framework. They are derived from corporate governance principles.
Which M_o_R principle states that risk management should reflect the specific situation, culture and objectives of the organisation rather than a one-size-fits-all approach?
- AFits the context✓
- BProvides clear guidance
- CInforms decision-making
- DAligns with objectives
Answer: The 'fits the context' principle requires risk management to be designed for the organisation's current external and internal context rather than applied as a one-size-fits-all approach. 'Provides clear guidance', 'informs decision-making' and 'aligns with objectives' are other M_o_R principles with different emphases.