OCEG GRCP Exam Questions - Real Practice Questions for Guaranteed Success

Question 1

In the context of uncertainty, what is the difference between likelihood and impact?

ALikelihood is a measure of the chance of an event occurring, while impact is the location of the event within the organization.

BLikelihood is a measure of the chance of an event occurring, while impact is the category or type of risk or reward from the event.

CLikelihood is a measure of the chance of an event occurring, while impact measures the economic and non-economic consequences of the event.

DLikelihood is the chance of an event occurring after controls are put in place, while impact measures the economic and non-economic consequences of the event.

Correct : C

Likelihood and impact are key factors in evaluating uncertainty, especially in the context of risk and reward.

Likelihood:

Measures the probability or chance of an event occurring.

Example: The likelihood of a data breach based on historical trends.

Impact:

Measures the economic and non-economic consequences of the event.

Examples: Financial losses, reputational damage, or operational disruptions.

Why Other Options Are Incorrect:

A: Impact refers to consequences, not the location of the event.

B: Impact is not limited to categories; it involves actual consequences.

D: Likelihood considers controls but is not exclusively post-control.

ISO 31000 (Risk Management): Defines likelihood and impact as fundamental components of risk assessment.

COSO ERM Framework: Emphasizes assessing both likelihood and impact in risk evaluation.

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ALikelihood is a measure of the chance of an event occurring, while impact is the location of the event within the organization.

BLikelihood is a measure of the chance of an event occurring, while impact is the category or type of risk or reward from the event.

CLikelihood is a measure of the chance of an event occurring, while impact measures the economic and non-economic consequences of the event.

DLikelihood is the chance of an event occurring after controls are put in place, while impact measures the economic and non-economic consequences of the event.

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Question 2

How can an organization evaluate the adequacy of current levels of residual risk/reward and compliance?

AThe organization can evaluate adequacy by looking at the number of lawsuits and enforcement actions.

BThe organization can use analysis criteria to evaluate the adequacy of current levels and determine if additional analysis is required.

CThe organization can evaluate adequacy by removing controls and seeing if the levels change.

DThe organization can evaluate adequacy by hiring an outside auditor to make an assessment.

Correct : B

Organizations evaluate the adequacy of residual risk/reward and compliance by applying structured analysis criteria to determine whether current levels align with their objectives and risk appetite.

Analysis Criteria:

Specific benchmarks or standards are used to measure whether residual risks and compliance efforts meet organizational expectations.

Criteria are based on factors like likelihood, impact, regulatory requirements, and strategic goals.

Process:

Evaluate current levels using established criteria.

Identify gaps and determine if further analysis or additional controls are required.

Why Other Options Are Incorrect:

A: Lawsuits and enforcement actions are outcomes, not methods of evaluating adequacy.

C: Removing controls introduces risks and is not a recommended evaluation method.

D: While external auditors provide insights, adequacy evaluation starts internally with analysis criteria.

COSO ERM Framework: Provides guidance on evaluating residual risk and compliance adequacy.

ISO 31000 (Risk Management): Recommends using criteria to assess and refine risk management practices.

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AThe organization can evaluate adequacy by looking at the number of lawsuits and enforcement actions.

BThe organization can use analysis criteria to evaluate the adequacy of current levels and determine if additional analysis is required.

CThe organization can evaluate adequacy by removing controls and seeing if the levels change.

DThe organization can evaluate adequacy by hiring an outside auditor to make an assessment.

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Question 3

What is the primary responsibility of the Fourth Line in the Lines of Accountability Model?

AThe Fourth Line, which is the Procurement Department, is responsible for managing vendor relationships and procurement processes.

BThe Fourth Line, which is the HR department, is responsible for providing training and development opportunities to employees.

CThe Fourth Line, which is the Compliance Department, is responsible for establishing actions and controls to address regulatory and policy requirements.

DThe Fourth Line, which is the Executive Team, is accountable and responsible for organization-wide performance, risk, and compliance.

Correct : D

The Fourth Line in the Lines of Accountability Model refers to the Executive Team, which holds responsibility for organization-wide performance, risk, and compliance.

Primary Responsibility:

The Executive Team sets the strategic direction and ensures that governance, risk, and compliance efforts are aligned with organizational objectives.

Key Activities:

Overseeing implementation of enterprise-wide policies and controls.

Ensuring accountability at all levels for performance, risk management, and compliance.

Why Other Options Are Incorrect:

A: Procurement is an operational function under the First Line.

B: HR falls under specific functions, not organization-wide governance.

C: Compliance is a Second Line responsibility, not the Fourth Line.

OCEG GRC Capability Model: Discusses roles of the Fourth Line in overall accountability.

COSO ERM Framework: Highlights the role of executives in enterprise-wide governance.

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AThe Fourth Line, which is the Procurement Department, is responsible for managing vendor relationships and procurement processes.

BThe Fourth Line, which is the HR department, is responsible for providing training and development opportunities to employees.

CThe Fourth Line, which is the Compliance Department, is responsible for establishing actions and controls to address regulatory and policy requirements.

DThe Fourth Line, which is the Executive Team, is accountable and responsible for organization-wide performance, risk, and compliance.

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Question 4

Who has ultimate accountability (plenary accountability) for the governance, management, and assurance of performance, risk, and compliance in the Lines of Accountability Model?

AThe Fifth Line, or the Governing Authority (Board).

BThe Second Line, or the individuals and teams that establish performance, risk, and compliance programs.

CThe First Line, or the individuals and teams involved in operational activities.

DThe Third Line, or the individuals and teams that provide assurance.

Correct : A

The Fifth Line, or the Governing Authority (Board), holds ultimate accountability for the governance, management, and assurance of performance, risk, and compliance.

Role of the Governing Authority:

Sets the tone at the top by defining the mission, vision, and strategic objectives.

Ensures proper oversight and accountability across all lines.

Approves and monitors the effectiveness of risk management, performance, and compliance initiatives.

Why Other Options Are Incorrect:

B: The Second Line implements performance, risk, and compliance programs but does not have ultimate accountability.

C: The First Line executes operational activities but does not govern or manage assurance.

D: The Third Line provides independent assurance but is not accountable for governance and management.

COSO ERM Framework: Highlights the Governing Authority's accountability for enterprise risk and compliance.

OCEG GRC Capability Model: Describes the plenary accountability of the Fifth Line.

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AThe Fifth Line, or the Governing Authority (Board).

BThe Second Line, or the individuals and teams that establish performance, risk, and compliance programs.

CThe First Line, or the individuals and teams involved in operational activities.

DThe Third Line, or the individuals and teams that provide assurance.

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Question 5

What is the significance of evaluating costs and benefits during design?

AIt enables the organization to decide it would rather bear the risk and cost of a compliance enforcement action than spend more money to ensure compliance.

BIt determines the number of employees to commit to any aspect of the design.

CIt provides insights into the preferences and behaviors of customers and clients.

DIt ensures that the costs do not outweigh the benefits of a design decision.

Correct : D

Evaluating costs and benefits during the design phase ensures that design decisions are economically justified and aligned with organizational goals.

Purpose of Cost-Benefit Evaluation:

Ensures that the investment in design delivers value exceeding the costs incurred.

Helps balance resources, risks, and expected outcomes.

Key Benefits:

Avoids overinvestment in unnecessary controls or processes.

Aligns decision-making with organizational priorities and strategic goals.

Why Other Options Are Incorrect:

A: This is an unethical and shortsighted approach, not a principle of cost-benefit evaluation.

B: Determining employee allocation is part of resource management, not the primary purpose of cost-benefit evaluation.

C: Customer insights are valuable but do not pertain specifically to cost-benefit analysis during design.

OCEG GRC Capability Model: Highlights cost-benefit evaluation in designing effective actions and controls.

ISO 31000 (Risk Management): Recommends cost-benefit analysis for risk treatment options.

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AIt enables the organization to decide it would rather bear the risk and cost of a compliance enforcement action than spend more money to ensure compliance.

BIt determines the number of employees to commit to any aspect of the design.

CIt provides insights into the preferences and behaviors of customers and clients.

DIt ensures that the costs do not outweigh the benefits of a design decision.

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Master OCEG GRCP Exam with Reliable Practice Questions

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