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ITCertMagic ORM Certificate - 2023 Update (8020) practice test has real ORM Certificate - 2023 Update (8020) exam questions. You can change the difficulty of these questions, which will help you determine what areas appertain to more study before taking your PRMIA 8020 Exam Dumps. Here we listed some of the most important benefits you can get from using our PRMIA 8020 practice questions.

PRMIA 8020 Exam Syllabus Topics:

Topic	Details
Topic 1	Risk Management Framework: This section of the exam measures the skills of Risk Managers and covers the development and implementation of structured approaches for risk identification, evaluation, and mitigation. It includes industry-standard frameworks that guide risk strategy and decision-making. A key skill measured is establishing a risk management framework for organizations.
Topic 2	Risk Assessment: This section of the exam measures the skills of Financial Risk Analysts and covers methodologies for evaluating risks in different domains, including qualitative and quantitative approaches. It focuses on assessing vulnerabilities, threats, and potential impacts on business operations. A key skill measured is conducting risk impact analysis for financial threats.
Topic 3	Risk Governance: This section of the exam measures the skills of Compliance Officers and covers the policies, structures, and processes that define how organizations oversee risk. It explores regulatory compliance, ethical considerations, and corporate governance frameworks to ensure accountability. A key skill measured is applying governance frameworks to organizational risk policies.
Topic 4	Insurance Mitigation: This section of the exam measures the skills of Insurance Risk Managers and covers strategies for transferring risk through insurance and other financial instruments. It focuses on risk transfer mechanisms, policy structuring, and claims management. A key skill measured is assessing risk transfer options through insurance.
Topic 5	Introduction: This section of the exam measures the skills of Risk Analysts and covers fundamental concepts of risk governance, management, and assessment. It introduces key principles, regulatory frameworks, and industry best practices for identifying and addressing risks. A key skill measured is understanding the foundational principles of risk management.

PRMIA ORM Certificate - 2023 Update Sample Questions (Q30-Q35):

NEW QUESTION # 30
When a control is found to be ineffective, which of the following steps should be take next?

A. Risks should be re-assessed to determine if there is the appropriate level of control assessment.
B. The controls should be re-assessed during the next cycle to determine if they are still ineffective.
C. An action plan should be designed to close the gap.
D. Risks should be re-assessed to determine if there can be an exception for the level of control assessment.

Answer: C

Explanation:
When a control is found to be ineffective, the primary objective is to remediate the deficiency by implementing corrective measures. PRMIA (Professional Risk Managers' International Association) guidance, aligned with best practices in risk governance, emphasizes a structured approach to handling control deficiencies. Below is a detailed breakdown based on PRMIA risk management principles:
Step 1: Identify and Assess the Ineffective Control
A control is deemed ineffective when it fails to mitigate the identified risks to an acceptable level.
The root cause of the failure must be determined through a Control Effectiveness Review (CER).
PRMIA recommends control testing and incident analysis to assess the severity of the control failure.
Step 2: Develop an Action Plan to Address the Control Deficiency
PRMIA best practices state that risk management should prioritize corrective actions rather than delaying remediation.
The organization must define an action plan to close the gap, which includes:
Revising or strengthening the control mechanisms.
Implementing new controls, if necessary.
Assigning responsibility for remediation to control owners.
Setting deadlines for resolution.
This step aligns with PRMIA's Risk Governance Framework, which emphasizes proactive risk management.
Step 3: Implement Corrective Measures and Monitor Progress
Once an action plan is designed, the organization should execute the corrective actions.
PRMIA's Risk Monitoring Guidelines require regular follow-ups and testing to ensure the control is functioning correctly.
The effectiveness of the remediation should be validated through post-implementation review and ongoing control testing.
Step 4: Re-Assess Risks and Control Effectiveness
Once corrective measures are in place, the organization should re-evaluate risks to confirm that the issue is resolved.
The risk assessment process should be updated to reflect the changes in the control environment.
Why the Other Options Are Incorrect?
Option A: "Risks should be re-assessed to determine if there is the appropriate level of control assessment." While risk re-assessment is a good practice, it does not directly address the ineffective control.
PRMIA guidelines prioritize closing the control gap first before reassessing risks.
Option C: "The controls should be re-assessed during the next cycle to determine if they are still ineffective." Waiting until the next assessment cycle delays remediation, which could expose the organization to unmitigated risks.
PRMIA risk frameworks recommend immediate corrective action when a control is found to be ineffective.
Option D: "Risks should be re-assessed to determine if there can be an exception for the level of control assessment." PRMIA does not support exceptions for ineffective controls unless there is a well-documented risk acceptance process.
A control failure should be remediated rather than seeking exceptions.
PRMIA Risk Reference Used:
PRMIA Risk Governance Framework - Defines the importance of immediate corrective actions for control failures.
PRMIA Risk Monitoring Guidelines - Stresses continuous monitoring and validation of controls.
PRMIA Risk Management Standards - Recommends a structured action plan for ineffective controls.
PRMIA Operational Risk Framework - Emphasizes the need to close control gaps to maintain a strong risk posture.
Final Conclusion:
According to PRMIA risk management best practices, when a control is found to be ineffective, the best course of action is to design and implement an action plan to remediate the issue (Option B). This approach ensures that the organization mitigates risk promptly and maintains a strong control environment.

NEW QUESTION # 31
For credit risk losses containing operational risk elements that have been historically included in an organizations' credit risk database how should the loss amount be treated?

A. The loss amount is split into credit and operational risk components.
B. The entire loss amount is treated as credit risk, but the loss is entered as a memorandum within the operational loss database and not used for capital modeling purposes.
C. The entire loss amount is treated as operational risk.
D. The entire loss amount is treated as credit risk

Answer: A

Explanation:
Understanding Credit Risk and Operational Risk Overlap
In some cases, credit risk losses contain elements of operational risk, such as fraud, documentation errors, or IT failures affecting credit transactions.
Basel II and III frameworks require institutions to distinguish between pure credit risk losses and operational risk components within those losses.
Treatment of Losses
The credit-related portion is accounted for under credit risk capital calculations.
The operational risk portion (e.g., fraud-related losses) should be classified separately and included in operational risk databases for risk measurement.
Why Answer C is Correct
Basel III and PRMIA recommend a clear split between credit risk and operational risk components to ensure accurate risk modeling.
If operational risk elements are ignored, an organization may underestimate its true operational risk exposure.
Why Other Answers Are Incorrect
Option
Explanation:
A . The entire loss amount is treated as credit risk.
Incorrect - This ignores operational risk components that should be accounted for separately.
B . The entire loss amount is treated as operational risk.
Incorrect - Credit risk losses are typically dominant in lending-related losses and should not be fully classified as operational risk.
D . The entire loss amount is treated as credit risk, but the loss is entered as a memorandum within the operational loss database and not used for capital modeling purposes.
Incorrect - The operational risk portion must be considered for capital modeling, not just recorded as a memo.
PRMIA Reference for Verification
Basel II & III Guidelines on Credit and Operational Risk Integration
PRMIA Operational Risk Framework

NEW QUESTION # 32
ISO 27000 relates to what topic / area?

A. Auditing of financial controls.
B. Information Security Systems.
C. Environmental, social, and governance (ESG) investing.
D. International Risk Management.

Answer: B

Explanation:
Step 1: Definition of ISO 27000
ISO 27000 is a global standard for information security management systems (ISMS), issued by the International Organization for Standardization (ISO).
It provides a framework for protecting sensitive information through policies, controls, and risk management practices.
Step 2: Why Option B Is Correct
ISO 27001 (part of ISO 27000 series) is one of the most widely recognized certifications for information security governance.
It sets guidelines on risk assessment, incident response, and data protection.
Step 3: Why the Other Options Are Incorrect
Option A ("ESG investing")
Incorrect because ISO 27000 deals with cybersecurity, not environmental, social, and governance (ESG) issues.
Option C ("International Risk Management")
Incorrect because ISO 27000 focuses on information security, not general risk management.
Option D ("Auditing of financial controls")
Incorrect because financial auditing standards (e.g., SOX, COSO) are separate from information security standards.
PRMIA Risk Reference Used:
ISO 27000 Series Documentation - Defines cybersecurity risk management practices.
PRMIA IT Risk Governance Framework - Reference ISO 27001 as a cybersecurity standard.

NEW QUESTION # 33
For the National Australia Bank - FX Options case study, which was the major cause of the loss event?

A. Currency traders concealed losses using back office knowledge.
B. Currency traders smoothed profits and concealed losses.
C. Currency traders were allowed access to the risk system by the CEO.
D. Currency traders were able to complete a Management Buy Out (MBO).

Answer: B

Explanation:
Overview of the National Australia Bank (NAB) FX Options Case Study
Traders at National Australia Bank (NAB) engaged in unauthorized foreign exchange (FX) options trading.
They smoothed profits and concealed losses using fictitious transactions and manipulated reporting.
This led to a major financial scandal and loss of investor confidence.
Key Findings of the Investigation
Traders artificially smoothed profits to avoid drawing attention to large fluctuations.
Losses were concealed from internal risk controls by manipulating trade records.
The bank's risk management and governance controls failed to detect and prevent these activities.
Why Other Answers Are Incorrect
Option
Explanation:
A . Currency traders were allowed access to the risk system by the CEO.
Incorrect - No evidence suggests CEO involvement in granting system access.
B . Currency traders concealed losses using back-office knowledge.
Incorrect - While they concealed losses, they also smoothed profits to manipulate earnings trends.
D . Currency traders were able to complete a Management Buy Out (MBO).
Incorrect - This event was not related to a Management Buyout (MBO); it was a trading scandal.
PRMIA Reference for Verification
PRMIA Fraud and Risk Management Case Studies
Basel Principles on Market Risk and Internal Control Failures

NEW QUESTION # 34
Which of the following best describes the role of the compliance department?

A. The compliance department is responsible for providing oversight over the board's implementation of compliance risk management controls.
B. The compliance department is responsible for providing oversight over the first line's implementation of compliance risk management controls.
C. The compliance department is responsible for implementing the first line's compliance risk management controls.
D. The compliance department is responsible for providing oversight over the auditor's implementation of compliance risk management controls.

Answer: B

Explanation:
Three Lines of Defense Model
The compliance department functions as the second line of defense, ensuring oversight over the first line's compliance controls.
It does not directly implement controls but monitors and advises on compliance risk management.
Responsibilities of the Compliance Department
Ensures regulatory compliance with laws, policies, and industry standards.
Monitors and enforces risk management controls within business operations.
Provides advisory and training on compliance risks.
Why Answer D is Correct
The first line of defense (business operations) is responsible for executing compliance controls.
The compliance department (second line) provides oversight and governance to ensure compliance adherence.
Why Other Answers Are Incorrect
Option
Explanation:
A . The compliance department is responsible for implementing the first line's compliance risk management controls.
Incorrect - The first line (business units) implement compliance controls, while compliance oversees.
B . The compliance department is responsible for providing oversight over the auditor's implementation of compliance risk management controls.
Incorrect - Internal audit is part of the third line of defense, not directly overseen by compliance.
C . The compliance department is responsible for providing oversight over the board's implementation of compliance risk management controls.
Incorrect - The board provides high-level governance; compliance ensures business adherence to regulations.
PRMIA Reference for Verification
PRMIA Governance & Compliance Oversight Framework
Basel Committee's Guidelines on Compliance Risk Management

NEW QUESTION # 35
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