YHU manufactures flour from wheal (hat it purchases from wheat wholesalers who buy the gram in bulk from farmers around the world and import it to YHU's home country.
YHU sells its flour as "organic and free from genetically modified grain" It is difficult to test wheat to ensure that it is organic and impossible to prove that it has not been obtained from genetically modified crops YHU must trust its wholesalers to check the provenance of the wheat that they buy for resale to YHU.
Without YHU's knowledge, a consignment of wheat that it has used to make flour was purchased from a farmer who used genetically modified seed. The wholesaler made an error in tracking this consignment through its inventory system and sold it to YHU as organic and free from genetically modified gram Which TWO of the following are correct?

• A. YHU's total risk is affected by both the risk that the flour was incorrectly labelled and that the company was unaware of that fact
• B. The risk of YHU discovering this error is minimal because the wholesaler will both have to realise its mistake and be willing to admit to it.
• C. YHU could easily eliminate the risks associated with such errors by putting a prominent warning on its flour bags that they may contain flour made from non-organic or genetically modified flour.
• D. If YHU admits to this error then there is a strong risk that customers will take legal action for being sold a dangerous product and that the courts will find in the customers' favors.
• E. YHU should ignore the interaction between risk factors when considering its response to the possibility of mislabelled ingredients

B is a family run security company with a number of prestigious clients who rely on it to maintain online access to their CCTV and alarm systems and respond to any detected intrusions or malfunctions.
It designs and installs security systems for a number of UHNW (Ultra High Net Worth) individuals who may have several seasonal and city residences largely unoccupied for many months of the year.
B's reputation as 100% secure is crucial to its on-going success in this very specialised marketplace.
Select THREE factors which should be given prominence in B's fraud risk management strategy.

• A. B should ensure that employees who design or install security systems are not involved with the operation of those systems once implemented.
• B. B should inform clients that they have a stringent anti-fraud policy.
• C. B should have an active whistle-blower policy whereby all staff are encouraged by positive reward to report any suspicions they may have about other employees.
• D. B should carry out background security, health and financial checks on all employees, their immediate family members and associates on an annual basis.
• E. B should ask new employees to fill in a declaration that they are honest and have no criminal convictions for dishonesty. That can be filed as evidence that the company took this precaution.
• F. B Should revise and publish their fraud policy document to employees every three months, highlighting any new elements and industry developments.

The shares of a company have a beta factor of 1.15. Therefore, which of the following must be true?

• A. The shares have more total risk than the stock market average.
• B. The shares have more unsystematic risk than the stock market average.
• C. The shares have more systematic risk than the stock market average.
• D. The shares have less unsystematic risk than the stock market average.

HGY is a major global corporation that has decided to implement the COSO Enterprise Risk Management Framework and integrate management practices throughout the organisation Which THREE of the following would be appropriate for HGY?

• A. Train staff at all levels to identify and report risks to their superiors
• B. Recruit a Director of Risk, who will lead risk management procedures.
• C. Create a risk management team that will take responsibility for identifying and mitigating risk
• D. Identify risk as an element of HGY's overall strategy.
• E. Authorise managers and supervisors to respond immediately to any risks that emerge
• F. Make risk management an element of everyone's responsibility

E purchases parts for one of the machines it manufactures from Country X Place the risk classification next to the risk it relates to: