Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 12

A major difference between enterprise risk management and traditional risk management lies in the narrow focus of traditional risk management on:
I. Property and liability risks.
II. Risks with insurance solutions.
III. Risks impacting organizational objectives.

Answer options

• A. I and II only
• B. I and III only
• C. II and III only
• D. I, II, and III.

Correct answer: A

Explanation

The correct answer is A because traditional risk management primarily addresses property and liability risks (I) and focuses on risks that can be mitigated through insurance solutions (II). In contrast, enterprise risk management considers a broader range of risks, including those that affect organizational objectives (III), which traditional risk management does not prioritize.