100+ Free IRM International Certificate in Operational Risk Management Practice Questions

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2026 Statistics

Key Facts: IRM International Certificate in Operational Risk Management Exam

65%

Pass Mark

IRM Assessment Standard

90 min

Exam Duration

Pearson VUE CBT

Real Exam Questions

IRM ICORM Specification

GBP 495

Registration Fee

Institute of Risk Management

Syllabus Domains

IRM Operational Risk Syllabus

100

Practice Questions

OpenExamPrep Bank

The IRM International Certificate in Operational Risk Management (ICORM) is an internationally accredited qualification for risk managers, auditors, and compliance specialists. Assessed via a 90-minute, 60-question Pearson VUE exam with a 65% pass threshold, it validates competence across 4 core domains: Governance & Frameworks, Risk Assessment & KRIs, Incident Management & Resilience, and Risk Control & Culture.

Sample IRM International Certificate in Operational Risk Management Practice Questions

Try these sample questions to test your IRM International Certificate in Operational Risk Management exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1According to the Basel II/III framework, how is operational risk defined?

A.The risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events

B.The risk of financial loss resulting from changes in market prices, interest rates, or foreign exchange rates

C.The risk of loss arising from a borrower or counterparty failing to meet their contractual obligations

D.The risk of loss caused by adverse strategic decisions or changes in the competitive business environment

Explanation: The official Basel II/III definition of operational risk is 'the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.' This definition specifically includes legal risk, but excludes strategic and reputational risk.

2Which of the following risk types is explicitly INCLUDED within the Basel definition of operational risk?

A.Legal risk

B.Reputational risk

C.Strategic risk

D.Systemic financial market risk

Explanation: The Basel framework explicitly includes legal risk (such as exposure to fines, penalties, or punitive damages resulting from supervisory actions and private settlements) within operational risk. Reputational and strategic risks are explicitly excluded.

3Under the IIA Three Lines Model (formerly Three Lines of Defence), what primary role is performed by the First Line?

A.Owning, managing, and directly executing day-to-day risk management activities within business operations

B.Providing independent and objective assurance on risk governance and control effectiveness

C.Establishing risk management policy standards and challenging operational risk assessments

D.Approving the overall enterprise risk appetite statement and setting business strategy

Explanation: In the IIA Three Lines Model, the First Line consists of operational management and front-line business units who own and directly manage operational risks. They are responsible for implementing internal controls day-to-day.

4Which body or role forms the Second Line in the Institute of Internal Auditors (IIA) Three Lines Model?

A.Risk Management and Compliance functions offering expertise, oversight, and challenge

B.Operational business unit managers and front-line staff

C.External regulators and independent statutory auditors

D.The Board Audit Committee and Chief Executive Officer

Explanation: The Second Line comprises functions such as Risk Management, Compliance, and Information Security. They assist first-line management by providing expertise, policy frameworks, monitoring, and constructive challenge.

5What is the primary function of the Third Line in an organization's risk governance framework?

A.To provide independent and objective assurance to the board regarding control effectiveness

B.To design and execute daily operational controls for transactions

C.To set quantitative trading limits for market risk exposures

D.To negotiate insurance contracts to transfer operational risk

Explanation: The Third Line (Internal Audit) provides independent and objective assurance to senior management and the board on the adequacy and effectiveness of governance, risk management, and internal controls.

6According to ISO 31000:2018, how is 'risk' fundamental defined?

A.The effect of uncertainty on objectives

B.The probability of financial loss due to market volatility

C.The failure rate of internal IT infrastructure

D.The total exposure to legal penalties and regulatory fines

Explanation: ISO 31000:2018 defines risk as 'the effect of uncertainty on objectives.' An effect is a deviation from the expected, which can be positive, negative, or both, addressing opportunities as well as threats.

7What is the difference between 'Risk Appetite' and 'Risk Tolerance'?

A.Risk appetite is the amount and type of risk an organization is willing to pursue or accept; risk tolerance is the acceptable variance around specific objectives

B.Risk appetite is quantitative while risk tolerance is purely qualitative

C.Risk appetite is set by internal audit while risk tolerance is set by regulators

D.Risk appetite applies to credit risk only while risk tolerance applies to operational risk

Explanation: Risk Appetite describes the aggregate level and types of risk an organization is intentionally prepared to accept in pursuit of its strategic goals. Risk Tolerance represents the practical boundaries of acceptable variation around specific performance targets.

8A global retail bank experiences a breakdown in its payment processing software during peak business hours due to an untested patch deployment. Under Basel operational risk categories, which cause classification applies?

A.Inadequate Systems

B.External Events

C.Failed Internal Processes

D.People Error

Explanation: Software glitches, hardware crashes, and unvalidated system patch failures are classified under the 'Systems' category of the Basel operational risk definition (inadequate or failed systems).

9An employee colludes with a external contractor to submit fraudulent invoices for work never performed. Under the Basel Event Type Taxonomy, which level 1 category does this event belong to?

A.Internal Fraud

B.External Fraud

C.Employment Practices and Workplace Safety

D.Clients, Products & Business Practices

Explanation: Acts involving at least one internal party intended to defraud, misappropriate property, or circumvent regulations fall under Level 1 Event Type: Internal Fraud. Even if colluding with an external party, internal staff involvement designates it as internal fraud.

10In ISO 31000:2018, which component forms the core of the risk management framework structure surrounding the principles?

A.Leadership and Commitment

B.Plan-Do-Check-Act cycle

C.Risk Control Self-Assessment

D.Quantitative Capital Allocation

Explanation: In ISO 31000:2018, Leadership and Commitment is at the centre of the risk management framework, driving the integration, design, implementation, evaluation, and improvement of risk management across the organisation.

About the IRM International Certificate in Operational Risk Management Exam

The IRM International Certificate in Operational Risk Management is a premier globally recognized qualification designed to equip risk professionals with comprehensive capabilities in identifying, assessing, managing, and mitigating operational risks. It covers operational risk governance (Basel framework, ISO 31000, Three Lines Model), risk identification techniques (RCSAs, KRIs, scenario analysis), incident and loss data collection, business continuity and operational resilience, control evaluation, and risk culture.

Questions

60 scored questions

Time Limit

1 hour 30 minutes

Passing Score

65%

Exam Fee

GBP 495 (includes exam entry and study materials) (Institute of Risk Management (IRM UK))

IRM International Certificate in Operational Risk Management Exam Content Outline

25%

Operational Risk Governance and Frameworks

Basel II/III/IV definitions, ISO 31000 framework, Institute of Internal Auditors (IIA) Three Lines Model, risk appetite and tolerance statements, and board governance structures.

25%

Risk Identification and Assessment

Risk Control Self-Assessments (RCSA), Key Risk Indicators (KRIs), scenario analysis and stress testing, inherent vs residual risk evaluation, and maintenance of risk registers.

25%

Incident Management, Loss Data, and Operational Resilience

Operational loss data collection, near-miss reporting protocols, root cause analysis (RCA), Business Continuity Management (BCM), ISO 22301, and operational resilience frameworks.

25%

Risk Control, Mitigation, and Risk Culture

Internal control frameworks (COSO ICIF), preventive vs detective controls, key control testing, risk response strategies, assessing risk culture, and executive risk reporting.

How to Pass the IRM International Certificate in Operational Risk Management Exam

What You Need to Know

Passing score: 65%
Exam length: 60 questions
Time limit: 1 hour 30 minutes
Exam fee: GBP 495 (includes exam entry and study materials)

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

IRM International Certificate in Operational Risk Management Study Tips from Top Performers

1Familiarise yourself thoroughly with the formal Basel definition of operational risk: 'the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.'

2Understand the key distinctions and operational boundaries between First Line (risk owners), Second Line (risk oversight/challenge), and Third Line (internal audit).

3Master the methodology of RCSA, including how inherent risk is rated, how control effectiveness is evaluated, and how residual risk is calculated.

4Differentiate between leading and lagging Key Risk Indicators (KRIs) and understand how trigger thresholds prompt management action.

5Review the components of operational resilience, focusing on Important Business Services (IBS), impact tolerances, and severe but plausible scenario testing.

6Understand the core elements of sound risk culture: tone from the top, accountability, transparent communication, incentives, and psychological safety for reporting errors.

Frequently Asked Questions

What is the IRM International Certificate in Operational Risk Management?

It is a globally recognized professional qualification awarded by the Institute of Risk Management (IRM UK) that provides essential knowledge and practical techniques for managing operational risks in financial and non-financial organizations.

What is the format and duration of the IRM Operational Risk exam?

The exam consists of 60 multiple-choice questions to be completed in 1 hour 30 minutes (90 minutes) via computer-based testing at Pearson VUE centres or online proctoring.

What is the pass mark for the IRM Operational Risk exam?

The passing mark is 65%, meaning candidates must answer at least 39 out of 60 questions correctly.

What core topics are tested in the IRM ICORM syllabus?

The syllabus is structured around four main pillars: Operational Risk Frameworks & Governance, Risk Identification & Assessment (RCSA/KRI), Incident Management & Operational Resilience, and Risk Controls & Risk Culture.

How much does the IRM Operational Risk Certificate cost?

The standard fee is GBP 495, which includes entry for one exam sitting via Pearson VUE, student membership, and access to official digital resources.

Are there any entry requirements or prerequisites?

There are no formal educational or experience prerequisites, though 1 to 2 years of experience in risk management, internal audit, compliance, or financial services is recommended.

Can I take the exam online from home?

Yes, the IRM assessment is delivered through Pearson VUE, offering both test-centre sittings and online proctored examinations.

What happens if I do not pass on the first attempt?

Candidates can register for a resit exam during the next designated examination window by paying a resit fee of GBP 195.