OCEG Updated GRCP Exam Questions and Answers by elora

Normsare socially reinforced expectations, customs, or unwritten rules that influence behavior within a group or organization.

Definition:

Norms dictate acceptable behavior and interactions within a group.

Importance in Organizations:

Norms shape the organizational culture and influence decision-making, collaboration, and communication.

Examples of Norms:

Greeting colleagues in the morning.

Responding promptly to emails within a set timeframe.

References:

Corporate Culture Studies: Discuss how norms develop and their impact on group behavior.

COSO Framework: Links norms to cultural elements in governance and risk.

In theThree Lines of Defense Model, theSecond Line(functions such as risk management and compliance) may provide assurance overFirst Line(business operations) activities under specific conditions to ensure independence, objectivity, and competence.

Conditions for Second Line Assurance:

Separation of Duties:The Second Line can only provide assurance if it did not design or perform the activities it is examining. This separation is crucial to avoid conflicts of interest.

Assurance Objectivity:The Second Line personnel must maintain objectivity, avoiding any bias or personal stake in the outcome of their evaluations.

Assurance Competence:The Second Line must have the technical expertise and skills required to evaluate the subject matter accurately.

Why Option C is Correct:

It aligns with the principles of independence and objectivity required for assurance activities.

It recognizes the Second Line's role in oversight and assurance without encroaching on the operational responsibilities of the First Line.

Relevant Frameworks and Guidelines:

IIA’s Three Lines Model (2020):Emphasizes the importance of objectivity and independence in assurance activities.

COSO ERM Framework:Discusses the distinct roles of governance, risk, and assurance functions.

In summary, the Second Line can provide assurance over the First Line, but only under conditions that ensure objectivity and competence, as outlined in established GRC models and frameworks.

Industry factorsinfluencing an organization’s external context include elements within the competitive and market environment that impact strategy, operations, and performance.

Key Industry Factors:

New Entrants: Potential competitors entering the market can disrupt established dynamics.

Competitors: Existing market players directly affect competitive positioning and market share.

Suppliers: Influence cost structures, supply chain stability, and material availability.

Customers: Drive demand and influence product or service offerings.

Why Other Options Are Incorrect:

A: Product development and branding are internal factors, not external industry factors.

B: Political involvement of competitors is an external political or regulatory factor, not an industry-specific one.

D: New technologies are external technological factors, not strictly industry-related.

References:

Porter’s Five Forces Framework: Highlights industry forces, including new entrants, competitors, suppliers, and customers.

ISO 31000 (Risk Management): Discusses external context considerations, including industry-specific factors.

Technology factorsin an organization's external context include technological developments and innovations outside the organization that affect its competitive environment.

Examples of Technology Factors:

Research and Design Activity: Innovations in materials and engineering that impact product development.

Rate of Technological Change: Rapid advancements that require businesses to adapt to remain competitive.

Relation to External Context:

These factors originate outside the organization and influence strategic decision-making and innovation adoption.

Why Other Options Are Incorrect:

A: Market segmentation and pricing are marketing-related factors.

CandD: These describe internal applications of technology, not external influences.

References:

PESTEL Analysis: Includes technology as a critical external factor.

ISO 31000: Considers external technological developments in risk evaluations.