GAQM CBCP-002 - Certified Business Continuity Professional (CBCP)

Financial risks are the risks that result from business decisions that are influenced by changes in markets, liquidity, and credit. Financial risks are the uncertainties or variabilities of the financial performance or position of an organization due to factors such as interest rates, exchange rates, inflation, credit ratings, debt levels, or cash flows. Financial risks can affect anorganization’s profitability, solvency, liquidity, or valuation. Verified References: https://www.investopedia.com/terms/f/financialrisk.asp https://www.thebci.org/training-qualifications/good-practice-guidelines.html

A formal “disaster” can only be declared by the firm owners or by the IT Department Manager. This is false because a formal “disaster” can be declared by any authorized person who has the responsibility and authority to activate the business continuity and disaster recovery plan. The authorized person may vary depending on the type, scope, and severity of the disaster, but it should be clearly defined in the plan who can declare a disaster and under what circumstances. The authorized person should also communicate the declaration of a disaster to all relevant stakeholders, such as employees, customers, suppliers, partners, regulators, media, or the public. Verified References: https://www.ready.gov/business-continuity-plan https://www.csoonline.com/article/515730/business-continuity-and-disaster-recovery-planning-the-basics.html

A disaster can also be declared for an illness pandemic where a significant portion of employees are sick. This is true because an illness pandemic is a type of natural disaster that can affect an organization’s ability to continue its normal operations. An illness pandemic can cause absenteeism, reduced productivity, increased costs, supply chain disruptions, customer dissatisfaction, or regulatory compliance issues. Therefore, an organization may need to declare a disaster and activate its business continuity and disaster recovery plan if an illness pandemic impacts its critical functions and processes beyond an acceptable level. VerifiedReferences: https://www.ready.gov/business-continuity-plan https://www.csoonline.com/article/515730/business-continuity-and-disaster-recovery-planning-the-basics.html

Threats can be considered any events or situations that can cause harm or disruption to an organization’s functions or processes. Threats can be natural, human-made, or technological in origin. Some examples of threats are water (such as floods, leaks, or spills), technology failure (such as system crashes, cyberattacks, or power outages), and fire (such as arson, accidents, or explosions). Verified References: https://www.iso.org/publication/PUB100442.html https://phoenixnap.com/blog/what-is-business-continuity-management

Operational risk is the type of risk that is related to human error or achievement. Operational risk is the uncertainty or variability of the execution or outcome of an organization’s functions or processes. Operational risk can result from factors such as inadequate policies, procedures, systems, controls, skills, training, supervision, or compliance. Operational risk can affect an organization’s operational efficiency, quality, safety, security, reputation, or profitability. Verified References: https://www.investopedia.com/terms/o/operational_risk.asp https://www.thebci.org/training-qualifications/good-practice-guidelines.html

BIA helps to identify all of the above aspects of an organization’s functions and processes. It helps to identify the critical services and products that the organization delivers to its customers and stakeholders, and the functions and processes that support them. It also helps to identify the critical interdependencies and interested parties that are involved in or affected by the organization’s functions and processes, such as suppliers, partners, regulators, or employees. Moreover, it helps to identify the tangible and intangible impacts of a disruption to the organization’s functions and processes over a period of time, such as financial losses, reputational damage, legal liabilities, or customer dissatisfaction. Verified References: https://www.ready.gov/business-impact-analysis https://drii.org/resources/professionalpractices/EN

Corporate governance is the system of rules, practices, and processes by which an organization is directed and controlled. It involves balancing the interests of various stakeholders, such as shareholders, management, customers, suppliers, regulators, and the community. It also enables an organization to balance risk and entrepreneurial energy with appropriate internal control procedures to manage that risk. Effective corporate governance can enhance performance, accountability, transparency, and trust. Verified References: https://www.investopedia.com/terms/c/corporategovernance.asp https://www.thebci.org/training-qualifications/good-practice-guidelines.html

The frequency of BCP testing for critical processes is a fundamental aspect of ensuring a plan remains effective and relevant. Business Continuity Professional standards, such as those from DRI International and ISO 22301, provide guidance on testing frequency based on the criticality of processes and organizational needs.

Annually: Industry standards recommend that critical processes undergo comprehensive BCP testing at least once a year. This ensures that plans are validated, personnel are trained, and any gaps or changes in the business environment are addressed. Annual testing is considered a baseline requirement for maintaining resilience, particularly for critical functions that, if disrupted, could severely impact the organization.

Quarterly: While more frequent testing (e.g., quarterly) may be appropriate for highly dynamic environments or specific high-risk processes, it is not a universal requirement for all critical processes. Quarterly testing is typically reserved for specific scenarios or as part of a progressive testing strategy rather than a standard frequency.

As per calendar planned at beginning of the year: This option implies a flexible schedule, but it lacks specificity and does not align with standardized recommendations. Testing should follow a defined frequency rather than an arbitrary calendar plan unless explicitly tied to a standard (e.g., annual).

Half-yearly: Semi-annual testing (every six months) may be adopted by some organizations for additional assurance, but it exceeds the minimum standard requirement of annual testing for critical processes unless specified by organizational policy or regulatory mandates.

The verified answer,A. Annually, reflects the widely accepted minimum frequency for testing critical processes as per Business Continuity Professional guidelines. However, organizationsmay increase frequency based on risk assessments or regulatory requirements, though this is not the default expectation.

References:

DRI International Professional Practices for Business Continuity Management (2023), Section 9: Testing and Exercising – Recommends annual testing as a minimum for critical processes.

ISO 22301:2019, Clause 8.5 – Specifies regular testing and exercising, with annual frequency as a common benchmark for critical functions.

Damage assessment is the process of evaluating the extent and severity of the damage caused by a disruption to an organization’s facilities, equipment, systems, data, records, or personnel. It includes identifying the affected business functions and processes, estimating the time it will take to restore them to normal or acceptable levels of operation, and evaluating whether the recovery time exceeds the maximum tolerable downtime (MTD) for each function or process. If so, a disaster should be declared and the business continuity plan should be activated. Having the insurance company declare the total extent of the damages is not part of the damage assessment process, as it may take longer than the MTD and may not reflect the operational impact of the damage. Verified References: https://www.fema.gov/pdf/emergency/nims/Damage_Assessment.pdf https://drii.org/resources/professionalpractices/EN