Certified Supply Chain Professional (CSCP) Practice Exam

What is the primary purpose of ISO 31010?

1. To provide guidelines for implementing safety regulations

2. To encourage systematic risk assessment techniques

3. To establish a framework for financial reporting

4. To standardize quality control processes

The correct answer is: To encourage systematic risk assessment techniques

The primary purpose of ISO 31010 is to encourage systematic risk assessment techniques. This international standard provides guidance on selecting and applying various risk assessment methods, aiming to help organizations effectively identify, analyze, and evaluate risks. By implementing these techniques, organizations can make informed decisions when mitigating risks, thus enhancing their overall risk management strategies. This standard is integral to fostering a proactive approach to risk management, as it promotes a structured and consistent process for assessing risks across different scenarios and industries. Unlike frameworks devoted to safety regulations, financial reporting, or quality control, ISO 31010 focuses explicitly on the principles and methodologies related to risk assessment, making it a vital tool for organizations looking to enhance their risk management practices.