Certified Financial Management Specialist Practice Exam

What term refers to an integrated view of risks and business operations?

1. Cohesive Picture

2. Systemic Risks

3. Centralized Controls

4. Downstream Dependencies

The correct answer is: Cohesive Picture

The term that refers to an integrated view of risks and business operations is known as a "Cohesive Picture." This concept encapsulates the idea that in order to effectively manage risks, organizations must consider the interconnections between various risks and their overall business operations. A cohesive picture allows managers and stakeholders to understand how different risks might impact one another and how they collectively influence the organization. For example, financial risks may interrelate with operational risks, and the failure to recognize these relationships can lead to incomplete risk management strategies. By fostering an integrated approach, organizations can better anticipate challenges and deploy more effective risk mitigation strategies, improving overall resilience. In contrast, systemic risks focus on systemic issues that can cause widespread failures, often overlooking the individual connections between business operations. Centralized controls refer to a governance structure that may or may not provide an integrated view and typically addresses control measures rather than risks in relation to operations. Downstream dependencies generally highlight the relationships between different participants in a value chain or project but do not capture the breadth of risks across the entire organization.