Certified Management Accountant Practice Exam 2026 - Free CMA Practice Questions and Study Guide

The chosen answer highlights a crucial element of operational risk management: the need to understand and effectively manage the risks that are inherently tied to the day-to-day operations of an organization. Operational risks may arise from various factors including inadequate or failed internal processes, people, systems, or external events. Recognizing these risks allows companies to implement strategies and controls aimed at mitigating potential operational failures and enhancing overall efficiency.

By focusing on the specific risks associated with operational processes, organizations can tailor their risk management practices to address the unique challenges they face, rather than taking a generic approach to risk reduction. This targeted understanding fosters resilience and strengthens the organization’s capacity to navigate operational uncertainties successfully.

Other options such as reducing all types of risk, ensuring compliance only with legal regulations, or focusing solely on financial outcomes may overlook the broader scope of operational risks and their impact on overall business performance. Operational risk management goes beyond just compliance or financial metrics; it encompasses a holistic view of how the organization operates and seeks to improve it by actively managing relevant risks within that context.