What are the objectives of conducting an internal loss investigation?

Internal loss investigationsanalyze past loss events toidentify root causes, improve controls, and enhance risk assessments.

Root Cause Analysis: Identifying why the loss occurred.

Focus on Remediation: Implementing corrective measures to prevent recurrence.

Scenario Analysis Improvement: Using lessons learned toenhance risk scenario modeling.

Option B ("Focus on who caused the issue")→ Incorrect because loss investigations are aboutsystemic issues, not assigning blame.

Option C ("Ascertain responsibility for the loss event")→ Incorrect because the focus is onprocess improvements, not individual accountability.

Option D ("Determined by HR on a case-by-case basis")→ Incorrect becauseHR does not dictate risk investigations—risk and compliance functions do.

tep 1: Purpose of Internal Loss InvestigationsStep 2: Why Option A Is CorrectStep 3: Why the Other Options Are Incorrect

PRMIA Operational Risk Framework– Emphasizes loss investigations for systemic risk management.

Basel III Risk Governance Standards– Defines loss event analysis as a key risk management tool.

PRMIA Risk References Used: