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    Question

    Which type of operational risk event does tax evasion

    falls into Basel II?
    A Business Disruption Correct Answer Incorrect Answer
    B External Fraud Correct Answer Incorrect Answer
    C Internal Fraud Correct Answer Incorrect Answer
    D Systems Failure Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The following lists the seven official Basel II event types with some examples for each category: Internal Fraud – misappropriation of assets, tax evasion, intentional mismarking of positions, bribery. External Fraud – theft of information, hacking damage, third-party theft and forgery Employment Practices and Workplace Safety – discrimination, workers compensation, employee health and safety Clients, Products, and Business Practice – market manipulation, antitrust, improper trade, product defects, fiduciary breaches, account churning Damage to Physical Assets – natural disasters, terrorism, vandalism Business Disruption and Systems Failures – utility disruptions, software failures, hardware failures Execution, Delivery, and Process Management – data entry errors, accounting errors, failed mandatory reporting, negligent loss of client assets.

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