CRISC Exam Dumps - Certified in Risk and Information Systems Control

The group that has primary ownership of reputational risk stemming from unethical behavior within the organization is A. Board of directors. According to the CFA Institute, the board of directors is responsible for setting the tone at the top and ensuring that the company adheres to high ethical standards and values. The board of directors also oversees the company’s culture, governance, and risk management practices, and holds the management accountable for any misconduct or breach of trust1 The board of directors may delegate some of its oversight functions to other committees, such as the human resources, risk management, or audit committee, but ultimately, the board of directors bears the ultimate responsibility for the company’s reputation and integrity

The primary focus of an independent review of a risk management process is to evaluate the maturity of the process, which means the extent to which the process is aligned with the organization’s objectives, culture, and governance, and how well it is integrated, implemented, and monitored across the organization. A mature risk management process is one that is consistent, effective, efficient, and adaptable to changing circumstances and environments. A maturity assessment can help to identify the strengths and weaknesses of the risk management process, as well as the opportunities and challenges for improvement. The other options are not the primary focus, but they may be secondary or tertiary aspects of the review. Accuracy of risk tolerance levels is a measure of how well the organization defines and communicates its risk appetite and risk limits, which are important inputs for the risk management process, but not the main outcome. Consistency of risk process results is a measure of how reliable and repeatable the risk management process is, which reflects the quality and validity of the data, assumptions, methods, and tools used in the process, but not the overall effectiveness and efficiency of the process. Participation of stakeholders is a measure of how well the organization engages and involves its internal and external stakeholders in the risk management process, which enhancesthe awareness, ownership, andaccountability of the process, but not the alignment and integration of the process. References = Assessing the Risk Management Process, p. 9-10.

The level of risk in the IT risk profile is the aggregate measure of the likelihood and impact of IT-related risks that may affect the enterprise’s objectives and operations.

The risk appetite is the amount and type of risk that the enterprise is willing to accept in pursuit of its goals. It is usually expressed as a range or a threshold, and it is aligned with the enterprise’s strategy and culture.

If the level of risk in the IT risk profile has decreased and is now below management’s risk appetite, it means that the enterprise has more capacity and opportunity to take on additional risks that may offer higher rewards or benefits.

The best recommendation in this situation is to optimize the control environment, which is the set of policies, procedures, standards, and practices that provide the foundation for managing IT risks and controls. Optimizing the control environment means enhancing the efficiency and effectiveness of the controls, reducing the costs and complexity of compliance, and aligning the controls with the enterprise’s objectives and values.

Optimizing the control environment can help the enterprise to achieve the optimal balance between risk and return, and to leverage its risk management capabilities to create and protect value.

The other options are not the best recommendations, because they do not address the opportunity to improve the enterprise’s performance and resilience.

Realigning risk appetite to the current risk level may result in missing out on potential gains or advantages that could be obtained by taking more risks within the acceptable range.

Decreasing the number of related risk scenarios may reduce the scope and depth of risk analysis and reporting, and impair the enterprise’s ability to identify and respond to emerging or changing risks.

Reducing the risk management budget may compromise the quality and reliability of the risk management process and activities, and weaken the enterprise’s risk culture and governance. References =

ISACA, CRISC Review Manual, 7th Edition, 2022, pp. 29-30, 34-35, 38-39, 44-45

ISACA, CRISC Review Questions, Answers & Explanations Database, 2022, QID 145

 Risk scenarios are hypothetical situations that describe potential events or actions that could affect the achievement of enterprise objectives. The design of relevant risk scenarios should consider the following factors: the risk appetite and tolerance of the enterprise, the key risk indicators and risk drivers, the potential impact and likelihood of the scenarios, and the alignment with the risk management capabilities of the enterprise. The scenarios should be realistic, plausible, and consistent with the enterprise’s context and objectives. The scenarios should also be reviewed and updated periodically to reflect changes in the internal and external environment. The alignment with the risk management capabilities is the most critical factor, as it ensures that the scenarios are relevant for the decision making and risk response processes of the enterprise. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 2, Section 2.3.3.2, pp. 67-69.

The most important objective of establishing an enterprise risk management (ERM) function within an organization is to have a unified approach to risk management across the organization. An ERM function is a centralized and coordinated function that oversees and supports the risk management activities of the organization, such as risk identification, assessment, response, monitoring, and reporting. An ERM function helps to ensure that the risk management process is consistent, comprehensive, and integrated with the organization’s strategy, objectives, and culture. An ERM function also helps to align the risk management activities with the organization’s risk appetite and tolerance, and to provide a holistic view of the organization’s risk profile and exposure. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 1, Section 1.1.1, page 131

 The situation where the cost of maintaining a control has grown to exceed the potential loss is best described as an over-controlled environment, as it indicates that the control is not cost-effective and may be unnecessary or excessive. Insufficient risk tolerance, optimized control management, and effective risk management are not the best descriptions, as they do not reflect the imbalance between the control cost and the potential loss. References = CRISC Review Manual, 7th Edition, page 149.

 The average time to identify critical information security incidents is the best indicator of effective information security incident management, as it measures how quickly the organization can detect and respond to the most severe threats to its information assets. The faster the organization can identify critical incidents, the lower the potential impact and damage they can cause. The average time to identify critical incidents also reflects the efficiency and accuracy of the monitoring and reporting mechanisms, as well as the awareness and training of the staff and stakeholders. The other options are not the best indicators of effective information security incident management, as they do not directly measure the performance or quality of the incident response process. The monthly trend of information security-related incidents may show the frequency or severity of the incidents, but not how well they are managed. The frequency of information security incident response plan testing may show the preparedness or maturity of the organization, but not the actual effectiveness of the plan. The percentage of high-risk security incidents may show the risk exposure or appetite of the organization, but not the risk mitigationor treatment. References = 7 Types of Information Security Incidents and How to Respond; Annex A.16: Information Security Incident Management - ISMS.online; CISM Isaca Exam Questions and Answers - CertLibrary.com

 The global organization has adopted risk acceptance as the risk response with regard to privacy requirements, as it has decided to continue with the implementation of the application that does not address all privacy requirements across multiple jurisdictions, and bear the potential consequences of noncompliance. Risk avoidance, risk transfer, and risk mitigation are not the risk responses adopted by the organization, as they would involve avoiding, sharing, or reducing the risk of noncompliance with privacy requirements, respectively. References = CRISC Review Manual, 7th Edition, page 111.