Governance, Risk, and Compliance (GRC) Framework

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Questions and Answers

Which of the following best describes a consequence of a manual, siloed approach to risk management, as exemplified by ABC Bank of India?

  • Lack of real-time risk intelligence, hindering proactive decision-making. (correct)
  • Reduced reliance on documentation, streamlining the risk management process.
  • Improved cross-departmental communication leading to faster risk mitigation.
  • Enhanced real-time risk intelligence due to detailed manual tracking.

Which of the following does NOT pertain to the structure of ABC Bank of India?

  • Headed by a Risk officer. (correct)
  • Assisted by three deputy governors.
  • Headed by a Governor.
  • The Board of Directors governs it.

Which of the following illustrates a key challenge for an organization using a spreadsheet-based compliance tracking system?

  • Ensuring version control and data integrity across multiple users. (correct)
  • Facilitating real-time collaboration between compliance teams.
  • Automating compliance reporting to regulatory bodies.
  • Easily integrating compliance data with other enterprise systems.

What is the MOST likely result of a bank using a document and email-based system for risk management?

<p>Difficulties in tracking and managing the most current information. (A)</p> Signup and view all the answers

An organization identifies a vulnerability in its system. Which of the following actions BEST demonstrates a 'governance' approach to addressing this vulnerability?

<p>Establishing a policy requiring regular vulnerability assessments and remediation. (D)</p> Signup and view all the answers

Which of the following scenarios BEST illustrates the relationship between threat and vulnerability?

<p>A software flaw (vulnerability) is exploited by a hacker (threat) to gain access to sensitive data. (B)</p> Signup and view all the answers

Which of the following statements BEST captures the relationship between Governance, Risk, and Compliance (GRC)?

<p>Governance sets the direction, risk management identifies potential obstacles, and compliance ensures adherence to rules. (B)</p> Signup and view all the answers

An organization implements a new security tool. What kind of risk management strategy is being applied?

<p>Risk Mitigation. (C)</p> Signup and view all the answers

An organization denies compensation to an employee's family after a fatal accident on duty, citing the employee was drunk at the time. Workers strike, demanding compensation. What is the most appropriate immediate action for the Chairman of the management board to take, considering governance principles?

<p>Temporarily concede to the workers' demand for compensation to de-escalate the situation, while launching a transparent investigation into the accident and related policies. (D)</p> Signup and view all the answers

Which of the following is the MOST accurate definition of IT governance?

<p>A framework for aligning IT strategy with business strategy to ensure that IT resources are used effectively and efficiently to achieve organizational goals. (B)</p> Signup and view all the answers

How does a well-defined IT strategy contribute to an organization's overall business governance?

<p>By enabling effective decision-making related to IT investments, resource allocation, and risk management, ensuring alignment with business objectives. (C)</p> Signup and view all the answers

What is the primary focus of the COBIT framework in the context of IT governance?

<p>To offer a comprehensive framework for governing and managing enterprise IT, ensuring it aligns with business goals and delivers value. (B)</p> Signup and view all the answers

In what way does ISO 27001 support IT governance within an organization?

<p>By establishing a framework for implementing and maintaining an Information Security Management System (ISMS), ensuring the confidentiality, integrity, and availability of information assets. (B)</p> Signup and view all the answers

Which of the following best describes the relationship between enterprise governance and IT governance?

<p>IT governance is a subset of enterprise governance, focusing specifically on the governance of IT resources, processes, and decisions within the broader organizational context. (A)</p> Signup and view all the answers

Which aspect of IT service management is primarily addressed by ITIL?

<p>Best practices for IT service delivery and support (C)</p> Signup and view all the answers

An organization is implementing a new customer relationship management (CRM) system. How can IT governance principles ensure that this project delivers maximum business value?

<p>By ensuring the CRM project aligns with the organization's strategic objectives, involves relevant stakeholders, manages risks effectively, and measures the benefits realized. (A)</p> Signup and view all the answers

A company's worker dies on duty due to being drunk, which violates company safety regulations. What is the most strategic approach for the company to mitigate potential repercussions?

<p>Offer alternative employment to a family member of the deceased and implement stricter safety measures to regain worker trust and avoid further disruptions. (D)</p> Signup and view all the answers

In the scenario where a worker's negligence leads to a fatal accident at the workplace, what is the most significant long-term risk for the company, regardless of immediate actions taken?

<p>The erosion of trust between the workers and management, leading to decreased morale and productivity. (D)</p> Signup and view all the answers

If a company decides to offer compensation to the family of a worker who died due to their own negligence, what potential negative consequence might the management face?

<p>A perception of undermining the company's safety regulations, potentially encouraging future negligence. (A)</p> Signup and view all the answers

Which action would best balance the need to maintain company image/productivity with the need to enforce safety regulations after a fatal accident caused by worker negligence?

<p>Offer alternative employment to a family member, coupled with a public commitment to enhanced safety protocols. (A)</p> Signup and view all the answers

What is the most likely reason for workers to go on strike after a colleague's death caused by the colleague's own negligence?

<p>A sense of solidarity, concern over workplace safety, and distrust of management's handling of the situation. (D)</p> Signup and view all the answers

A company facing a strike after a safety incident should prioritize which of the following actions to regain control of the situation?

<p>Engage in open communication with the striking workers, actively listening to their concerns and addressing legitimate issues. (C)</p> Signup and view all the answers

Which action demonstrates a company's proactive approach to preventing future safety incidents, beyond addressing the immediate aftermath of an accident?

<p>Investing in comprehensive safety training programs and regularly updating protocols based on incident analysis. (D)</p> Signup and view all the answers

In the context of a company responding to a fatal accident caused by worker negligence, what does 'setting a bad precedent' primarily refer to?

<p>Creating a situation where the company is perceived as being liable for all accidents, regardless of fault. (A)</p> Signup and view all the answers

Flashcards

GRC Framework

An integrated approach to managing an organization's overall governance, risk management, and compliance activities.

Assets

Anything that has value to the organization.

Vulnerability

A weakness or gap in security efforts.

Threat

Anything that could exploit a vulnerability.

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Risk

The chance of something happening that will have an impact on objectives.

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Governance

Oversight and control of an organization's activities.

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Compliance

Adherence to laws, regulations, policies, and ethical standards.

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Risk Management Strategies

Strategies implemented to minimize the negative impacts of risks.

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Drunk worker death?

The company isn't responsible for the death of a worker who was drunk during duty.

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Strike Consequences?

Workers might strike, damaging the company's image and productivity. Trust between workers and management would be lost.

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Compensation risks?

Compensating for rule violations sets a bad precedent and undermines safety regulations.

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Better resolution?

Offer alternative employment to the deceased's family and implement stricter safety measures.

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Enterprise purpose?

Organizations exist to provide value to their stakeholders.

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Value delivery means?

Achieving value while staying within acceptable risk and utilizing resources responsibly, especially IT.

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Swift direction setting?

Fast decision-making and adaptability are essential in today's quickly evolving business landscape.

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Decision-making accountability?

Senior management is responsible for creating a decision-making structure shared across the company. That's where governance comes into play.

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What is Governance?

The framework of authority and accountability exercised by the board of directors to ensure strategic direction, achievement of objectives, managing risks and proper use of resources.

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Enterprise Governance

Governance that focuses on the overall organization, ensuring it meets its goals and obligations.

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Corporate Governance

Governance concerned with how a company is managed, emphasizing accountability to shareholders.

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IT Governance

Governance specifically focused on the management and utilization of Information Technology (IT) resources within an organization.

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What is COBIT?

A framework for IT governance and management providing a set of tools to bridge the gap between control requirements, technical issues and business risks.

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What is ITIL?

A framework detailing best practices for IT service management (ITSM).

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What is ISO 27001?

An international standard for information security management systems (ISMS).

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Business and IT Strategy

The alignment of business objectives with IT strategies to ensure IT delivers value.

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Study Notes

  • Enterprises, both commercial and non-commercial, exist to provide value to their stakeholders.
  • Value delivery involves operating within acceptable risk parameters and using resources like IT responsibly.
  • In the rapidly evolving business landscape, swift direction and adaptability are crucial.
  • Senior management ensures decision-making accountabilities are shared across the enterprise.
  • Governance becomes significant when accountability is distributed.
  • The term "Governance" originates from a Greek verb meaning "to steer".

Governance, Risk, and Compliance (GRC) Framework

  • GRC helps in understanding of the concept of Governance, Risk, and Compliance (GRC).
  • GRC helps in comprehending risks, related terms, and risk classification systems.
  • GRC assists to distinguish between different types of risks and their mitigation strategies.
  • GRC enables the users to identify different types of malicious attacks and softwares and countermeasures.

Illustration: ABC Bank of India

  • The ABC Bank of India is governed by a Board of Directors headed by its Governor and assisted by three deputy governors in Administration, Economic and Financial policies, and Financial stability.
  • The bank followed a manual, siloed, document, email, and spreadsheet-based risk management program without real-time risk intelligence.

Concepts of Governance and IT Strategy

  • Enables understanding of governance, its framework, and related terms.
  • Helps understand the role of IT and how to align Information Systems (IS) strategy with business strategy.
  • Crucial to distinguish between IT governance, enterprise governance, and corporate governance.
  • Crucial to be aware of the COBIT framework and ITIL.
  • Important to get acquainted with ISO 27001 standard.

Illustration: Governance in an Organisation

  • An employee died on duty, and the company denied compensation due to his intoxication at the time of the accident.
  • Workers went on strike demanding compensation for the family of the deceased.
  • Recommending compensation would set a bad precedent among management and workers and would mean undermining safety regulations.
  • It may be best to offer alternative employment to the kin of the deceased and to push stricter prevention and safety measures.
  • The recommendation is suitable as it would be better to bring the situation under control.

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