Risk Management and KPI Evaluation

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Questions and Answers

What should be done FIRST when a KPI shows that a process is operating inefficiently?

Implement new controls

Recalibrate the key performance indicator (KPI) (correct)

Re-evaluate the existing control design

Redesign the process

Which contributes MOST to the effective implementation of risk responses?

Comparable industry risk trends

Detailed standards and procedures

Clear understanding of the risk (correct)

Appropriate resources

Which KPI would BEST measure the risk of a service outage when using a SaaS vendor?

Frequency and duration of unplanned downtime (correct)

Number of IT support staff available after business hours

Frequency and number of new software releases

Frequency of business continuity plan (BCP) testing

Which control will BEST help reduce the risk of fraudulent internal transactions?

Segregation of duties Signup and view all the answers

What is the MOST important characteristic of an organization's policies?

To reflect the organization’s risk appetite Signup and view all the answers

Which factor is MOST likely to be affected after an organization acquires a new business division?

Risk profile Signup and view all the answers

What is the GREATEST benefit of using IT risk scenarios?

They facilitate communication of risk Signup and view all the answers

What should be provided to senior management regarding residual risk levels?

The highest loss expectancy among the risk scenarios Signup and view all the answers

What is the MOST important consideration when identifying stakeholders to review risk scenarios?

The reviewers are accountable for the affected processes Signup and view all the answers

When is the BEST time to evaluate current control effectiveness in an IT risk management program?

During the risk assessment Signup and view all the answers

What is the PRIMARY reason to perform periodic vendor risk assessments?

To monitor the vendor's control effectiveness Signup and view all the answers

What is the PRIMARY benefit of using automated system configuration validation tools?

Residual risk is reduced Signup and view all the answers

What is the MOST important inclusion when reporting risk assessment results to senior management for risk-based decision making?

Risk action plans and associated owners Signup and view all the answers

After undertaking a risk assessment of a production system, what is the MOST appropriate action for the risk manager?

Inform the process owner of the concerns and propose measures to reduce them Signup and view all the answers

What would be MOST impacted if a DLP system fails to detect outgoing emails containing credit card data?

Residual risk Signup and view all the answers

Which control MOST likely failed when sensitive data was lost due to an employee's actions?

Awareness training Signup and view all the answers

What is the PRIMARY objective of risk management?

Achieve business objectives Signup and view all the answers

Study Notes

Key Performance Indicators and Risk Assessment

If a KPI indicates inefficient process operation despite no control issues, first re-evaluate existing control design.
Key contributors to effective risk response implementation include clear understanding of the risk and appropriate resources.
The best KPI for measuring service outage risk with a SaaS vendor is the frequency and duration of unplanned downtime.

Fraud Risk Controls

To reduce the risk of fraudulent internal transactions, segregation of duties is the most effective control.
The primary characteristic of organizational policies is to reflect the organization's risk appetite.

Organizational Changes and Risk Management

Acquiring a new business division primarily affects the organization's risk profile.
IT risk scenarios primarily benefit risk communication among stakeholders.

Reporting and Residual Risks

Provide the overall residual risk level as the highest loss expectancy among risk scenarios.
When identifying stakeholders for risk scenario reviews, prioritize individuals accountable for affected processes.

Risk Management Programs

Evaluate current control effectiveness during the risk assessment phase of an IT risk management program.
Conduct periodic vendor risk assessments to monitor the vendor's control effectiveness.

Automated Tools and Reporting

The primary benefit of using automated system configuration validation tools is reduced inherent risk.
For effective risk-based decision making, include potential losses compared to treatment costs in reports to senior management.

Risk Management Actions

After a risk assessment, inform the process owner of concerns and propose measures to mitigate risks.
Data Loss Prevention (DLP) system failure impacts residual risk due to undetected sensitive data breaches.

Personal Data Protection

The failure of awareness training is likely the reason for loss of sensitive data by an employee violating policy.
The primary objective of risk management is to achieve business objectives while minimizing disruptions and identifying vulnerabilities.

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Description

This quiz focuses on key performance indicators (KPIs) related to process efficiency and risk management. It examines how to approach inefficiencies identified by KPIs and emphasizes the importance of effective implementation of risk responses. Participants will evaluate various options and concepts critical to optimizing risk management practices.