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An enterprise may have hundreds of risk indicators such as logs, alarms and reports. The CRISC will usually need to work with senior management and business leaders to determine which risk indicators will be monitored on a regular basis and be recognized as KRIs. Incorrect Answers:C, D: Chief financial officer and human resource only overview common risk view, but are not involved in risk based decisions.

Creating a scenario requires determination of the value of an asset or a business process at risk and the potential threats and vulnerabilities that could cause loss. The risk scenario should be assessed for relevance and realism, and then entered into the risk register if found to be relevant. In practice following steps are involved in risk scenario development:First determine manageable set of scenarios, which include:Frequently occurring scenarios in the industry or product area. Scenarios representing threat sources that are increasing in count or severity level. Scenarios involving legal and regulatory requirements applicable to the business. After determining manageable risk scenarios, perform a validation against the business objectives of the entity. Based on this validation, refine the selected scenarios and then detail them to a level in line with the criticality of the entity. Lower down the number of scenarios to a manageable set. Manageable does not signify a fixed number, but should be in line with the overall importance and criticality of the unit. Risk factors kept in a register so that they can be reevaluated in the next iteration and included for detailed analysis if they have become relevant at that time. Risk factors kept in a register so that they can be reevaluated in the next iteration and included for detailed analysis if they have become relevant at that time. Include an unspecified event in the scenarios, that is, address an incident not covered by other scenarios. Incorrect Answers:A: Cause-and-effect analysis is a predictive or diagnostic analytical tool used to explore the root causes or factors that contribute to positive or negative effects or outcomes. It is used during the process of exposing risk factors.

Pilot testing and reviewing of performance data to verify operation against design are done before relying on control. Incorrect Answers:B: Discovering risk exposure helps in identifying the severity of risk, but it does not play any role in specifying the reliability of control.D: Articulating risk is the first phase in the risk response process to ensure that information on the true state of exposures and opportunities are made available in a timely manner and to the right people for appropriate response. But it does not play any role in identifying whether any specific control is reliable or not.

Risk appetite is the amount of risk a company or other entity is willing to accept in pursuit of its mission. This is the responsibility of the board to decide risk appetite of an enterprise. When considering the risk appetite levels for the enterprise, the following two major factors should be taken into account:The enterprise's objective capacity to absorb loss, e.g., financial loss, reputation damage, etc. The culture towards risk taking-cautious or aggressive. In other words, the amount of loss the enterprise wants to accept in pursue of its objective fulfillment. Incorrect Answers:B: Alignment with risk-culture is also one of the factors but is not as important as these two.C: Risk aware decision is not the factor, but is the result which uses risk appetite information as its input.

The principles of access controls focus on availability, integrity, and confidentiality, as loss or danger is directly related to these three:Loss of confidentiality- Someone sees a password or a company's secret formula, this is referred to as loss of confidentiality. Loss of integrity- An e-mail message is modified in transit, a virus infects a file, or someone makes unauthorized changes to a Web site is referred to as loss of integrity. Loss of availability- An e-mail server is down and no one has e-mail access, or a file server is down so data files aren't available comes under loss of availability.

Loss of integrity refers to the following types of losses:An e-mail message is modified in transit A virus infects a file Someone makes unauthorized changes to a Web site Incorrect Answers:A: Someone sees company's secret formula or password comes under loss of confidentiality.

Audit and accountability family of controls helps an organization implement an effective audit program. It provides details on how to determine what to audit. It provides details on how to protect the audit logs. It also includes information on using audit logs for non-repudiation. Incorrect Answers:B: Access Control is the family of controls that helps an organization implement effective access control. They ensure that users have the rights and permissions they need to perform their jobs, and no more. It includes principles such as least privilege and separation of duties.Audit and accountability family of controls do not help in implementing effective access control.

The risk response process is triggered when a risk exceeds the enterprise's risk tolerance level. The acceptable variation relative to the achievement of an objective is termed as risk tolerance. In other words, risk tolerance is the acceptable deviation from the level set by the risk appetite and business objectives. Risk tolerance is defined at the enterprise level by the board and clearly communicated to all stakeholders. A process should be in place to review and approve any exceptions to such standards. Incorrect Answers:A, C: Risk appetite level is not relevant in triggering of risk response process. Risk appetite is the amount of risk a company or other entity is willing to accept in pursuit of its mission. This is the responsibility of the board to decide risk appetite of an enterprise. When considering the risk appetite levels for the enterprise, the following two major factors should be taken into account:The enterprise's objective capacity to absorb loss, e.g., financial loss, reputation damage, etc. The culture towards risk taking-cautious or aggressive. In other words, the amount of loss the enterprise wants to accept in pursue of its objective fulfillment. D: Risk response process is triggered when the risk level increases the risk tolerance level of the enterprise, and not when it just equates the risk tolerance level.

Exposure Factor represents the impact of the risk over the asset, or percentage of asset lost. For example, if the Asset Value is reduced to two third, the exposure factor value is 0.66. Therefore, when the asset is completely lost, the Exposure Factor is 1.0. Incorrect Answers:B, C, D: These are not the values of exposure factor for zero assets.

This is an example of exploiting a positive risk - a by-product of a project is an excellent example of exploiting a risk. Exploit response is one of the strategies to negate risks or threats that appear in a project. This strategy may be selected for risks with positive impacts where the organization wishes to ensure that the opportunity is realized. Exploiting a risk event provides opportunities for positive impact on a project. Assigning more talented resources to the project to reduce the time to completion is an example of exploit response. Incorrect Answers:A: Enhancing is a positive risk response that describes actions taken to increase the odds of a risk event to happen.B: This is an example of a positive risk, but positive is not a risk response.C: Opportunistic is not a valid risk response.