Which of the following is MOST important to include when developing a business case for a specific risk response?
Correct Answer: C
Importance of Business Case Development: * When developing a business case for a specific risk response, it is crucial to justify the expense of the investment. * The justification ensures that resources are allocated effectively and that stakeholders understand the value and necessity of the investment. Key Elements of a Business Case: * Justification for Expense:This includes cost-benefit analysis, expected return on investment, and the impact on risk reduction. * Stakeholders Responsible:Identifying who will be responsible for implementing and monitoring the risk response plan. * Communication and Reporting:Plans for keeping stakeholders informed about the status and effectiveness of the risk response. References: * ISA 315 (Revised 2019), Anlage 6emphasizes the importance of thorough documentation and justification in risk management processes to ensure informed decision-making.
Question 12
Which of the following MUST be established in order to manage l&T-related risk throughout the enterprise?
Correct Answer: A
To manage IT-related risk throughout the enterprise, it is crucial to establish an enterprise risk governance committee. This committee provides oversight and direction for the risk management activities across the organization. It ensures that risks are identified, assessed, and managed in alignment with the organization's risk appetite and strategy. The committee typically includes senior executives and stakeholders who can influence policy and resource allocation. This structure supports a comprehensive approach to risk management, integrating risk considerations into decision-making processes. This requirement is in line with guidance from frameworks such as COBIT and ISO 27001, which emphasize governance structures for effective risk management.
Question 13
To be effective, risk reporting and communication should provide:
Correct Answer: C
Effective Risk Reporting: * Effective risk reporting should provide relevant, concise, and focused information that addresses the key points necessary for decision-making. Relevance and Conciseness: * Providing risk reports to each business unit and groups of employees (A) can lead to information overload and may not be practical or effective. * The same risk information for each decision-making stakeholder (B) may not be appropriate as different stakeholders have varying levels of responsibility and information needs. Focused Communication: * Providing concise information focused on key points ensures that stakeholders receive relevant data without unnecessary details, facilitating better decision-making. * This approach is supported by best practices in risk management reporting, which emphasize the importance of clarity, relevance, and focus. Conclusion: * Therefore, risk reporting and communication should providestakeholders with concise information focused on key points.
Question 14
Risk maps can help to develop common profiles in order to identify which of the following?
Correct Answer: C
Risk maps, often visual tools representing risks across different dimensions (such as likelihood and impact), are valuable in identifying risk response activities that can be optimized for greater efficiency. Here's a detailed explanation: * Understanding Risk Maps:Risk maps provide a visual representation of various risks within an organization. These maps typically plot risks on a matrix, with axes representing the likelihood of occurrence and the potential impact on the organization. * Purpose of Risk Maps:The primary objective of using risk maps is to help organizations prioritize their risk management efforts. By visualizing risks, organizations can better understand which risks need immediate attention and which can be monitored over time. * Identifying Efficient Risk Response Activities:Risk maps facilitate the identification of risk response activities that can be made more efficient. This is done by highlighting areas where multiple risks overlap or where current risk response activities may be redundant or overlapping. By analyzing these overlaps, organizations can streamline their risk response activities, thus improving efficiency and reducing costs. * References to Professional Guidelines:According to ISA 315, an understanding of an entity's environment, including its risk assessment process, helps in identifying risks of material misstatement. Similarly, understanding how the entity responds to these risks can help auditors and risk managers in planning and optimizing risk response activities.
Question 15
Which of the following is an example of a tangible and assessable representation of risk?
Correct Answer: C
A risk scenario is an example of a tangible and assessable representation of risk. Here's the breakdown: * Enterprise Risk Policy: This is a document that outlines the organization's approach to risk management. While important, it is not a specific, tangible representation of risk. * Risk Treatment Plan: This outlines the actions to mitigate identified risks. It is a strategy rather than a representation of specific risks. * Risk Scenario: This provides a detailed and concrete representation of potential risk events, their causes, and impacts. It allows for assessment and preparation, making it a tangible and assessable representation of risk. Therefore, a risk scenario is the best example of a tangible and assessable representation of risk. References: * ISA 315 Anlage 5 and 6: Understanding risks, scenarios, and their impacts on IT systems and business objectives. * ISO-27001 and GoBD guidelines on risk management and identification. These references provide a comprehensive understanding of the concepts and principles involved in IT risk and audit processes.
