Questions for the IT RISK FUNDAMENTALS were updated on : Dec 01 ,2025
For risk reporting to adequately reflect current risk management capabilities, the risk report should
be based on the enterprise:
B
Explanation:
Understanding Risk Reporting:
For risk reporting to accurately reflect current risk management capabilities, it should be based on
the organization’s current risk profile, which provides a comprehensive view of all identified risks,
their severity, and their impact on the organization.
Components of Risk Reporting:
Risk Management Framework (A) provides the overall approach and guidelines for managing risk but
does not reflect the current state of risks.
Risk Appetite (C) defines the level of risk the organization is willing to accept but does not detail the
current risks being managed.
Current Risk Profile:
The risk profile offers a detailed snapshot of the current risks, including emerging risks, changes in
existing risks, and the effectiveness of the controls in place to manage these risks.
This aligns with guidelines from frameworks such as ISO 31000 and COSO ERM, which stress the
importance of a dynamic and current view of the risk landscape for effective risk reporting.
Conclusion:
Therefore, to reflect current risk management capabilities, the risk report should be based on the
enterprise’s risk profile.
To be effective, risk reporting and communication should provide:
C
Explanation:
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 provide stakeholders with concise information
focused on key points.
Which of the following is of GREATEST concern when aggregating risk information in management
reports?
B
Explanation:
Importance of Clear Risk Reporting:
Accurate and transparent risk reporting is crucial for effective risk management. It allows
stakeholders to understand the underlying causes of risks and take appropriate actions.
Greatest Concern in Risk Reporting:
Duplicating details of risk status (A) is less critical as it can be managed through report structuring.
Generalizing acceptable risk levels (C) is also concerning but does not impact the understanding of
the root causes of risks as significantly.
Obfuscating Risk Reasons:
The greatest concern is obfuscating the reasons behind risks, as this prevents stakeholders from
understanding the true nature of the risk and making informed decisions.
Effective risk management requires clarity about why risks exist and how they are being managed,
which aligns with the guidance provided in standards like ISO 31000 and COSO ERM.
Conclusion:
Therefore, the greatest concern when aggregating risk information in management reports is
Obfuscating the reasons behind risk.
Which of the following statements on an organization's cybersecurity profile is BEST suited for
presentation to management?
C
Explanation:
Communicating Cybersecurity Profile:
When presenting the organization's cybersecurity profile to management, it is crucial to focus on the
effectiveness of the security measures in place and their ability to minimize risks.
Clarity and Relevance:
Statement A ("The probability of a cyber attack varies between unlikely and very likely") is too vague
and does not provide actionable information.
Statement B ("Risk management believes the likelihood of a cyber attack is not imminent") lacks
specificity and does not detail the measures taken.
Effectiveness of Security Measures:
Statement C highlights the proactive steps taken to configure security measures to minimize risk.
This approach is more likely to instill confidence in management about the current cybersecurity
posture.
According to best practices in IT risk management, as outlined in various frameworks such as NIST
and ISO 27001, focusing on the effectiveness and configuration of security controls is key to
managing cybersecurity risks.
Conclusion:
Thus, the statement best suited for presentation to management is: Security measures are
configured to minimize the risk of a cyber attack.
The MOST important reason to monitor implemented controls is to ensure the controls:
A
Explanation:
Importance of Monitoring Controls:
Monitoring implemented controls is a critical aspect of risk management and audit practices. The
primary goal is to ensure that the controls are functioning as intended and effectively mitigating
identified risks.
Effectiveness and Risk Management:
Controls are put in place to manage risks to acceptable levels, as determined by the organization's
risk appetite and risk management framework. Regular monitoring helps in verifying the
effectiveness of these controls and whether they continue to manage risks appropriately.
Reference from the ISA 315 standard emphasize the importance of evaluating and monitoring
controls to ensure they address the risks they were designed to mitigate.
Other Considerations:
While enabling IT operations to meet agreed service levels (B) and mitigating regulatory compliance
risks (C) are important, they are secondary to the primary purpose of ensuring controls are effective
in managing risk.
Effective risk management encompasses meeting service levels and compliance, but these are
outcomes of having robust, effective controls.
Conclusion:
Therefore, the most important reason to monitor implemented controls is to ensure they are
effective and manage risk to the desired level.
Organizations monitor control statuses to provide assurance that:
A
Explanation:
Purpose of Monitoring Control Statuses:
Organizations monitor control statuses to ensure that the controls in place are functioning correctly
and achieving their intended outcomes.
Providing Assurance:
Monitoring control statuses provides assurance that the organization is compliant with established
standards, regulations, and internal policies.
Compliance is a critical aspect of governance and risk management, ensuring that the organization
operates within legal and regulatory frameworks.
Comparison of Options:
B ensuring risk events are fully mitigated is an important aspect but is secondary to the overarching
goal of compliance.
C meeting ROI objectives is related to financial performance but does not directly relate to the
primary purpose of control monitoring, which is compliance.
Conclusion:
Thus, the primary reason for monitoring control statuses is to provide assurance that compliance
with established standards is achieved.
As part of the control monitoring process, frequent control exceptions are MOST likely to indicate:
B
Explanation:
Control Monitoring Process:
The control monitoring process involves regular review and assessment of controls to ensure they
are operating effectively and as intended.
Frequent Control Exceptions:
Frequent exceptions in control processes often indicate that the controls are not aligning well with
the business priorities or operational needs.
This misalignment can occur when controls are too rigid, outdated, or not suited to the current
business environment, leading to frequent violations or bypassing of controls.
Comparison of Options:
A excessive costs associated with the use of a control might be a concern, but it is not the primary
reason for frequent exceptions.
C high risk appetite throughout the enterprise might lead to more accepted risks but does not
directly explain frequent control exceptions.
Conclusion:
Therefore, frequent control exceptions are most likely to indicate misalignment with business
priorities.
Which of the following is the PRIMARY reason for an organization to monitor and review l&T-related
risk periodically?
A
Explanation:
Monitoring and Reviewing IT-Related Risk:
Periodic monitoring and reviewing of IT-related risks are essential to ensure that the organization can
adapt to both internal and external changes that might affect risk levels.
Primary Reason:
The primary reason for this ongoing process is to address changes in external (e.g., regulatory
changes, market conditions) and internal (e.g., organizational changes, new IT deployments) risk
factors.
Risks are dynamic and can evolve due to various factors. Therefore, continuous monitoring helps in
identifying new risks and changes in existing risks, ensuring that they are managed appropriately.
Comparison of Options:
B ensuring risk is managed within acceptable limits is a significant outcome of monitoring but is not
the primary driver for periodic review.
C facilitating the identification and replacement of legacy IT assets is an operational concern but does
not encompass the broader scope of risk management.
Addressing changes in risk factors is a proactive approach that enables an organization to stay ahead
of potential issues and maintain an effective risk management posture.
Conclusion:
Thus, the primary reason for an organization to monitor and review IT-related risk periodically is to
address changes in external and internal risk factors.
Which of the following is the MOST important aspect of key performance indicators (KPIs)?
A
Explanation:
Definition and Importance of KPIs:
Key Performance Indicators (KPIs) are measurable values that demonstrate how effectively an
organization is achieving key business objectives. They are critical for assessing performance against
targets.
Primary Aspect of KPIs:
The primary aspect of KPIs is their ability to identify underperforming assets or processes that may
impact the achievement of operational goals. This aligns with the fundamental purpose of KPIs,
which is to measure performance and indicate areas that need improvement.
By identifying underperforming assets, management can take corrective actions to align
performance with strategic objectives, ensuring that the organization remains on track to achieve its
goals.
Comparison of Options:
B and C are important functions of KPIs, but they are not the primary focus. Monitoring IT asset
usage and ROI (B) and infrastructure capacity (C) are specific applications of KPIs but do not
encompass the overall critical aspect of identifying performance issues that impact operational
goals.
Effective KPIs should provide a comprehensive view that helps in identifying critical performance
gaps impacting the organization's objectives.
Conclusion:
Therefore, the most important aspect of KPIs is that they identify underperforming assets that may
impact the achievement of operational goals.
An enterprise is currently experiencing an unacceptable 8% processing error rate and desires to
manage risk by establishing a policy that error rates cannot exceed 5%. In addition, management
wants to be alerted when error rates meet or exceed 4%. The enterprise should set a key
performance indicator (KPI) metric at which of the following levels?
B
Explanation:
Setting KPIs:
A Key Performance Indicator (KPI) should be set at a level that allows for early detection and
response to deviations from desired performance levels.
In this case, management wants to be alerted when error rates meet or exceed 4%, even though the
acceptable limit is 5%.
Alert Threshold:
Setting the KPI at 4% ensures that management receives timely alerts before reaching the
unacceptable error rate of 5%.
This approach enables proactive management and correction of processes to maintain error rates
within acceptable limits.
Reference:
ISA 315 (Revised 2019), Anlage 5 discusses the importance of monitoring and setting appropriate
thresholds for performance and risk indicators to manage and mitigate risks effectively.
A key risk indicator (KRI) is PRIMARILY used for which of the following purposes?
B
Explanation:
Primary Use of KRIs:
KRIs are primarily used to predict risk events by providing measurable data that signals potential
issues.
This predictive capability helps organizations to mitigate risks before they escalate.
Risk Prediction:
Effective KRIs allow organizations to foresee potential risks and implement measures to address
them proactively.
This improves the overall risk management process by reducing the likelihood and impact of risk
events.
Reference:
ISA 315 (Revised 2019), Anlage 6 emphasizes the use of indicators and metrics to monitor and
predict risks within an organization’s IT and operational environments.
The MOST important reason for developing and monitoring key risk indicators (KRIs) is that they
provide:
C
Explanation:
Step by Step Comprehensive Detailed Explanation with All Reference:
Purpose of KRIs:
KRIs are designed to provide early warnings about potential risk events.
They help organizations to take preventive actions before risks become critical issues.
Early Warning System:
KRIs are critical for proactive risk management, enabling organizations to respond quickly to changes
in risk levels.
They complement other risk management tools by focusing on early detection.
Reference:
ISA 315 (Revised 2019), Anlage 5 discusses the importance of timely and accurate information in
managing and mitigating risks effectively.
When selecting a key risk indicator (KRI), it is MOST important that the KRI:
C
Explanation:
Key Risk Indicators (KRIs):
KRIs are metrics used to signal the potential increase in risk exposures in various areas of an
organization.
They provide early warnings that risk levels are changing, which allows for proactive management.
Importance of Reliability:
The primary purpose of a KRI is to serve as an early warning system for potential risk events.
Reliability in prediction ensures that KRIs are effective in providing timely alerts before risks
materialize.
Reference:
ISA 315 (Revised 2019), Anlage 6 mentions the need for effective monitoring and identification of
risk indicators to manage IT and other operational risks.
Which of the following is a valid source or basis for selecting key risk indicators (KRIs)?
A
Explanation:
Sources for Selecting KRIs:
Historical Enterprise Risk Metrics: These provide data-driven insights into past risk events, helping to
identify patterns and potential future risks.
Risk Workshop Brainstorming: While valuable, this approach relies on subjective input and may not
be as reliable as historical data.
External Threat Reporting Services: Useful for understanding external risks, but may not provide
comprehensive insights specific to the enterprise.
Importance of Historical Data:
Using historical risk metrics ensures that KRIs are based on actual risk occurrences and trends within
the enterprise.
This approach allows for more accurate and relevant KRIs that reflect the enterprise's specific risk
profile.
Reference:
ISA 315 (Revised 2019), Anlage 6 highlights the importance of using reliable and relevant data
sources for risk management, ensuring that KRIs are effective in predicting and monitoring risks.
Risk monitoring is MOST effective when it is conducted:
C
Explanation:
Effectiveness of Risk Monitoring:
Continuous risk monitoring throughout the risk treatment planning process ensures that changes in
the risk environment are detected early and addressed promptly.
It allows for real-time adjustments and improvements to the risk treatment plan.
Phases of Risk Monitoring:
Before Treatment: Initial monitoring helps in understanding the baseline risk levels and identifying
critical areas that need attention.
During Treatment: Ongoing monitoring ensures that the risk treatment measures are effective and
any deviations are corrected timely.
After Treatment: Post-treatment monitoring verifies the long-term effectiveness of the risk responses
and identifies any residual risks.
Reference:
ISA 315 (Revised 2019), Anlage 5 discusses the importance of continuous monitoring in risk
management to adapt to changes and ensure the effectiveness of risk treatments.