Exactprep CRISC Questions

The best course of action for a risk practitioner who finds that the approved risk action plan has not been completed but other risk mitigation actions have been implemented is to verify the sufficiency of mitigating controls with the risk owner. This is because the risk owner is the person who is accountable for the risk and the risk response strategy, and therefore should be consulted to ensure that the alternative actions are adequate and effective in reducing the risk to an acceptable level. The other options are not the best course of action, although they may also be performed after verifying the sufficiency of mitigating controls with the risk owner. Reviewing the cost-benefit of mitigating controls, marking the risk status as unresolved within the risk register, and updating the risk register with implemented mitigating actions are secondary actions that depend on the outcome of the verification process. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 4, Section 4.3.2, p. 193.

New regulatory requirements impacting IT are those that impose new obligations, restrictions, or standards on how an organization uses, manages, or secures its IT systems, data, or services1. Examples of such regulations include the GDPR, the CCPA, the HIPAA, or the PCI-DSS2. New regulatory requirements impacting IT can pose significant challenges and risks for an organization, such as:

Compliance costs and efforts, such as updating policies, procedures, and systems, training staff, or hiring experts

Noncompliance penalties and consequences, such as fines, lawsuits, sanctions, or reputational damages

Operational disruptions or inefficiencies, such as system changes, data migrations, or service interruptions

Competitive disadvantages or opportunities, such as losing or gaining customers, partners, or markets3

The first step that should be done when a company is made aware of new regulatory requirements impacting IT is to review the risk tolerance and appetite. Risk tolerance is the acceptable level of variation that an organization is willing to accept around its risk appetite. Risk appetite is the amount and type of risk that an organization is willing to take in order to meet its strategic objectives. By reviewing the risk tolerance and appetite, the company can:

Establish a clear and consistent understanding of the organization’s goals, values, and expectations regarding the new regulatory requirements impacting IT

Assess the current and potential impacts of the new regulatory requirements impacting IT on the organization’s performance, operations, or assets

Determine the level of risk exposure and acceptance that the organization is comfortable with, and identify the risk thresholds or limits that should not be exceeded

Align the risk management strategies and actions with the organization’s risk tolerance and appetite, and prioritize the most critical and urgent risks to be addressed

Communicate and report the risk tolerance and appetite to the stakeholders and regulators, and ensure transparency and accountability

References = Regulating emerging technology | Deloitte Insights, Ten Key Regulatory Challenges of 2024 - kpmg.com, The Risks of Non-Compliance with Data Protection Laws, [Risk Tolerance - COSO], [Risk Appetite - COSO], [Risk Appetite and Tolerance - IRM]

According to the CRISC Review Manual, the primary purpose of periodically reviewing an organization’s risk profile is to enable risk-based decision making, because it helps to ensure that the risk information is current, relevant, and accurate. The risk profile is a snapshot of the organization’s risk exposure at a given point in time, based on the risk identification, analysis, and evaluation processes. Periodically reviewing the risk profile allows the organization to monitor the changes in the risk environment, the effectiveness of the risk responses, and the impact of the risk events. This enables the organization to make informed decisions about the risk management strategies and priorities. The other options are not the primary purpose of periodically reviewing the risk profile, as they are related to other aspects of the risk management process. Aligning business objectives with risk appetite is the purpose of establishing the risk context, which defines the scope and boundaries of the risk management activities. Designing and implementing risk response action plans is the purpose of the risk response process, which involves selecting and executing the appropriate risk responses. Updating risk responses in the risk register is the outcome of the risk monitoring and reporting process, which involves tracking the risk performance and communicating the risk information to the stakeholders. References = CRISC Review Manual, 7th Edition, Chapter 2, Section 2.2.4, page 86.

The most helpful activity for a risk practitioner when ensuring that mitigated risk remains within acceptable limits is to implement a process for ongoing monitoring of control effectiveness. This would enable the risk practitioner to track the performance of the controls, identify any deviations or gaps, and take corrective actions as needed. Ongoing monitoring of control effectiveness would also provide assurance that the risk responses are working as intended, and that the residual risk is aligned with the risk appetite and tolerance of the enterprise. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 4, Section 4.3.1, page 188.