Free Isaca IT-Risk-Fundamentals Practice Exam with Questions & Answers | Set: 4

Detailed risk management reports should be targeted based on the "need to know" principle. This means providing information only to those who need it to fulfill their roles and responsibilities. This helps ensure that information is relevant and actionable.

Industry benchmarks (B) can inform reporting, but the audience's needs are paramount. Seniority levels (C) can be a factor, but the specific need for the information is more important.

An absolute prohibition on risk means that an enterprise avoids any and all forms of risk, regardless of potential benefits. This approach can lead to the following issues:

Inefficiency in Resource Allocation: Absolute risk avoidance can cause an enterprise to allocate resources ineffectively. For example, by avoiding all risks, the enterprise may miss out on opportunities that could bring substantial benefits. Resources that could be invested in innovation or improvement are instead tied up in mitigating even the smallest of risks.

Stifling Innovation and Growth: Enterprises that are overly risk-averse may hinder innovation and growth. Taking calculated risks is essential for driving new initiatives, products, or services. Without accepting some level of risk, companies might lag behind competitors who are willing to innovate and take strategic risks.

Poor Risk Management Practices: By trying to avoid all risks, enterprises might develop a risk management strategy that is more about avoidance than mitigation and management. Effective risk management involves identifying, assessing, and mitigating risks, not completely avoiding them. This ensures that the company is prepared for potential challenges and can manage them proactively.

References:

ISA 315 Anlage 5 and Anlage 6 discuss the importance of understanding and managing risks associated with IT environments. They highlight the need for a balanced approach to risk management that includes both manual and automated controls to handle various risk levels (e.g., operational, compliance, strategic)​​​​.

SAP Reports and Handbooks highlight the necessity of balancing risk with operational efficiency to maintain effective resource allocation and drive business objectives forward​​​​.

An example of a preventive control is data management checks on sensitive data processing procedures. Here’s why:

File Integrity Monitoring (FIM) on Personal Database Stores: FIM is a detective control. It monitors changes to files and alerts administrators when unauthorized modifications occur.

Air Conditioning Systems with Excess Capacity to Permit Failure of Certain Components: This is an example of a contingency plan or redundancy, designed to ensure availability but not directly related to preventing security incidents.

Data Management Checks on Sensitive Data Processing Procedures: These checks are designed to ensure that data is processed correctly and securely from the start, preventing errors and unauthorized changes to sensitive data. This is a preventive measure as it aims to prevent issues before they occur.

Therefore, data management checks on sensitive data processing procedures are a preventive control.

The sensitivity of an IT asset is determined primarily by the potential damage to the business due to unauthorized disclosure. This assessment considers the confidentiality, integrity, and availability of the asset and the impact its compromise could have on the organization. Sensitive assets often contain critical information or support vital business processes, making their protection paramount. By focusing on the potential damage from unauthorized disclosure, organizations can prioritize their security efforts on assets that would cause significant harm if compromised. This approach is consistent with risk assessment methodologies found in standards such as ISO 27001 and NIST SP 800-53.

For senior management, a risk report provides the most useful information on the status of a project to implement a risk-mitigating control. Here’s why:

Comprehensive Overview: A risk report offers a detailed overview of all identified risks, their current status, and the effectiveness of the controls in place. This comprehensive view is crucial for senior management to understand the progress and any remaining challenges.

Actionable Insights: Risk reports include actionable insights and recommendations, helping management make informed decisions about resource allocation, prioritizing efforts, and implementing further risk mitigation strategies.

Ongoing Monitoring: Regular risk reports allow for ongoing monitoring of the project's status, ensuring that any deviations from the planned risk mitigation activities are identified and addressed promptly.

References: According to professional auditing standards like ISA 315, ongoing communication and reporting on risk management activities are vital for effective governance and oversight by senior management​​​​.