Isaca IT Risk Fundamentals Practice Test - Questions Answers, Page 6

The enterprise has concluded that the cost of mitigating the risk of theft of sales team laptops while in transit is higher than the potential loss, leading to the decision to accept the risk.

Risk Response Strategies Overview:

Risk Acceptance: Choosing to accept the risk and not take any action to mitigate it.

Risk Avoidance: Taking action to completely avoid the risk.

Risk Mitigation: Implementing measures to reduce the likelihood or impact of the risk.

Risk Transfer: Shifting the risk to another party (e.g., through insurance).

Explanation of Risk Acceptance:

Risk acceptance is appropriate when the cost of mitigating the risk is higher than the potential loss.

In this case, the cost-benefit analysis shows that it is more practical to accept the risk rather than invest in expensive mitigation measures.

ISA 315 (Revised 2019), Anlage 6 provides guidance on assessing risks and determining appropriate responses based on the cost and impact of potential risks.

The first step in the risk response process is to review the risk analysis to ensure a thorough understanding of the identified risks and their potential impacts.

Risk Response Process Steps:

Review Risk Analysis: Understanding the nature and extent of the risks identified during the risk assessment.

Determine Risk Appetite: Establishing the level of risk the organization is willing to accept.

Prioritize Responses: Based on the impact and likelihood of risks, responses are prioritized to address the most significant risks first.

Reviewing the risk analysis is crucial as it lays the foundation for all subsequent steps in the risk response process.

This step ensures that decision-makers have accurate and comprehensive information about the risks.

ISA 315 (Revised 2019), Anlage 5 emphasizes the importance of understanding and evaluating risks as part of the overall risk assessment and response process.

By moving its data center from a flood-prone area to one that is not in a flood zone, the organization has chosen a risk avoidance strategy.

Risk Response Strategies Overview:

Risk Acceptance: Choosing to accept the risk without taking any action.

Risk Avoidance: Taking action to completely avoid the risk.

Risk Mitigation: Implementing measures to reduce the likelihood or impact of the risk.

Risk Transfer: Shifting the risk to another party (e.g., through insurance).

Explanation of Risk Avoidance:

Risk avoidance involves changing plans to circumvent the risk entirely.

In this case, relocating the data center to an area not prone to flooding eliminates the risk of flood-related disruptions.

ISA 315 (Revised 2019), Anlage 6 discusses various risk response strategies and emphasizes the importance of taking actions to avoid risks when feasible.

Definition and Context:

Mitigation involves taking steps to reduce the severity, seriousness, or painfulness of something, often by implementing new controls or safeguards. This can include processes, procedures, or physical measures designed to reduce risk.

Avoidance means completely avoiding the risk by not engaging in the activity that generates the risk.

Acceptance means acknowledging the risk and choosing not to act, either because the risk is deemed acceptable or because there is no feasible way to mitigate or avoid it.

Application to IT Risk Management:

In IT risk management, Mitigation often involves implementing new controls such as security patches, firewalls, encryption, user authentication protocols, and regular audits to reduce risk levels.

This aligns with the principles outlined in various IT control frameworks and standards, such as ISA 315 which emphasizes the importance of controls in managing IT-related risks.

Conclusion:

Therefore, when considering risk response strategies involving the implementation of new controls, Mitigation is the correct answer as it specifically addresses the action of implementing measures to reduce risk.

Definition and Context:

A Business Impact Assessment (BIA) is a process that helps organizations identify critical business functions and the effects that a business disruption might have on them. It is fundamental in shaping business continuity and disaster recovery plans.

Impact on Business Continuity and Disaster Recovery:

Material updates to the incident response plan can affect business continuity, but they are typically tactical responses to incidents rather than strategic shifts in understanding business impact.

Data backups being moved to the cloud can improve resilience and recovery times, but the strategic importance of this change is contingent on the criticality of the data and the reliability of the cloud provider.

Changes to the BIA directly affect the accuracy and appropriateness of plans associated with business continuity and disaster recovery. The BIA defines what is critical, the acceptable downtime, and the recovery priorities. Therefore, any changes here can significantly alter the continuity and recovery strategies.

Conclusion:

Given the strategic role of the BIA in business continuity planning, changes to the BIA have the most substantial impact on the accuracy and appropriateness of business continuity and disaster recovery plans.

Definition and Purpose:

A Business Continuity Plan (BCP) is a document that outlines how a business will continue operating during an unplanned disruption in service. It focuses on the processes and procedures necessary to ensure that critical business functions can continue.

BCP Components:

The BCP typically includes Business Impact Assessments (BIAs), which identify critical functions and the impact of a disruption.

It also encompasses risk assessments, recovery strategies, and continuity strategies for critical business functions.

Explanation of Options:

A methodical plan detailing the steps of incident response activities describes more of an Incident Response Plan (IRP).

B a document of controls that reduce the risk of losing critical processes could be part of a BCP but is more characteristic of a risk management plan.

C accurately reflects the BCP's focus on identifying and mitigating risks to business functions through BIAs, making it the most comprehensive and accurate description.

Conclusion:

Therefore, C correctly identifies a BCP as a document that focuses on BIAs to manage risks to critical business processes.

Context of Multi-Factor Authentication:

Multi-Factor Authentication (MFA) adds layers of security and significantly reduces cybersecurity risks by requiring multiple forms of verification before granting access.

Understanding Residual Risk:

Residual risk is the remaining risk after controls have been implemented. If the risk assessment shows that the residual risk is within the organization's risk appetite, it means the organization is willing to accept this level of risk.

Risk Response Strategies:

Accept: Recognize the risk and do not take any further action to mitigate it because it is within acceptable limits.

Mitigate: Take additional measures to further reduce the risk, which is unnecessary if it is already within acceptable levels.

Transfer: Shift the risk to another party, such as through insurance, which might be unnecessary if the risk is already acceptable.

Conclusion:

Since the residual risk is within the organization's risk appetite, the appropriate action is to Accept this residual risk, indicating no further mitigation is needed.

Project Management Context:

The critical path in project management is the sequence of stages determining the minimum time needed for an operation.

Factors Affecting the Critical Path:

Regulatory requirements are essential but typically do not define the sequence of tasks.

Cost-benefit analysis informs decision-making but does not directly determine task dependencies or timings.

Specified end dates directly impact the scheduling and dependencies of tasks, defining the critical path to ensure project completion on time.

Conclusion:

Specified end dates are the most critical information for determining the critical path, as they establish the framework within which all tasks must be completed, ensuring the project adheres to its schedule.

Risk Response Process Steps:

The risk response process typically involves several key steps: analyzing risk response options, prioritizing risk responses, and developing risk response plans.

Analyzing risk response options occurs earliest because it involves evaluating the various ways to address identified risks.

Step-by-Step Process:

Analyzing Risk Response Options: This is the initial step where different potential responses to the identified risks are considered. Options may include risk acceptance, avoidance, mitigation, or transfer.

Prioritizing Risk Responses: After analyzing the options, the next step is to prioritize them based on factors such as impact, likelihood, and the cost of implementation.

Developing Risk Response Plans: Finally, detailed plans are created for the prioritized risk responses, outlining the specific actions to be taken, resources required, and timelines.

Reference:

ISA 315 (Revised 2019), Anlage 5 provides a framework for understanding the components of risk management, including the evaluation and selection of appropriate risk responses.