CGEIT · Question #160
Establishing a uniform definition for likelihood and impact BEST enables an enterprise to:
The correct answer is A. reduce variance in the assessment of risk.. Establishing uniform definitions for risk likelihood and impact is crucial because it standardizes risk evaluation, leading to more consistent and comparable assessments across an enterprise.
Question
Establishing a uniform definition for likelihood and impact BEST enables an enterprise to:
Options
- Areduce variance in the assessment of risk.
- Bdevelop key risk indicators (KRIs).
- Cprioritize threat assessment.
- Dreduce risk appetite and tolerance levels.
How the community answered
(45 responses)- A89% (40)
- B2% (1)
- C7% (3)
- D2% (1)
Why each option
Establishing uniform definitions for risk likelihood and impact is crucial because it standardizes risk evaluation, leading to more consistent and comparable assessments across an enterprise.
A uniform definition for likelihood and impact provides a consistent framework for all stakeholders to evaluate risks, thereby minimizing subjective interpretations and ensuring that risks are assessed in a comparable manner, which directly reduces the variance in assessment outcomes.
Developing KRIs is a separate activity that utilizes risk information, but standard definitions primarily ensure consistent assessment, not KRI development itself.
Prioritizing threat assessment is a subsequent step in risk management; consistent definitions enable accurate assessment first, which then informs prioritization.
Reducing risk appetite and tolerance levels is a strategic decision related to risk acceptance, distinct from the objective of standardizing risk assessment inputs.
Concept tested: Risk assessment consistency and standardization
Topics
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