CGEIT · Question #185
Which of the following is the PRIMARY purpose of an effective set of key risk indicators (KRIs)?
The correct answer is A. Identifying possible future adverse impacts on the enterprise. The primary purpose of an effective set of Key Risk Indicators (KRIs) is to identify possible future adverse impacts on the enterprise.
Question
Which of the following is the PRIMARY purpose of an effective set of key risk indicators (KRIs)?
Options
- AIdentifying possible future adverse impacts on the enterprise
- BEvaluating existing technology for risk monitoring capabilities
- CEstablishing executive level buy-in of the risk program
- DQuantifying the productivity of the risk management team
How the community answered
(38 responses)- A87% (33)
- B3% (1)
- C8% (3)
- D3% (1)
Why each option
The primary purpose of an effective set of Key Risk Indicators (KRIs) is to identify possible future adverse impacts on the enterprise.
KRIs are forward-looking metrics designed to provide early warnings of increasing risk exposure, allowing the enterprise to take proactive measures to mitigate potential negative consequences before they materialize or escalate. They help in predicting and preventing future adverse events.
While technology may be used to track KRIs, evaluating existing technology for risk monitoring capabilities is not the primary purpose of KRIs themselves.
KRIs can support establishing executive buy-in by providing data-driven insights, but their main purpose is risk identification and monitoring, not stakeholder management.
KRIs measure risk exposure and potential impact, not the productivity of the risk management team, which would typically be measured by performance metrics related to risk process efficiency.
Concept tested: Purpose of Key Risk Indicators (KRIs)
Source: https://learn.microsoft.com/en-us/compliance/regulatory/risk-assessment-methodology
Topics
Community Discussion
No community discussion yet for this question.