CGEIT Question #185: Real Exam Question with Answer & Explanation

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

Explanation

The primary purpose of an effective set of Key Risk Indicators (KRIs) is to identify possible future adverse impacts on the enterprise.

Common mistakes.

• B. While technology may be used to track KRIs, evaluating existing technology for risk monitoring capabilities is not the primary purpose of KRIs themselves.
• C. KRIs can support establishing executive buy-in by providing data-driven insights, but their main purpose is risk identification and monitoring, not stakeholder management.
• D. 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)

Reference. https://learn.microsoft.com/en-us/compliance/regulatory/risk-assessment-methodology

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