CISM · Question #500
Which of the following should be the PRIMARY basis for determining risk appetite?
The correct answer is D. Organizational objectives. Risk appetite defines how much risk an organization is willing to accept in pursuit of its goals. Because risk appetite exists to support the achievement of organizational objectives, those objectives must be its primary basis. Audit findings (A) identify gaps but don't define…
Question
Which of the following should be the PRIMARY basis for determining risk appetite?
Options
- AIndependent audit findings
- BResidual risk level
- CRisk assessment results
- DOrganizational objectives
How the community answered
(18 responses)- A6% (1)
- D94% (17)
Explanation
Risk appetite defines how much risk an organization is willing to accept in pursuit of its goals. Because risk appetite exists to support the achievement of organizational objectives, those objectives must be its primary basis. Audit findings (A) identify gaps but don't define appetite. Residual risk (B) is an output of risk management, not an input to appetite-setting. Risk assessment results (C) inform discussions but are secondary to the strategic direction set by organizational objectives.
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