CRISC · Question #192
Which of the following provides the MOST useful information for developing key risk indicators (KRIs)?
The correct answer is D. Possible causes of materialized risk. Understanding the possible causes of materialized risk provides the most valuable information for developing Key Risk Indicators (KRIs), as KRIs are metrics that signal increasing risk exposure.
Question
Which of the following provides the MOST useful information for developing key risk indicators (KRIs)?
Options
- ABusiness impact analysis (BIA) results
- BRisk scenario ownership
- CRisk thresholds
- DPossible causes of materialized risk
How the community answered
(31 responses)- A13% (4)
- B6% (2)
- C3% (1)
- D77% (24)
Why each option
Understanding the possible causes of materialized risk provides the most valuable information for developing Key Risk Indicators (KRIs), as KRIs are metrics that signal increasing risk exposure.
BIA results help understand the *impact* of a materialized risk, but not necessarily the *causes* or precursors that would serve as effective KRIs.
Risk scenario ownership determines accountability, which is important for risk management but doesn't directly provide information for *developing* the indicators themselves.
Risk thresholds define acceptable limits for risk, which are used to evaluate KRIs, but they are typically set *after* KRIs are developed, not as the primary input for creating them.
Key Risk Indicators (KRIs) are designed to provide an early warning of potential risk events. Therefore, identifying the *possible causes of materialized risk* directly informs what specific conditions or precursors should be monitored to predict when a risk might become a reality.
Concept tested: Key Risk Indicator (KRI) development
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