CRISC · Question #281
Which of the following is the MOST important characteristic of a key risk indicator (KRI) to enable decision-making?
The correct answer is D. Illustrating changes in risk trends. Key risk indicators (KRIs) are crucial for decision-making because they track changes in risk over time, allowing for proactive adjustments to risk management strategies.
Question
Which of the following is the MOST important characteristic of a key risk indicator (KRI) to enable decision-making?
Options
- AMonitoring the risk until the exposure is reduced
- BSetting minimum sample sizes to ensure accuracy
- CListing alternative causes for risk events
- DIllustrating changes in risk trends
How the community answered
(56 responses)- A2% (1)
- B5% (3)
- C2% (1)
- D91% (51)
Why each option
Key risk indicators (KRIs) are crucial for decision-making because they track changes in risk over time, allowing for proactive adjustments to risk management strategies.
Monitoring risk until exposure is reduced is a risk management activity, not a characteristic of a KRI itself for decision-making.
While accuracy is important, setting minimum sample sizes is a methodological detail, not the most important characteristic of a KRI for decision-making.
Listing alternative causes for risk events is part of risk analysis, but a KRI's primary role for decision-making is to show trends in risk, not root causes.
KRIs are leading indicators designed to provide early warnings of increasing or decreasing risk exposure. By illustrating changes in risk trends, they enable organizations to make timely, informed decisions about resource allocation and control implementation before a risk event materializes or escalates.
Concept tested: Key Risk Indicator (KRI) purpose
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