Isaca Updated CGEIT Exam Questions and Answers by leighton

Establishing a uniform definition for likelihood and impact through risk management standards primarily addresses the concern of conflicting interpretations of risk levels. This is because likelihood and impact are two key factors that determine the level of risk associated with a threat or event. Different stakeholders may have different perceptions and expectations of what constitutes a high, medium, or low likelihood or impact, which can lead to inconsistent or inaccurate risk assessment and management. By defining and applying a common set of criteria and scales for likelihood and impact, risk management standards can help to ensure a consistent and objective evaluation and communication of risk levels across the organization

 A balanced scorecard is a strategic management tool that measures and monitors the performance of an organization against its vision, mission, goals, and objectives. It uses four perspectives: financial, customer, internal process, and learning and growth. A balanced scorecard can help demonstrate the effectiveness of the IT reorganization by showing how the IT function has improved in terms of delivering value to the business, satisfying customer needs and expectations, optimizing internal processes and workflows, and enhancing the skills and capabilities of the IT staff. According to one of the web search results1, “a balanced scorecard can help evaluate the effectiveness of IT governance by aligning IT activities with business strategies, assessing IT value delivery, identifying IT strengths and weaknesses, and facilitating continuous improvement.” The number of help desk calls, a survey of IT staff, and IT cost reduction are not the best indicators of the effectiveness of the IT reorganization. They are more likely to reflect operational or tactical aspects of IT service delivery, rather than strategic or holistic ones. They may also be influenced by other factors that are not related to the IT reorganization, such as user behavior, staff morale, or market conditions. References := Service Delivery for IT and Business | Splunk

According to the web search results, one of the most important aspects of risk management is the timely and accurate reporting of risk events, which are incidents or occurrences that have a negative impact on the objectives, operations, or reputation of an organization1. A framework to ensure effective reporting of risk events can help to identify, analyze, communicate, and respond to risks in a systematic and consistent manner2. Without such a framework, the organization may fail to capture, escalate, and learn from risk events, and may expose itself to greater losses,liabilities, and regulatory sanctions3. Therefore, the lack of a framework to ensure effective reporting of risk events would be of most concern regarding the effectiveness of risk management processes.

The other options are less concerning than option D, although they may also indicate some weaknesses in the risk management processes. Key risk indicators (KRIs) are metrics that measure the likelihood or impact of potential or actual risks4. While they are useful for monitoring and managing risks, they are not essential for the effectiveness of risk management processes. Risk management requirements are criteria or standards that define the expectations and responsibilities for managing risks. Including them in performance reviews can help to align the incentives and behaviors of employees with the risk appetite and strategy of the organization. However, they are not the only way to ensure accountability and compliance with risk management processes. The plans and procedures are documents that describe the objectives, scope, roles, activities, and outputs of risk management processes. Updating them on an annual basis can help to reflect the changes in the internal and external environment that affect the risks faced by the organization. However, they are not the only source of guidance and information for risk management processes.

References :=

Risk Event - Definition from KWHS

Risk Management - Overview, Importance and Processes

Transforming risk efficiency and effectiveness | McKinsey

Key Risk Indicators (KRIs) - Definition from KWHS

[Risk Management Requirements - an overview | ScienceDirect Topics]

[Risk Management Requirements - an overview | ScienceDirect Topics]

[Risk Management Plan - an overview | ScienceDirect Topics]

[Risk Management Plan - an overview | ScienceDirect Topics]

 According to the CGEIT certification guide, key risk indicators (KRIs) are the best way to provide ongoing assurance that significant IT risk is being proactively monitored and does not exceed agreed risk tolerance levels. KRIs are metrics that measure the likelihood or impact of potential or actual risks, and provide early warning signals of increasing risk exposures1. KRIs can help IT management to track and report the status and trends of IT risks, and to trigger timely responses and actions when the risk levels approach or exceed the predefined thresholds2. The other options are less suitable than option C, as they do not provide ongoing assurance or proactive monitoring of IT risk. An IT risk appetite statement is a document that expresses the amount and type of risk that an organization is willing to take in order to meet their strategic objectives3. A risk management policy is a document that defines the principles, framework, and processes for managing risks in an organization. A risk register is a tool that records and tracks the identified risks, their causes, impacts, likelihood, responses, and owners.

References :=

CGEIT certification guide, domain 3: Risk Optimization, section 3.4: Risk Monitoring and Assurance, page 98.

Key Risk Indicators (KRIs) - Definition from KWHS

Risk Appetite - an overview | ScienceDirect Topics

Risk Management Policy - an overview | ScienceDirect Topics

Risk Register - an overview | ScienceDirect Topics