How does an enterprise benefit from implementing a set of key risk indicators (KRIs)?
Click on the arrows to vote for the correct answer
A. B. C. D.B.
https://www.metricstream.com/insights/Key-Risk-indicators-ERM.htmImplementing a set of key risk indicators (KRIs) provides several benefits to an enterprise. KRIs are a set of metrics that measure the level of risk an organization is exposed to and help to identify potential risk events before they occur. Here are the benefits of implementing KRIs:
B. Risk exposures are monitored to ensure they remain within risk appetite: One of the significant benefits of implementing KRIs is that it helps the organization monitor risk exposures to ensure they remain within the organization's risk appetite. KRIs help to identify potential risks and measure their impact, which enables the organization to take appropriate actions to manage the risk exposures.
A. The set of KRIs remains relevant over time: KRIs are developed based on the organization's objectives, risk appetite, and the specific risks the organization faces. As the organization's objectives, risk appetite, and risks change over time, the set of KRIs also needs to be updated. Implementing KRIs helps the organization to identify and monitor the most relevant risk indicators, ensuring that the set of KRIs remains relevant over time.
D. The frequency of risk data gathering and reporting is minimized: KRIs help the organization to measure risk exposure and identify potential risks before they occur. This allows the organization to focus on the most significant risks and reduce the frequency of risk data gathering and reporting.
C. The need for a formal risk and control assessment program is eliminated: While KRIs are an essential component of a risk management program, they do not eliminate the need for a formal risk and control assessment program. A risk and control assessment program helps to identify and assess risks, implement controls, and monitor the effectiveness of the controls. KRIs complement the risk and control assessment program by providing a set of metrics to measure risk exposure.
In summary, implementing KRIs helps the organization to monitor risk exposures, ensure the set of KRIs remains relevant over time, reduce the frequency of risk data gathering and reporting, and complement a formal risk and control assessment program.