Aligning Control KPI Thresholds

B.

When defining thresholds for control key performance indicators (KPIs), it is most helpful to align key risk indicators (KRIs) with the risk appetite of the business.

Key risk indicators (KRIs) are used to measure the level of risk associated with specific business objectives or processes. These indicators are typically designed to provide an early warning of potential risks or issues that could impact the achievement of business objectives.

Control key performance indicators (KPIs) are used to measure the effectiveness of controls put in place to manage risks. These indicators are used to monitor the performance of controls over time and to identify potential weaknesses in the control environment.

When defining thresholds for control KPIs, it is important to align them with the risk appetite of the business. Risk appetite is the level of risk that an organization is willing to accept in pursuit of its business objectives. By aligning control KPIs with risk appetite, the organization can ensure that it is monitoring risks that are relevant to its objectives and that it is maintaining an appropriate level of control over those risks.

Aligning control KPIs with audit findings or information risk assessments is important, but it is not as helpful as aligning them with KRIs and risk appetite. Audit findings and information risk assessments are important inputs to the risk management process, but they are not always directly aligned with the objectives of the business. By focusing on KRIs and risk appetite, organizations can ensure that they are managing the risks that are most relevant to their business objectives.