The Best Justification for Accepting IT Risk of a Subsidiary Located in Another Country

C.

The BEST justification for an enterprise to accept the IT risk of a subsidiary located in another country even though it exceeds the enterprise's risk appetite would be to comply with local regulations (option D).

Explanation: Organizations may have subsidiaries or business units operating in different countries. In such cases, the organization's risk appetite and risk tolerance levels may vary due to differences in legal, economic, and cultural factors. However, the organization needs to ensure that all its subsidiaries comply with the laws and regulations of their respective countries.

Compliance with local regulations is a crucial aspect of IT risk management. It helps to ensure that the organization and its subsidiaries operate within the legal framework of the countries they operate in. Failure to comply with local regulations can lead to legal and financial penalties, reputational damage, and other negative consequences.

Therefore, if the enterprise decides to accept the IT risk of a subsidiary located in another country even though it exceeds the enterprise's risk appetite, the BEST justification for this decision would be to comply with local regulations (option D). By complying with local regulations, the enterprise ensures that its subsidiary operates within the legal framework of the country, which can mitigate the risk of legal and financial penalties.

While local market common practices (option A) may influence risk appetite, it should not be the sole basis for accepting IT risk. Risk framework alignment (option B) and technical gaps among subsidiaries (option C) are also important considerations in IT risk management. However, they may not be the best justification for accepting IT risk that exceeds the enterprise's risk appetite.