An organization has outsourced its lease payment process to a service provider who lacks evidence of compliance with a necessary regulatory standard.
Which risk treatment was adopted by the organization?
Click on the arrows to vote for the correct answer
A. B. C. D.A.
The risk treatment adopted by the organization in this scenario is likely to be either acceptance or mitigation, depending on the specific circumstances and risk appetite of the organization.
Acceptance of risk means that the organization has decided to take no further action to reduce or eliminate the risk, but rather to simply live with the potential consequences if the risk event occurs. This can be an appropriate risk treatment when the cost of mitigating the risk outweighs the potential impact of the risk event, or when the organization is willing to accept a certain level of risk in order to achieve business objectives. In the case of outsourcing lease payments to a service provider without evidence of compliance with a necessary regulatory standard, acceptance of the risk may be appropriate if the organization has determined that the potential impact of non-compliance is not significant enough to justify the cost and effort of finding a new service provider or implementing additional controls.
Mitigation of risk means that the organization has taken steps to reduce or eliminate the risk, such as by implementing additional controls or transferring the risk to another party. In the case of outsourcing lease payments to a service provider without evidence of compliance with a necessary regulatory standard, mitigation of the risk might involve implementing additional controls to monitor the service provider's compliance, or negotiating a contract with the service provider that includes specific compliance requirements and penalties for non-compliance.
Transfer of risk means that the organization has shifted the risk to another party, such as through insurance or by outsourcing the activity to a third party that assumes responsibility for the risk. In the case of outsourcing lease payments to a service provider without evidence of compliance with a necessary regulatory standard, transfer of the risk might involve finding a different service provider who can demonstrate compliance with the required standard.
Avoidance of risk means that the organization has decided to avoid the activity that creates the risk altogether. In the case of outsourcing lease payments to a service provider without evidence of compliance with a necessary regulatory standard, avoidance of the risk might involve bringing the lease payment process back in-house, rather than outsourcing it to a third party.
Based on the information given, it is unlikely that avoidance is the appropriate risk treatment, as the organization has already outsourced the lease payment process. Transfer may be appropriate if the organization is able to find a different service provider that meets the necessary regulatory standard, but this may not be feasible or cost-effective. Therefore, the most likely risk treatments are acceptance or mitigation, depending on the specific circumstances and risk appetite of the organization.