Requirements for Creating Risk Scenarios

BCD.

Creating a scenario requires determination of the value of an asset or a business process at risk and the potential threats and vulnerabilities that could cause loss.

The risk scenario should be assessed for relevance and realism, and then entered into the risk register if found to be relevant.

In practice following steps are involved in risk scenario development: -> First determine manageable set of scenarios, which include: - Frequently occurring scenarios in the industry or product area.

- Scenarios representing threat sources that are increasing in count or severity level.

- Scenarios involving legal and regulatory requirements applicable to the business.

-> After determining manageable risk scenarios, perform a validation against the business objectives of the entity.

-> Based on this validation, refine the selected scenarios and then detail them to a level in line with the criticality of the entity.

-> Lower down the number of scenarios to a manageable set.

Manageable does not signify a fixed number, but should be in line with the overall importance and criticality of the unit.

-> Risk factors kept in a register so that they can be reevaluated in the next iteration and included for detailed analysis if they have become relevant at that time.

-> Risk factors kept in a register so that they can be reevaluated in the next iteration and included for detailed analysis if they have become relevant at that time.

-> Include an unspecified event in the scenarios, that is, address an incident not covered by other scenarios.

Incorrect Answers: A: Cause-and-effect analysis is a predictive or diagnostic analytical tool used to explore the root causes or factors that contribute to positive or negative effects or outcomes.

It is used during the process of exposing risk factors.

When creating risk scenarios, there are several requirements that need to be taken into account to ensure that the scenarios are comprehensive and accurate. These requirements include:

A. Determination of cause and effect: This involves identifying the potential causes of risk and the likely effects that would result from those risks. It is important to understand the relationship between cause and effect so that the risk scenarios can be developed in a logical and meaningful way.

B. Determination of the value of business process at risk: This requirement involves identifying the business processes that are most critical to the organization and determining their value in terms of revenue, reputation, and other factors. This information is essential for determining the potential impact of a risk event on the organization and for prioritizing risk management efforts.

C. Potential threats and vulnerabilities that could cause loss: This requirement involves identifying the potential threats and vulnerabilities that could cause loss to the organization. This includes both internal and external threats, such as cyber attacks, natural disasters, and human error. By identifying these threats and vulnerabilities, the organization can develop risk scenarios that are comprehensive and realistic.

D. Determination of the value of an asset: This requirement involves identifying the assets that are most critical to the organization and determining their value in terms of revenue, reputation, and other factors. This information is essential for determining the potential impact of a risk event on the organization and for prioritizing risk management efforts.

Overall, by taking these requirements into account when creating risk scenarios, organizations can develop scenarios that are comprehensive, accurate, and meaningful, which can help them better manage and mitigate risk.