The Importance of Risk Analysis in CRISC: Certified Risk and Information Systems Control

D.

A risk analysis deals with the potential size and likelihood of loss.

A risk analysis involves identifying the most probable threats to an organization and analyzing the related vulnerabilities of the organization to these threats.

A risk from an organizational perspective consists of: Threats to various processes of organization.

-> Threats to physical and information assets.

-> Likelihood and frequency of occurrence from threat.

-> Impact on assets from threat and vulnerability.

-> Risk analysis allows the auditor to do the following tasks : -> Identify threats and vulnerabilities to the enterprise and its information system.

-> Provide information for evaluation of controls in audit planning.

-> Aids in determining audit objectives.

-> Supporting decision based on risks.

Incorrect Answers: A: Assuming equal degree of protection would only be rational in the rare event that all the assets are similar in sensitivity and criticality.

Hence this is not practiced in risk analysis.

B: Since the likelihood determines the size of the loss, hence both elements must be considered in the calculation.

C: A risk analysis would not normally consider the benchmark of similar companies as providing relevant information other than for comparison purposes.

The correct answer is D: Risk analysis should address the potential size and likelihood of loss.

Risk analysis is the process of identifying, assessing, and prioritizing risks to the confidentiality, integrity, and availability of an organization's information assets. It is an essential component of an effective information security program. Risk analysis helps organizations understand the potential impact of threats and vulnerabilities and make informed decisions about risk mitigation.

Option A is incorrect because it assumes that all assets have equal value and require equal protection. In reality, some assets may be more critical than others and require a higher degree of protection.

Option B is incorrect because both the likelihood and size of the loss are important factors to consider in risk analysis. A low likelihood event that would result in a significant loss should be prioritized over a high likelihood event that would result in a minor loss.

Option C is incorrect because risk analysis should be tailored to the specific organization and its unique risks. Limiting the scope to a benchmark of similar companies may not capture all the risks that are specific to the organization.

Option D is correct because risk analysis should address both the potential size and likelihood of loss. This helps organizations prioritize risks and allocate resources to the most critical risks. By assessing both the likelihood and impact of risks, organizations can make informed decisions about risk mitigation strategies.