Reviewing Options for Mitigating Risk

A.

When preparing a risk treatment plan, several options exist for mitigating identified risks. Some of these options may include transferring the risk to a third-party, accepting the risk, or implementing controls to mitigate or reduce the risk.

Of the options listed in the question, the most important consideration when reviewing options for mitigating risk is cost-benefit analysis.

Cost-benefit analysis involves determining the potential costs and benefits of each risk treatment option. It involves analyzing the cost of implementing a control or transferring a risk versus the potential benefit of doing so. The objective is to ensure that the cost of implementing the control is lower than the potential loss or impact of the risk.

For example, if implementing a control to mitigate a risk is estimated to cost $1 million, but the potential loss if the risk were to materialize is only $100,000, it would not be cost-effective to implement the control.

User acceptance and business impact analysis (BIA) are also important considerations when preparing a risk treatment plan. User acceptance ensures that controls implemented are acceptable to end-users and are easy to use. Business impact analysis (BIA) helps to identify critical business processes and systems and assess the impact of a disruption or failure. However, these considerations are secondary to cost-benefit analysis, as they are more focused on ensuring the effectiveness of controls rather than their cost-effectiveness.

Control identification is the process of identifying potential controls that can be implemented to mitigate a risk. It is an important step in the risk treatment plan process but is not as important as cost-benefit analysis. The reason is that control identification does not consider the cost or benefit of implementing a particular control.