Which of the following is NOT true for Key Risk Indicators?
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A. B. C. D.D.
They are monitored on regular basis as they indicate high probability and high impact risks.
As risks change over time, hence KRIs should also be monitored regularly for its effectiveness on these changing risks.
Incorrect Answers: A, B, C: These all are true for KRIs.
Key Risk Indicators are the prime monitoring indicators of the enterprise.
KRIs are highly relevant and possess a high probability of predicting or indicating important risk.
KRIs help in avoiding excessively large number of risk indicators to manage and report that a large enterprise may have.
The complete set of KRIs should also balance indicators for risk, root causes and business impact, so as to indicate the risk and its impact completely.
Key Risk Indicators (KRIs) are metrics that are used to monitor and measure the level of risk that an organization is exposed to. KRIs are typically chosen by an organization's management to provide a snapshot of the level of risk that the organization is facing, and to help identify potential areas of risk that may require further attention.
Based on the options provided, option D is the answer to the question. KRIs are not monitored annually, as this would not provide real-time or timely insights into the level of risk that an organization is facing.
Option A is true; KRIs are often selected as the prime monitoring indicators for the enterprise, as they are considered to be the most important metrics for assessing risk.
Option B is also true; KRIs are designed to help organizations avoid having to manage and report on an excessively large number of risk indicators. By focusing on a small set of key metrics, organizations can gain a better understanding of their overall risk exposure.
Option C is also true; the complete set of KRIs should be balanced to ensure that there is a mix of indicators for risk, root causes, and business impact. This helps to provide a more comprehensive view of the risks facing an organization.
In summary, KRIs are important metrics for assessing and monitoring an organization's level of risk. They are typically chosen by management as the prime monitoring indicators for the enterprise, and they help organizations avoid having to manage an excessively large number of risk indicators. The complete set of KRIs should be balanced to include indicators for risk, root causes, and business impact, but they are not monitored annually.