Which of the following is BEST described by the definition below? "They are heavy influencers of the likelihood and impact of risk scenarios and should be taken into account during every risk analysis, when likelihood and impact are assessed."
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A. B. C. D.B.
Risk factors are those features that influence the likelihood and/or business impact of risk scenarios.
They have heavy influences on probability and impact of risk scenarios.
They should be taken into account during every risk analysis, when likelihood and impact are assessed.
Incorrect Answers: A: The enterprise must consider risk that has not yet occurred and should develop scenarios around unlikely, obscure or non-historical events.
Such scenarios can be developed by considering two things: -> Visibility -> Recognition For the fulfillment of this task enterprise must: -> Be in a position that it can observe anything going wrong -> Have the capability to recognize an observed event as something wrong C: 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.
D: A risk event represents the situation where you have a risk that only occurs with a certain probability and where the risk itself is represented by a specified distribution.
The definition provided refers to factors that have a significant influence on the likelihood and impact of risk scenarios. These factors should be considered during every risk analysis when assessing the likelihood and impact of the risk.
Option A, "Obscure risk," does not fit the definition provided as it does not refer to any specific factors that influence the likelihood and impact of a risk scenario.
Option B, "Risk factors," is the correct answer. Risk factors are characteristics or circumstances that increase the likelihood and impact of a risk scenario. Risk factors can be internal or external to an organization and can include factors such as technology, human behavior, or natural disasters.
Option C, "Risk analysis," is a broader term that refers to the process of identifying, assessing, and evaluating risks. While risk analysis involves considering risk factors, it does not specifically refer to the heavy influencers of the likelihood and impact of risk scenarios.
Option D, "Risk event," refers to an occurrence that could have a negative impact on an organization's objectives. While risk events can be influenced by risk factors, the definition provided in the question does not specifically refer to risk events.
In summary, the best answer to the question is B, "Risk factors," as it directly relates to the definition provided and describes the factors that heavily influence the likelihood and impact of risk scenarios.