Which of the following is true for risk management frameworks, standards and practices? Each correct answer represents a part of the solution.
Choose three.
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A. B. C. D.ACD.
Frameworks, standards and practices are necessary as: -> They provide a systematic view of "things to be considered" that could harm clients or an enterprise.
-> They act as a guide to focus efforts of variant teams.
-> They save time and revenue, such as training costs, operational costs and performance improvement costs.
-> They assist in achieving business objectives quickly and easily.
Risk management frameworks, standards, and practices are essential tools for any organization to manage their risks efficiently. They provide a systematic approach to identify, assess, and manage risks that could potentially harm clients or an enterprise. Below are the three true statements regarding risk management frameworks, standards, and practices:
A. They act as a guide to focus efforts of variant teams: A well-designed risk management framework, standard or practice can provide guidance to teams across the organization, including senior management, IT, compliance, legal, and operational teams. It helps in aligning different teams' efforts towards a common goal of managing risks effectively. For instance, the ISO 31000 standard on risk management provides a framework that can be used by any organization to develop a risk management program. The standard outlines the principles, framework, and process for managing risks that are adaptable to any organization's size, type, and complexity.
C. They provide a systematic view of "things to be considered" that could harm clients or an enterprise: Risk management frameworks, standards, and practices provide a structured approach to identify, assess, and manage risks. They provide a comprehensive list of risks that could potentially harm the organization and the clients. For example, the NIST Cybersecurity Framework provides a guideline to identify, protect, detect, respond and recover from cybersecurity risks. It provides a systematic view of different components of cybersecurity risks that should be considered, such as assets, threats, vulnerabilities, and impacts.
D. They assist in achieving business objectives quickly and easily: Effective risk management can contribute to achieving business objectives by mitigating risks that could hinder the organization's performance. Risk management frameworks, standards, and practices help organizations to manage risks effectively and efficiently, reducing the likelihood and impact of potential risks. By reducing the uncertainty and exposure to risks, organizations can focus more on achieving their business objectives.
B. They result in increase in cost of training, operation and performance improvement: This statement is incorrect. Implementing risk management frameworks, standards, and practices does not necessarily result in an increase in costs. Although implementing a risk management program may require some initial investment in terms of time and resources, the long-term benefits of managing risks effectively can outweigh the costs. Furthermore, most frameworks, standards, and practices are designed to be scalable and adaptable to different organizations, allowing them to implement a risk management program that fits their budget and resources.
In conclusion, risk management frameworks, standards, and practices play a crucial role in helping organizations manage their risks efficiently. They provide a structured approach to identify, assess, and manage risks and assist in achieving business objectives. They act as a guide to focus efforts of variant teams and provide a systematic view of "things to be considered" that could harm clients or an enterprise.