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Exam CRISC topic 1 question 6 discussion

Actual exam question from Isaca's CRISC
Question #: 6
Topic #: 1
[All CRISC Questions]

Which of the following is the MOST important use of KRIs?

  • A. Providing a backward-looking view on risk events that have occurred
  • B. Providing an early warning signal
  • C. Providing an indication of the enterprise's risk appetite and tolerance
  • D. Enabling the documentation and analysis of trends
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Suggested Answer: B 🗳️
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.
As KRIs are the indicators of risk, hence its most important function is to effectively give an early warning signal that a high risk is emerging to enable management to take proactive action before the risk actually becomes a loss.
Incorrect Answers:
A: This is one of the important functions of KRIs which can help management to improve but is not as important as giving early warning.
C: KRIs provide an indication of the enterprise's risk appetite and tolerance through metric setting, but this is not as important as giving early warning.
D: This is not as important as giving early warning.

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Chosen Answer:
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Chemngoremmercy
6 months, 2 weeks ago
B. Providing an early warning signal
upvoted 1 times
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ldl
1 year, 1 month ago
B is correct
upvoted 1 times
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