Discuss Isaca CRISC Exam Topic 1 Question 105

Which of the following should be an element of the risk appetite of an organization?

AThe effectiveness of compensating controls

BThe enterprise's capacity to absorb loss

CThe residual risk affected by preventive controls

DThe amount of inherent risk considered appropriate

Suggested Answer: B

Risk appetite is the amount and type of risk that an organization is willing to accept in pursuit of its objectives. One of the elements of risk appetite is the enterprise's capacity to absorb loss, which is the maximum amount of loss that an organization can withstand without jeopardizing its existence or strategic objectives. The effectiveness of compensating controls, the residual risk affected by preventive controls, and the amount of inherent risk considered appropriate are not elements of risk appetite, but rather factors that influence the risk assessment and responseprocesses.Reference= [CRISC Review Manual (Digital Version)], page 41;CRISC Review Questions, Answers & Explanations Database, question 196.

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31 comments · newest first

Nana 6 months ago

A and C together give a full picture of our risk management.

Ling 6 months ago

B is definitely my pick. If we can't absorb losses, we're in trouble.

Janna 6 months ago

D makes sense. Inherent risk levels guide our decisions.

Madonna 6 months ago

A is important too. Compensating controls show how well we manage risks.

Robt 6 months ago

Totally agree with B, it's all about how much you can handle!

Mira 7 months ago

Wait, is D really appropriate? Sounds a bit subjective to me.

Lanie 7 months ago

C seems a bit off, preventive controls don't always show the full picture.

Derick 7 months ago

Definitely B, capacity to absorb loss is key.

Santos 8 months ago

B for sure. You gotta know how much risk your organization can handle before setting your appetite.

Leila 8 months ago

Haha, I bet the exam writers are having a field day coming up with these tricky risk management questions!

Christa 8 months ago

C. The residual risk affected by preventive controls is crucial for understanding the organization's risk profile.

Nancey 8 months ago

Hmm, I'm torn between B and D. Both seem like important factors in determining risk appetite.

My 8 months ago

D. The amount of inherent risk considered appropriate seems like the most relevant option here.

Sharan 8 months ago

I feel like residual risk and preventive controls were emphasized in our last class, but I can't recall if that connects to risk appetite directly.

Hollis 9 months ago

I practiced a similar question where we discussed inherent risk, so I wonder if option D is relevant here too.

Ludivina 9 months ago

I'm not entirely sure, but I remember something about compensating controls being important. Could that be option A?

Antonio 9 months ago

I think the risk appetite should relate more to the enterprise's capacity to absorb loss, so I would lean towards option B.

Gilma 9 months ago

D makes the most sense to me. The risk appetite is about the organization's willingness to accept risk, not the effectiveness of controls or residual risk.

Shannan 9 months ago

I'm a bit confused on the differences between some of these options. I'll have to think it through carefully before selecting an answer.

Marylyn 9 months ago

This seems straightforward. The risk appetite should be the amount of inherent risk the organization deems appropriate, so I'm going with D.

Junita 10 months ago

I think B is key. Capacity to absorb loss is crucial.

Joanna 10 months ago

I think the correct answer is B. The enterprise's capacity to absorb loss is a key element of risk appetite.

King 10 months ago

I lean towards C. Understanding residual risk helps in planning.

Lorita 10 months ago

I think A is super important too, can't overlook those controls.

Edison 11 months ago

Okay, I know risk appetite is about the level of risk an organization is willing to accept. I'm leaning towards D, but I want to double-check the definitions of the other options.

Alline 11 months ago

Hmm, I think the key here is understanding the concept of risk appetite. I'll need to review my notes on that before deciding.

Donte 5 months ago

↳ replying to Alline

A and C also matter, though. Balancing is key!

Tandra 5 months ago

↳ replying to Alline

True, without capacity, we can't take risks.

Glory 5 months ago

↳ replying to Alline

I think B is the most important.

Donte 6 months ago

↳ replying to Alline

Definitely! It shapes decision-making.

Tandra 10 months ago

↳ replying to Alline

I agree, risk appetite is crucial.

Isaca CRISC Exam - Topic 1 Question 105 Discussion