CAS-004 Governance, Risk, and Compliance Practice Question
An organization's risk register shows a critical risk with a very high annualized loss expectancy. Executive leadership decides the potential loss is unacceptable but concludes that no cost-effective control exists and that the activity generating the risk is essential to revenue. They formally document the decision, obtain board sign-off, and set a review date. Which risk treatment has leadership applied?
⚠ Common exam trap
It's easy for candidates to confuse documented acknowledgment of an unremediated risk with mitigation, when the absence of any applied control and the decision to continue the activity indicate formal acceptance.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Risk acceptance
Risk acceptance is the conscious decision to retain an identified risk when treatment is not cost-effective or feasible, and it is legitimized through documented rationale, executive or board approval, and scheduled re-evaluation. Leadership continued the essential activity, applied no control, transferred nothing, and formally signed off with a review date. That combination distinguishes acceptance from avoidance, transference, and mitigation.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Risk avoidance
Why it's wrong here
Avoidance means eliminating the risk by discontinuing the activity, process, or asset that creates it. Leadership explicitly concluded the activity is essential to revenue and chose to continue it, so the risk source remains in place. Because the organization did not exit the activity, this is not avoidance, even though the risk was deemed unacceptable and formally acknowledged.
- ✗
Risk transference
Why it's wrong here
Transference shifts the financial impact to a third party, typically through insurance or contractual indemnification. Nothing in the scenario indicates a policy, indemnity, or outsourcing arrangement was put in place to move the loss elsewhere. Documenting and accepting an unremediated risk while continuing the activity is the opposite of shifting it, so transference does not apply here.
- ✓
Risk acceptance
Why this is correct
Acceptance is the deliberate decision to retain a risk after evaluating treatment options, usually with formal documentation and senior sign-off. Leadership judged the loss unacceptable but found no cost-effective control, kept the essential activity running, recorded the rationale, obtained board approval, and set a review date. Those actions are the defining characteristics of a formally accepted risk rather than avoidance, transference, or mitigation.
- ✗
Risk mitigation
Why it's wrong here
Mitigation reduces the likelihood or impact of a risk by applying controls. Leadership determined that no cost-effective control exists, so they did not implement additional safeguards. Although they documented the decision and scheduled a review, no control was applied to lower the exposure, which means the treatment chosen is not mitigation.
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Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official CompTIA exam blueprint
This CAS-005 practice question is part of Courseiva's free CompTIA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CAS-005 exam.