CISM Information Security Risk Management Practice Question
After implementing controls, the residual risk is calculated to be at a level that slightly exceeds the risk appetite. The business owner argues that the cost of further mitigation outweighs the benefit. What is the most appropriate action for the risk manager?
⚠ Common exam trap
The trap is confusing the business owner's accountability with the authority to accept risk above appetite, leading candidates to pick 'accept as a business decision' instead of escalation.
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
✓
Document the risk and escalate to senior management for acceptance
When residual risk exceeds the risk appetite, the risk manager's role is to document the finding and escalate it to senior management, who own the decision to accept, mitigate, or transfer risk beyond appetite. The risk manager advises and facilitates; the business owner cannot unilaterally accept risk that breaches the organization's stated appetite. Escalation preserves governance and creates an auditable record.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Transfer the risk through insurance
Why it's wrong here
Insurance transfers financial consequence, not the underlying risk exposure, so residual risk remains above appetite and the compliance gap persists. Transfer suits low-frequency, high-severity losses where the organisation retains no capability to absorb them. Here the business owner is arguing cost-benefit, which points to a formal acceptance decision rather than paying a premium.
- ✗
Accept the residual risk as a business decision
Why it's wrong here
Acceptance requires authority at the level owning the risk, and residual risk exceeding the stated appetite cannot simply be absorbed by a business owner's cost argument. The risk manager must escalate for a documented exception or appetite revision. Acceptance is correct only where residual risk already sits within the approved appetite.
- ✓
Document the risk and escalate to senior management for acceptance
Why this is correct
Residual risk exceeding appetite cannot be accepted by the risk manager alone; documenting the business owner's cost-benefit rationale and escalating preserves accountability. This satisfies the stem's constraint that the owner argues further mitigation costs outweigh benefits, placing acceptance authority with senior management.
- ✗
Implement additional controls regardless of cost
Why it's wrong here
Mandating controls irrespective of cost ignores the cost-benefit principle underpinning risk treatment and could consume budget disproportionate to the exposure. Such spending is justified for regulatory mandates or safety-critical systems where non-compliance carries unacceptable penalty. Here the residual risk only slightly exceeds appetite, so a proportionate, documented response is required.
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official ISACA exam blueprint
This CISM practice question is part of Courseiva's free ISACA 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 CISM exam.