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CRISC Practice Question: A large bank has implemented a sophisticated risk…
A large bank has implemented a sophisticated risk and control monitoring system with multiple dashboards and automated reporting for key risk indicators (KRIs). However, the board of directors has been receiving conflicting KRI reports from different business units (e.g., retail banking, corporate lending, and wealth management). For example, the fraud KRI shows a high risk in retail but low risk in wealth management, yet both units use the same underlying data source. The chief risk officer (CRO) is concerned that the board is losing confidence in the risk reporting. An investigation reveals that each business unit defines and calculates KRIs differently, uses different thresholds, and reports on different schedules. What is the most likely root cause and the best remediation?
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
✓
The KRI definitions and calculation methods are not standardized across business units.
The root cause is that KRI definitions and calculation methods are not standardized across business units, leading to inconsistent reporting that confuses the board. Standardizing these definitions and methods ensures comparability. Option A (reporting frequency) is not the core issue; the problem is inconsistency, not frequency. Option B (data sources) is incorrect because the investigation found the same underlying data source is used. Option C (board misinterpretation) is a symptom, not the root cause. Option D correctly identifies the lack of standardization as the primary issue.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
The reporting frequency is inadequate; monthly reports should be weekly.
Why it's wrong here
Frequency does not resolve differences in KRI definitions.
- ✗
The data sources for KRIs are inconsistent across business units.
Why it's wrong here
The stem says they use the same underlying data source, so inconsistency is in definition, not source.
- ✗
The board members are misinterpreting the KRI reports due to lack of training.
Why it's wrong here
Conflicting reports cause confusion, but the root is the reports themselves are inconsistent.
- ✓
The KRI definitions and calculation methods are not standardized across business units.
Why this is correct
Standardizing definitions and calculation methods will produce consistent reports and restore board confidence.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This CRISC 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 CRISC exam.