CRISC Risk and Control Monitoring and Reporting Practice Question
This CRISC practice question tests your understanding of risk and control monitoring and reporting. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A medium-sized e-commerce company has a risk monitoring program that tracks key risk indicators (KRIs) monthly. One KRI is the percentage of orders with failed payment transactions. The threshold is 2%, but for the past three months, the KRI has been 2.5%, 3.1%, and 2.8%. The risk owner says this is due to a seasonal increase in fraudulent transactions and expects it to return to normal next month. The company has a compensating control that manually reviews flagged transactions. The internal audit team recently tested the compensating control and found it to be 100% effective. The risk committee wants to know if the KRI breach requires action. What should the risk practitioner recommend?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Acknowledge the breach but note that the compensating control is effective, so no immediate action is required; continue to monitor.
Option C is correct because the compensating control (manual review of flagged transactions) has been tested as 100% effective, meaning the residual risk is within acceptable tolerance despite the KRI breach. The risk owner attributes the breach to a seasonal spike, and the risk monitoring program should continue to track the KRI monthly to confirm a return to normal. Immediate action is not warranted when the compensating control fully mitigates the risk, and the risk committee should be informed that the control is effective.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Immediately implement additional automated controls to reduce the KRI.
Why it's wrong here
Not needed if compensating control is effective.
✗
Escalate the issue to the board and recommend a risk acceptance.
Why it's wrong here
Unnecessary given effective compensating control.
✓
Acknowledge the breach but note that the compensating control is effective, so no immediate action is required; continue to monitor.
Why this is correct
Appropriate response given the circumstances.
Related concept
Read the scenario before looking for a memorised answer.
✗
Lower the KRI threshold to 3% to accommodate seasonal variations.
Why it's wrong here
Changing threshold without analysis is not best practice.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates assume any KRI breach automatically requires immediate remediation or escalation, ignoring the critical role of compensating controls in reducing residual risk to an acceptable level.
Detailed technical explanation
How to think about this question
Key risk indicators (KRIs) are leading metrics that signal potential risk events, but they must be interpreted in context of compensating controls. In this scenario, the compensating control (manual review) operates as a detective control that catches fraudulent transactions after the KRI breach, effectively reducing the likelihood of financial loss. The 100% effectiveness test means the control's detection rate is perfect, so the residual risk is negligible—this is a classic example of how KRIs measure inherent risk, while control effectiveness determines residual risk. Real-world e-commerce platforms often use a combination of automated fraud scoring and manual review queues to balance false positives and true fraud detection.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A practitioner preparing for the CRISC exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Risk and Control Monitoring and Reporting — This question tests Risk and Control Monitoring and Reporting — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Acknowledge the breach but note that the compensating control is effective, so no immediate action is required; continue to monitor. — Option C is correct because the compensating control (manual review of flagged transactions) has been tested as 100% effective, meaning the residual risk is within acceptable tolerance despite the KRI breach. The risk owner attributes the breach to a seasonal spike, and the risk monitoring program should continue to track the KRI monthly to confirm a return to normal. Immediate action is not warranted when the compensating control fully mitigates the risk, and the risk committee should be informed that the control is effective.
What should I do if I get this CRISC question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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