CRISC IT Risk Identification Practice Question
An organization has a risk appetite statement that says 'We accept up to $5 million in operational losses per year.' However, a new cloud migration project is estimated to have a potential operational loss of $8 million if a critical failure occurs. The risk capacity of the organization is $20 million. What should the risk practitioner recommend?
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Implement risk treatment measures to reduce the potential loss to below $5 million
The risk tolerance threshold ($5 million) is exceeded by the potential loss ($8 million). The risk appetite is the amount of risk the organization is willing to accept, and this scenario exceeds it. While the risk capacity is higher, the appetite is not met, so risk treatment is needed to bring the residual risk within the tolerance.
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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.