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CRISC Practice Question: Has implemented a new key risk indicator (KRI)…
An organization has implemented a new key risk indicator (KRI) for vendor management that measures the percentage of vendors without a signed contract. The current value is 15%, exceeding the risk appetite threshold of 10%. The risk owner wants to know the most appropriate action to take based on this KRI. What should the risk practitioner recommend?
⚠ Common exam trap
Many candidates confuse monitoring actions (like increasing reporting frequency) with risk response actions, or they mistakenly believe that adjusting the threshold to match the current value is a valid risk treatment instead of recognizing it as risk acceptance without proper analysis.
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
✓
Analyze the root cause of the high percentage and develop a remediation plan.
When a KRI exceeds the risk appetite threshold, the immediate priority is to understand why the breach occurred and to implement corrective actions. Analyzing the root cause and developing a remediation plan directly addresses the underlying issue—vendors without signed contracts—rather than merely monitoring or adjusting thresholds. This aligns with the CRISC principle that KRIs are leading indicators that should trigger risk response, not just reporting changes.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Increase the frequency of KRI reporting from monthly to weekly to monitor the trend.
Why it's wrong here
Weekly reporting changes observation frequency, not the 15% exposure exceeding appetite; the KRI already signals a breach requiring treatment. Tempting because tighter monitoring suits volatile indicators, but it would be correct when a KRI is within tolerance yet trending toward the threshold.
- ✗
Update the risk appetite threshold to 15% to align with the current value.
Why it's wrong here
Raising the threshold to match the observed value removes the breach signal without treating the underlying unsigned-contract exposure. Tempting because thresholds are periodically reviewed, but recalibration is correct only after remediation or when evidence shows the original appetite was misstated.
- ✗
Immediately communicate the KRI breach to the board of directors.
Why it's wrong here
Board escalation bypasses the risk owner's treatment process and the organisation's defined escalation path for a single threshold breach. Tempting because governance bodies oversee risk appetite, but direct board communication is correct for material or critical breaches exceeding defined escalation criteria.
- ✓
Analyze the root cause of the high percentage and develop a remediation plan.
Why this is correct
A KRI exceeding the 10% appetite threshold signals the control gap needs investigation, not immediate escalation or acceptance. Root cause analysis identifies why vendors lack signed contracts, enabling a targeted remediation plan that brings the metric back within tolerance.
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JA
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.