CRISC Risk Response and Reporting Practice Question
In the context of ERM integration, IT risk is typically considered a subset of which broader risk category?
⚠ Common exam trap
Many candidates confuse IT risk with compliance risk (Option C) because many IT failures have regulatory implications (e.g., GDPR breaches), but IT risk is fundamentally about operational continuity, not just legal adherence.
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
✓
Operational risk
In Enterprise Risk Management (ERM) integration, IT risk is typically categorized as a subset of operational risk because it directly impacts the availability, integrity, and confidentiality of information systems and data, which are core operational assets. Operational risk encompasses failures in internal processes, people, and systems, and IT risk—such as system outages, data breaches, or software defects—falls squarely within this domain. This alignment is reinforced by frameworks like COSO and ISO 31000, which treat technology-related failures as operational risk events.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
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Strategic risk
Why it's wrong here
IT risk sits under operational risk in ERM taxonomies, since it stems from failed internal processes, systems and people. Strategic risk is tempting because technology underpins business direction, but strategic risk concerns misaligned objectives, poor market positioning or failed major initiatives, not day-to-day system and process failures.
- ✗
Financial risk
Why it's wrong here
IT risk maps to operational risk, not financial risk, because it arises from failed processes, systems and people rather than market, credit or liquidity exposures. Financial risk is tempting since breaches carry monetary loss, but that loss is a downstream consequence; financial risk covers treasury, credit and market exposures in ERM taxonomies.
- ✗
Compliance risk
Why it's wrong here
Compliance risk concerns adherence to laws, regulations and standards, and sits alongside IT risk rather than containing it. It tempts because IT and compliance risks frequently overlap in reporting, yet ERM classifies IT risk under operational risk, which covers technology failures and process disruptions.
- ✓
Operational risk
Why this is correct
IT risk arises from failures in technology, people and processes supporting service delivery, which is precisely the scope of operational risk. It is therefore treated as a subset of operational risk within ERM, not of strategic, financial or compliance risk categories.
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