IT Risk Fundamentals Exam Questions and Answers

QUESTION: 6

Which of the following is MOST likely to promote ethical and open communication of risk management activities at the executive level?

Recommending risk tolerance levels to the business
Expressing risk results in financial terms
Increasing the frequency of risk status reports

Answer(s): B

Explanation:

Expressing risk results in financial terms is most likely to promote ethical and open communication of risk management activities at the executive level. This is because financial metrics are universally understood and can clearly illustrate the impact of risks on the organization. By translating risk into financial terms, executives can more easily comprehend the severity and potential consequences of various risks, facilitating informed decision-making and fostering transparency. It also allows for a common language between different departments and stakeholders, enhancing clarity and reducing misunderstandings. This practice is emphasized in frameworks like ISO 31000 and is a key aspect of effective risk communication.

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QUESTION: 7

Which of the following MUST be established in order to manage l&T-related risk throughout the enterprise?

An enterprise risk governance committee
The enterprise risk universe
Industry best practices for risk management

Answer(s): A

Explanation:

To manage IT-related risk throughout the enterprise, it is crucial to establish an enterprise risk governance committee. This committee provides oversight and direction for the risk management activities across the organization. It ensures that risks are identified, assessed, and managed in alignment with the organization's risk appetite and strategy. The committee typically includes senior executives and stakeholders who can influence policy and resource allocation. This structure supports a comprehensive approach to risk management, integrating risk considerations into decision-making processes. This requirement is in line with guidance from frameworks such as COBIT and ISO 27001, which emphasize governance structures for effective risk management.

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QUESTION: 8

To establish an enterprise risk appetite, an organization should:

normalize risk taxonomy across the organization.
aggregate risk statements for all lines of business.
establish risk tolerance for each business unit.

Answer(s): C

Explanation:

To establish an enterprise risk appetite, it is essential for an organization to establish risk tolerance for each business unit. Risk tolerance defines the specific level of risk that each business unit is willing to accept in pursuit of its objectives. This approach ensures that risk management is tailored to the unique context and operational realities of different parts of the organization, enabling a more precise and effective risk management strategy. Normalizing risk taxonomy and aggregating risk statements are important steps in the broader risk management process but establishing risk tolerance is fundamental for defining risk appetite at the unit level. This concept is supported by standards such as ISO 31000 and frameworks like COSO ERM (Enterprise Risk Management).

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QUESTION: 9

Which of the following is the BEST reason for an enterprise to avoid an absolute prohibition on risk?

It may not be understood by executive management.
It may lead to ineffective use of resources.
It may not provide adequate support for budget increases.

Answer(s): B

Explanation:

An absolute prohibition on risk means that an enterprise avoids any and all forms of risk, regardless of potential benefits. This approach can lead to the following issues:
Inefficiency in Resource Allocation: Absolute risk avoidance can cause an enterprise to allocate resources ineffectively. For example, by avoiding all risks, the enterprise may miss out on opportunities that could bring substantial benefits. Resources that could be invested in innovation or improvement are instead tied up in mitigating even the smallest of risks. Stifling Innovation and Growth: Enterprises that are overly risk-averse may hinder innovation and growth. Taking calculated risks is essential for driving new initiatives, products, or services. Without accepting some level of risk, companies might lag behind competitors who are willing to innovate and take strategic risks.
Poor Risk Management Practices: By trying to avoid all risks, enterprises might develop a risk management strategy that is more about avoidance than mitigation and management. Effective risk management involves identifying, assessing, and mitigating risks, not completely avoiding them. This ensures that the company is prepared for potential challenges and can manage them proactively.

Reference:

ISA 315 Anlage 5 and Anlage 6 discuss the importance of understanding and managing risks associated with IT environments. They highlight the need for a balanced approach to risk management that includes both manual and automated controls to handle various risk levels (e.g., operational, compliance, strategic).
SAP Reports and Handbooks highlight the necessity of balancing risk with operational efficiency to maintain effective resource allocation and drive business objectives forward.

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QUESTION: 10

What is the purpose of a control objective?

To describe the result of protecting an asset for a business process
To describe the risk of loss to an asset
To describe the responsibility of stakeholders to protect assets

Answer(s): A

Explanation:

A control objective is a specific target or goal that a control activity aims to achieve. The primary purpose of a control objective is to ensure that the business processes are conducted in a way that meets the organization's requirements for security, accuracy, and efficiency. Specifically, control objectives:
Define Desired Outcomes: They describe the expected result of implementing a control, such as protecting an asset, ensuring data integrity, or complying with regulations. For example, a control objective might be to ensure that financial transactions are accurately recorded and reported. Guide Control Activities: Control objectives help in designing and implementing control activities. These activities are then measured against the control objectives to ensure they are effective in achieving the desired outcome.
Support Risk Management: Control objectives are integral to risk management frameworks as they help in identifying what needs to be controlled to mitigate risks effectively. They provide a benchmark against which the performance of controls can be measured.

Reference:

ISA 315 Anlage 5 and Anlage 6 detail the importance of understanding and defining control objectives within the context of IT controls to ensure they adequately address the risks and support business processes effectively.
SAP Financial Modules and Reports include various control objectives aimed at protecting assets, ensuring accurate financial reporting, and complying with regulatory requirements.

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ISACA IT Risk Fundamentals Exam (page: 2) ISACA IT Risk Fundamentals Updated on: 25-Dec-2025

QUESTION: 6

Explanation:

QUESTION: 7

Explanation:

QUESTION: 8

Explanation:

QUESTION: 9

Explanation:

Reference:

QUESTION: 10

Explanation:

Reference:

ISACA IT Risk Fundamentals Exam (page: 2)
ISACA IT Risk Fundamentals
Updated on: 25-Dec-2025