Explore the factors that influence risk tolerance in the context of information security. Learn how increased penalties for unauthorized data disclosure can impact an organization’s risk tolerance level.
Table of Contents
Question
Which of the following would MOST likely cause senior management to lower the risk tolerance level?
A. Organizational restructuring
B. Increase in penalties for unauthorized data disclosure
C. Outsourcing of in-house software development
D. Decrease in budget allocated for risk mitigation activities
Answer
B. Increase in penalties for unauthorized data disclosure
Explanation
The option that would most likely cause senior management to lower the risk tolerance level is B. Increase in penalties for unauthorized data disclosure.
Risk tolerance is the degree of variability in investment returns that an individual or organization is willing to withstand. It is an important component in investing. You should have a realistic understanding of your ability and willingness to stomach large swings in the value of your investments; if you take on too much risk, you might panic and sell at the wrong time.
Option B suggests an increase in penalties for unauthorized data disclosure. This means that the potential financial and reputational costs of a data breach have increased. Senior management may respond by lowering the organization’s risk tolerance level to avoid these increased penalties. They might implement stricter data security protocols, invest in better security infrastructure, or conduct more frequent risk assessments.
On the other hand, options A, C, and D are less likely to cause a decrease in risk tolerance. Organizational restructuring (Option A) or outsourcing of in-house software development (Option C) could potentially lead to changes in risk, but not necessarily a decrease in risk tolerance. A decrease in the budget allocated for risk mitigation activities (Option D) could potentially increase risk, but again, it does not directly lead to a decrease in risk tolerance.
ISACA CRISC certification exam practice question and answer (Q&A) dump with detail explanation and reference available free, helpful to pass the ISACA CRISC exam and earn ISACA CRISC certification.