ISACA CRISC: Which of the following is MOST important when developing KPIs?

Question

Which of the following is MOST important when developing key performance indicators (KPIs)?

A. Alignment to management reports
B. Alignment to risk responses
C. Alerts when risk thresholds are reached
D. Identification of trends

Answer

B. Alignment to risk responses

Explanation

The correct answer is B: Alignment to risk responses.

KPIs are used to measure the effectiveness of risk responses. By aligning KPIs to risk responses, organizations can ensure that they are monitoring the right things and that their risk management efforts are effective.

For example, if an organization has a risk response to increase the frequency of security audits, then a KPI could be the number of security audits completed per month. This KPI would allow the organization to track whether or not they are meeting their risk response goal.

Other benefits of aligning KPIs to risk responses include:

• Improved risk management decision-making: By tracking the effectiveness of risk responses, organizations can make better decisions about how to allocate resources and prioritize risk mitigation efforts.
• Increased accountability: By linking KPIs to specific risk responses, organizations can hold individuals and teams accountable for meeting their risk management goals.
• Improved communication: By tracking KPIs, organizations can communicate the effectiveness of their risk management efforts to stakeholders.

The other options are also important considerations when developing KPIs, but they are not as important as alignment to risk responses.

• Alignment to management reports: KPIs should be aligned to management reports so that they can be easily communicated to stakeholders. However, alignment to management reports is not as important as alignment to risk responses.
• Alerts when risk thresholds are reached: KPIs should be designed to alert organizations when risk thresholds are reached. However, alerts are not as important as alignment to risk responses.
• Identification of trends: KPIs should be designed to identify trends in risk. However, identification of trends is not as important as alignment to risk responses.

Reference

• Key Performance Indicators (KPIs): Definition and Examples | Indeed.com
• 10 Indispensable KPIs for Software Development | Trio Developers
• What is a Key Performance Indicator (KPI)? – KPI.org
• HOW TO DEVELOP KPIS / PERFORMANCE MEASURES – KPI.org
• 27 KPI Examples: A Guide to Great Key Performance Indicators (onstrategyhq.com)
• Integrating KRIs and KPIs for Effective Technology Risk Management (isaca.org)
• CRISC Certification | Certified in Risk and Information Systems Control | ISACA
• Performance Measurement Metrics for IT Governance (isaca.org)
• What Is A KPI? Definition & Examples – Forbes Advisor
• What Are Your KPIs Really Measuring? (hbr.org)
• Key Performance Indicator (KPI): Definition, Types, and Examples (investopedia.com)
• What is a Key Performance Indicator (KPI)? Guide & Examples (qlik.com)
• 30 KPIs To Measure Performance (& How To Choose & Track Them) | ClearPoint Strategy

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