The legal and regulatory risk associated with business conducted over the Internet is driven by the laws and regulations of each individual country. Legal and regulatory risk is the risk of non-compliance or violation of the applicable laws and regulations that govern the business activities, operations, or transactions. Business conducted over the Internet involves the use of the global network of interconnected computers and devices to exchange information, goods, or services across the geographic boundaries. Business conducted over the Internet may expose the enterprise to various legal and regulatory risks, such as data protection, privacy, security, intellectual property, consumer protection, taxation, or jurisdiction issues. The legal and regulatory risk associated with business conducted over the Internet is driven by the laws and regulations of each individual country, as each country may have different or conflicting laws and regulations that apply to the business conducted over the Internet, and that may change or vary over time. The laws and regulations of each individual country may also impose different or additional obligations, requirements, or restrictions on the enterprise, and may subject the enterprise to different or multiple enforcement actions, penalties, or disputes.
The jurisdiction in which an organization has its principal headquarters, international law and a uniform set of regulations, and international standard-setting bodies are not the drivers of the legal and regulatory risk associated with business conducted over the Internet, as they do not reflect the diversity and complexity of the legal and regulatory landscape that the enterprise may face when conducting business over the Internet. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 217.

Explanation/Reference:
Explanation:
Strategic risks are those risks which have potential outcome of not fulfilling on strategic objectives of the organization as planned. Since the strategic objective will shape and impact the entire organization, the risk of not meeting that objective can impose a great threat on the organization.
Strategic risks can be broken down into external and internal risks:
External risks are those circumstances from outside the enterprise which will have a potentially

damaging or helpful impact on the enterprise. These risks include sudden change of economy, industry, or regulatory conditions. Some of the external risks are predictable while others are not. For instance, a recession may be predictable and the enterprise may be able to hedge against the dangers economically; but the total market failure may not as predictable and can be much more devastating.
Internal risks usually focus on the image or reputation of the enterprise. some of the risks that are

involved in this are public communication, trust, and strategic agreement from stakeholders and customers.

A three lines of defense structure is a model that defines the roles and responsibilities of different functions and levels within an organization for risk management and control. The first line of defense is the operational management, which is responsible for owning and managing the risks. The second line of defense is the risk management and compliance functions, which are responsible for overseeing and supporting the risk management processes. The third line of defense is the internal audit function, which is responsible for providing independent assurance on the effectiveness of the risk management and control systems. The greatest benefit of a three lines of defense structure is that it provides clear accountability for risk management processes, as it clarifies who is responsible for what, and how they interact and communicate with each other.
This can help to avoid duplication, confusion, or gaps in the risk management activities, and ensure that the risks are properly identified, assessed, treated, monitored, and reported. References = CRISC Review Manual,
7th Edition, page 107.

Section: Volume D