Which of the following is the BEST way to support communication of emerging risk?
Correct Answer: C
Emerging risk is a risk that is new or evolving, and has the potential to significantly affect the enterprise's objectives, performance, or reputation. Emerging risk can arise from changes in the internal or external environment, such as technological innovations, regulatory developments, or social trends. The best way to support communication of emerging risk is to include it on the next enterprise risk committee agenda. The enterprise risk committee is a group of senior executives who oversee the enterprise-wide risk management program, and provide guidance and direction to the risk owners and practitioners. By including the emerging risk on the agenda, the risk practitioner can ensure that the enterprise risk committee is aware of the risk, its causes, impacts, and likelihood, and can decide on the appropriate risk response strategy and actions. The other options are not the best way to support communication of emerging risk, as they involve different aspects of the risk management process:
* Update residual risk levels to reflect the expected risk impact means that the risk practitioner adjusts the risk levels after considering the existing or planned risk responses. This may not be feasible or accurate for emerging risk, as the risk responses may not be defined or implemented yet, or may not be effective for the new or evolving risk.
* Adjust inherent risk levels upward means that the risk practitioner increases the risk levels before considering any risk responses. This may not reflect the true nature or magnitude of the emerging risk, as the inherent risk levels are based on the assumptions and estimates of the risk practitioner, and may not account for the uncertainties or complexities of the emerging risk.
* Include it in the risk register for ongoing monitoring means that the risk practitioner records and tracks the emerging risk, its causes, impacts, likelihood, responses, and owners. This is an important step in the risk management process, but it does not necessarily support communication of the emerging risk, as the risk register may not be accessible or visible to all the relevant stakeholders, or may not be updated or reviewed frequently enough to capture the changes in the emerging risk. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 1, Section 1.2.2.2, pp. 21-22.
