Key risk indicators (KRIs) are metrics that provide an early warning of increasing risk exposure in various areas of the organization. They help to monitor changes in the level of risk and enable timely actions to mitigate the risk. The major advantage of using KRIs is that they identify when risk exceeds defined thresholds, which are the acceptable or tolerable levels of risk that the organization has established. By identifying when risk exceeds defined thresholds, the KRIs can alert the management and stakeholders of the need to take corrective or preventive measures, and avoid or reduce the potential losses or damages.
References = 3

* The level of risk in the IT risk profile is the aggregate measure of the likelihood and impact of IT-related risks that may affect the enterprise's objectives and operations.
* The risk appetite is the amount and type of risk that the enterprise is willing to accept in pursuit of its goals. It is usually expressed as a range or a threshold, and it is aligned with the enterprise's strategy and
* culture.
* If the level of risk in the IT risk profile has decreased and is now below management's risk appetite, it means that the enterprise has more capacity and opportunity to take on additional risks that may offer higher rewards or benefits.
* The best recommendation in this situation is to optimize the control environment, which is the set of policies, procedures, standards, and practices that provide the foundation for managing IT risks and controls. Optimizing the control environment means enhancing the efficiency and effectiveness of the controls, reducing the costs and complexity of compliance, and aligning the controls with the enterprise's objectives and values.
* Optimizing the control environment can help the enterprise to achieve the optimal balance between risk and return, and to leverage its risk management capabilities to create and protect value.
* The other options are not the best recommendations, because they do not address the opportunity to improve the enterprise's performance and resilience.
* Realigning risk appetite to the current risk level may result in missing out on potential gains or advantages that could be obtained by taking more risks within the acceptable range.
* Decreasing the number of related risk scenarios may reduce the scope and depth of risk analysis and reporting, and impair the enterprise's ability to identify and respond to emerging or changing risks.
* Reducing the risk management budget may compromise the quality and reliability of the risk management process and activities, and weaken the enterprise's risk culture and governance.
References =
* ISACA, CRISC Review Manual, 7th Edition, 2022, pp. 29-30, 34-35, 38-39, 44-45
* ISACA, CRISC Review Questions, Answers & Explanations Database, 2022, QID 145

Section: Volume C
Explanation:
This is categorized as a Business case to be made because the project cost is very large. The response to be implemented requires quite large investment. Therefore it comes under business case to be made.
Incorrect Answers:
A: It addresses costly risk response to a low risk. But here the response is less costly than that of business case to be made.
B: Quick win is very effective and efficient response that addresses medium to high risk. But in this the response does not require large investments.
D: This is not risk response prioritization option, instead it is a type of risk that happen with the several of the enterprise's business partners within a very short time frame.

The first course of action for a risk practitioner when discovering a deficiency in a critical system that cannot be patched is to conduct a risk assessment. A risk assessment is a process of identifying, analyzing, and evaluating the risks that could affect the achievement of the objectives of the system or the organization. A risk assessment helps to determine the level and nature of the risk exposure, and to prioritize and respond to the risks. Conducting a risk assessment is the first course of action, as it helps to understand the source, cause, and impact of the deficiency, and to estimate the likelihood and consequences of the risk events that could exploit the deficiency. Conducting a risk assessment also helps to identify and evaluate the existing or potential controls or mitigations that could address the deficiency, and to recommend the appropriate risk treatment options. Reporting the issue to internal audit, submitting a request to change management, and reviewing the business impact assessment are not the first courses of action, as they are either the outputs or the inputs of the risk assessment process, and they do not address the primary need of assessing the risk situation and status. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 49.