Certified in Risk and Information Systems Control (CRISC) — Question 310

Mike is the project manager of the NNP Project for his organization. He is working with his project team to plan the risk responses for the NNP Project. Mike would like the project team to work together on establishing risk thresholds in the project. What is the purpose of establishing risk threshold?

Answer options

• A. It is a study of the organization's risk tolerance.
• B. It is a warning sign that a risk event is going to happen.
• C. It is a limit of the funds that can be assigned to risk events.
• D. It helps to identify those risks for which specific responses are needed.

Correct answer: D

Explanation

Establishing risk thresholds is crucial because it helps identify the risks that necessitate particular responses, ensuring that the project team can effectively manage potential issues. The other options, while related to risk management, do not directly address the primary benefit of thresholds in guiding response strategies.