What will guide the selection of controls that effectively address risks?

What will guide the selection of controls that effectively address risks?

• A. A defined risk appetite
• B. A comprehensive incident report
• C. A thorough cost-benefit analysis
• D. Regular monitoring of risks

Answer: (C)

The selection of controls that effectively address risks is significantly guided by a thorough cost-benefit analysis. This process involves evaluating potential controls not only in terms of their effectiveness at mitigating identified risks but also considering the financial implications of implementing those controls. A cost-benefit analysis helps organizations make informed decisions by comparing the potential benefits of a control against its costs, ensuring that resources are allocated efficiently and that the chosen controls provide a favorable return on investment (ROI). When conducting a cost-benefit analysis, organizations assess factors such as the likelihood of risk occurrence, the potential impact of those risks, and the costs associated with implementing and maintaining controls. This detailed evaluation can help ensure that the chosen controls adequately address the risks without overspending or under-investing in risk management measures. While a defined risk appetite, comprehensive incident reports, and regular monitoring of risks are valuable components of a risk management strategy, they function more as contextual elements that support the broader decision-making process rather than directly guiding the selection of controls. A defined risk appetite outlines the level of risk the organization is willing to accept, but it does not provide specific guidance on which controls to implement. Comprehensive incident reports provide historical context but lack real-time application in control selection. Regular monitoring of risks ensures that the organization

The selection of controls that effectively address risks is significantly guided by a thorough cost-benefit analysis. This process involves evaluating potential controls not only in terms of their effectiveness at mitigating identified risks but also considering the financial implications of implementing those controls. A cost-benefit analysis helps organizations make informed decisions by comparing the potential benefits of a control against its costs, ensuring that resources are allocated efficiently and that the chosen controls provide a favorable return on investment (ROI).

When conducting a cost-benefit analysis, organizations assess factors such as the likelihood of risk occurrence, the potential impact of those risks, and the costs associated with implementing and maintaining controls. This detailed evaluation can help ensure that the chosen controls adequately address the risks without overspending or under-investing in risk management measures.

While a defined risk appetite, comprehensive incident reports, and regular monitoring of risks are valuable components of a risk management strategy, they function more as contextual elements that support the broader decision-making process rather than directly guiding the selection of controls. A defined risk appetite outlines the level of risk the organization is willing to accept, but it does not provide specific guidance on which controls to implement. Comprehensive incident reports provide historical context but lack real-time application in control selection. Regular monitoring of risks ensures that the organization