The best approach to identify relevant risk scenarios is to engage line management in risk assessment workshops. Risk scenarios are hypothetical situations that describe how a risk event could occur and what the consequences could be1. Identifying risk scenarios can help to understand and communicate the nature and impact of the risks, and to design and evaluate the risk responses2. To identify relevant risk scenarios, it is important to involve the people who are responsible for or affected by the risks, such as the line managers. Line managers are the managers who oversee the operational activities and processes of the organization, and whoreport to the senior or executive management3. By engaging line managers in risk assessment workshops, the organization can:
Leverage the line managers’ knowledge and experience of the operational environment, the business objectives, the stakeholder expectations, and the potential threats and opportunities4.
Encourage the line managers’ participation and collaboration in the risk identification and analysis process, and foster a risk-aware culture and mindset5.
Enhance the line managers’ ownership and accountability of the risks and the risk responses, and ensure their alignment and commitment to the risk management strategy and objectives6.
The other options are not the best approaches to identify relevant risk scenarios, because:
Escalating the situation to risk leadership is not an effective or efficient way to identify risk scenarios, as it may bypass or undermine the line managers’ role and responsibility in the risk management process. Risk leadership is the function or role that provides the vision, direction, andguidance for the risk management activities and initiatives of the organization7. Escalating the situation to risk leadership may imply that the line managers are not capable or willing to identify and manage the risks, or that the risk leadership is not aware or involved in the riskmanagement process. This may create confusion, conflict, or distrust among the risk management stakeholders, and reduce the quality and credibility of the risk scenarios.
Engaging internal audit for risk assessment workshops is not a suitable or appropriate way to identify risk scenarios, as it may violate the independence and objectivity of the internal audit function. Internal audit is an independent and objective assurance and consulting activity that evaluates and improves the effectiveness of the organization’s governance, risk management, and control processes8. Engaging internal audit for risk assessment workshops may compromise the internal audit’s role and mandate, as it may create a conflict of interest or a self-review threat. Internal auditshould not be involved in the risk identification and analysis process, but rather provide assurance or advice on the adequacy and reliability of the process.
Reviewing system and process documentation is not a sufficient or comprehensive way to identify risk scenarios, as it may overlook or miss some important or emerging risks. System and process documentation are the records or artifacts that describe the structure, functions, features, and requirements of the organization’s systems and processes. Reviewing system and process documentation can help to identify some risks that are related to the design, implementation, or operation of the systems and processes, but it cannot capture all the risks that may affect the organization. Some risks may arise from external or internal factors that are not reflected or updated in the system and process documentation, such as changes in the market, technology, regulation, or stakeholder expectations.
References =
Risk Scenarios Toolkit - ISACA
Risk Scenarios Starter Pack - ISACA
Line Manager - CIO Wiki
Engaging Line Managers in Risk Management - IRM
Risk Culture - CIO Wiki
Risk Ownership - CIO Wiki
Risk Leadership - CIO Wiki
Internal Audit - CIO Wiki
[System Documentation - CIO Wiki]
