The most effective approach to prioritize risk scenarios is by assessing the impact to the strategic plan, because this will help to align the risk management process with the organization’s vision, mission, and goals. The strategic plan is the document that defines the organization’s direction, priorities, and objectives, and guides the allocation of resources and efforts. By assessing theimpact to the strategic plan, the organization can determine which risk scenarios pose the greatest threat or opportunity to the achievement of the strategic objectives, and prioritize them accordingly. The other options are not as effective as assessing the impact to the strategic plan, because they do not directly relate to the organization’s specific context, needs, and expectations, as explained below:
B. Aligning with industry best practices is an approach that involves following the standards, norms, and expectations for risk management that are established and followed by the peers or competitors in the same industry or sector. Aligning with industry best practices can help to benchmark and compare the organization’s risk management performance and maturity, and identify areas for improvement or innovation. However, this approach is not as effective as assessing the impact to the strategic plan, because it does not account for the organization’s unique and customized risk scenarios, which may differ from the industry average or standard.
C. Soliciting input from risk management experts is an approach that involves seeking advice, guidance, or feedback from the professionals or specialists who have the knowledge, experience, or skills in risk management. Soliciting input from risk management experts can help to enhance the quality and validity of the risk analysis and evaluation, and provide insights and recommendations for risk mitigation. However, this approach is not as effective as assessing the impact to the strategic plan, because it does not reflect the organization’s risk appetite, preferences, and expectations, which may differ from the risk management experts’ opinions or perspectives.
D. Evaluating the cost of risk response is an approach that involves estimating the resources and efforts required to implement the risk response strategies, such as avoiding, reducing, transferring, or accepting the risk. Evaluating the cost of risk response can help to optimize the risk management efficiency and effectiveness, and balance the potential benefits and costs of taking risks. However, this approach is not as effective as assessing the impact to the strategic plan, because it does not consider the potential consequences and outcomes of the risk scenarios, which may affect the organization’s performance and reputation. References = Risk and Information Systems Control Study Manual, Chapter 2, Section 2.3.1, page 45. The Ultimate Guide to Risk Prioritization - Hyperproof, Risk Prioritization: What Is It? [2021 Guide & Matrix] - ERM Software, What is Risk Prioritization | Centraleyes, Scenario Planning in Risk Management: Why It is Needed - SmartCompliance
