A business case will BEST communicate the importance of risk mitigation initiatives to senior management, because it provides a clear and concise justification of the objectives, benefits, costs, and risks of the proposed initiatives. A business case helps to align the risk mitigation initiatives with the enterprise's strategy and goals, and to obtain the necessary approval and support from senior management. The other options are not as effective as a business case, because:
* Option B: A balanced scorecard is a tool to measure and monitor the performance of the enterprise across four perspectives: financial, customer, internal process, and learning and growth. It does not
* communicate the importance of risk mitigation initiatives, but rather the outcomes and impacts of them.
* Option C: Industry standards are benchmarks or best practices that define the minimum requirements or expectations for a certain domain or activity. They do not communicate the importance of risk mitigation initiatives, but rather the compliance or alignment of them with the external environment.
* Option D: A heat map is a tool to visualize and prioritize the risks based on their likelihood and impact.
It does not communicate the importance of risk mitigation initiatives, but rather the severity and distribution of the risks. References = Risk and Information Systems Control Study Manual, 7th Edition, ISACA, 2020, p. 118.

Explanation/Reference:
Explanation:
Internal controls are the actions taken by the organization to help to assure management that the organization's objectives are protected from the occurrence of risk events. Internal control objectives are applicable to all manual or automated areas. Internal control objectives include:
Internal accounting controls- They control accounting operations, including safeguarding assets and

financial records.
Operational controls- They focus on day-to-day operations, functions, and activities. They ensure that

all the organization's objectives are being accomplished.
Administrative controls- They focus on operational efficiency in a functional area and stick to

management policies.
Incorrect Answers:
B: Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources. It is done to minimize, monitor, and control the probability and impact of unfortunate events or to maximize the realization of opportunities.
C: Hedging is the process of managing the risk of price changes in physical material by offsetting that risk in the futures market. In other words, it is the avoidance of risk. So, it only avoids risk but can not assure protection against risk.
D: Risk assessment is a process of analyzing the identified risk, both quantitatively and qualitatively.
Quantitative risk assessment requires calculations of two components of risk, the magnitude of the potential loss, and the probability that the loss will occur. While qualitatively risk assessment checks the severity of risk. The assessment attempts to determine the likelihood of the risk being realized and the impact of the risk on the operation. This provides several conclusions:
Probability-establishing the likelihood of occurrence and reoccurrence of specific risks, independently

and combined.
Interdependencies-the relationship between different types of risk. For instance, one risk may have

greater potential of occurring if another risk has occurred. Or probability or impact of a situation may increase with combined risk.

IT risk owners are the most appropriate people to review the completed list of potential key risk indicators (KRIs) and select the ones that should be implemented. IT risk owners are the individuals who have the authority and accountability to manage the IT risks within their scope of responsibility. They are also responsible for defining the risk appetite, tolerance, and thresholds for their IT operations, and for ensuring that the KRIs are aligned with the business objectives and risk management strategy. IT security managers, IT control owners, and IT auditors are also involved in the risk management process, but they do not have the same level of authority and accountability as IT risk owners, and they may have different perspectives and priorities on the selection of KRIs. References = Risk and Information Systems Control Study Manual, Chapter 1, Section 1.3.1, page 1-13.

Explanation/Reference:
Explanation:
As quantitative analysis is data driven, it:
Allows data classification and counting.

Allows statistical models to be constructed, which help in explaining what is being observed.

Generalizes findings for a larger population and direct comparisons between two different sets of data

or observations.
Produces statistically reliable results.

Allows discovery of phenomena which are likely to be genuine and merely occurs by chance.

Incorrect Answers:
A: Risk factors are expressed in terms of high/medium/low in qualitative analysis, and not in quantitative analysis.