Risk strategies are the plans and actions that an organization adopts to manage its risks and to achieve its objectives. Risk strategies should be aligned with the organization's vision, mission, values, and culture, as well as its internal and external environment. The most important consideration when developing risk strategies is the long-term organizational goals, meaning that the risk strategies should support and enable the organization to pursue and attain its desired future state and outcomes. The long-term organizational goals should guide the risk identification, assessment, response, and monitoring processes, as well as the risk appetite and tolerance levels. The long-term organizational goals should also be communicated and cascaded throughout the organization to ensure the risk awareness and engagement of all stakeholders. References = Risk and Information Systems Control Study Manual, Chapter 1, Section 1.3.2, p. 27-28

Assessing risk scenarios is the starting point when performing a risk analysis for an asset. A risk scenario is a description of a possible event or situation that could cause harm or loss to an asset. Assessing risk scenarios involves identifying the sources and causes of risk, the potential impacts and consequences of risk, and the likelihood and frequency of risk occurrence. Assessing risk scenarios can help establish the risk context, scope, and criteria for the asset, and provide the basis for further risk analysis steps, such as evaluating threats, assessing controls, and updating the risk register. According to the CRISC Review Manual 2022, assessing risk scenarios is the first step in the IT risk assessment process1. According to the CRISC Review Questions, Answers & Explanations Manual 2022, assessing risk scenarios is the correct answer to this question

The most important foundational element of an effective three lines of defense model for an organization is clearly defined roles and responsibilities. The three lines of defense model is a framework that outlinesthe roles and responsibilities of different functions or groups within the organization in relation to risk management and internal control1. The three lines of defense are:
The first line of defense, which consists of the operational management and staff who own and manage the risks associated with their activities and processes. They are responsible for identifying, assessing, and mitigating the risks, as well as designing, implementing, and operating the controls.
The second line of defense, which consists of the specialized functions or units that provide oversight, guidance, and support to the first line of defense in managing the risks and controls. They are responsible for developing and maintaining the risk management framework, policies, and standards, as well as monitoring and reporting on the risk and control performance.
The third line of defense, which consists of the internal audit function that provides independent and objective assurance on the effectiveness and efficiency of the risk management and internal control system. They are responsible for evaluating and testing the design and operation of the risks and controls, as well as reporting and recommending improvements to the seniormanagement and the board. Clearly defined roles and responsibilities are essential for ensuring that the three lines of defense model works effectively and efficiently. They help to avoid confusion, duplication, or gaps in the risk management and internal control activities, as well as to ensure accountability, coordination, and communication among the different functions or groups. They also help to establish the appropriate level of independence, authority, and competence for each line of defense, as well as to align the risk management and internal control objectives and strategies with the organization's goals and values2. The other options are not the most important foundational element of an effective three lines of defense model for an organization, as they are either less relevant or less specific than clearly defined roles and responsibilities. A robust risk aggregation tool set is a set of methods or techniques that enable the organization to collect, consolidate, and analyze the risk data and information from different sources, levels, or perspectives. A robust risk aggregation tool set can help to enhance the risk identification, assessment, and reporting processes, as well as to support the risk decision making and prioritization. However, a robust risk aggregationtool set is not the most important foundational element of an effective three lines of defense model for an organization, as it does not address the roles and responsibilities of the different functions or groups in relation to risk management and internal control. A well-established risk management committee is a group of senior executives or managers who are responsible for overseeing and directing the risk management activities and performance of the organization. A well-established risk management committee can help to ensure the alignment and integration of the risk management objectives and strategies with the organization's goals and values, as well as to provide guidance and support to the different functions or groups involved in risk management and internal control. However, a well-established risk management committee is not the most important foundational element of an effective three lines of defense model for an organization, as it does not cover theroles and responsibilities of the operational management and staff, the specialized functions or units, or the internal audit function. Well-documented and communicated escalation procedures are the steps or actions that are taken to report and resolve any issues or incidents that may affect the risk management and internal control activities or performance of the organization. Well-documented and communicated escalation procedures can help to ensure the timely and appropriate response and resolution of the issues or incidents, as well as to inform and involve the relevant stakeholders and authorities. However, well-documented and communicated escalation procedures are not the most important foundational element of an effective three lines of defense model for an organization, as they do not define the roles and responsibilities of the different functions or groups in relation to risk management and internal control. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter
3, Section 3.1.1, Page 85.

Key control indicators (KCIs) are metrics that measure how well a specific control is performing in reducing the causes, consequences, or likelihood of a risk1. Key risk indicators (KRIs) are metrics that measure changes in the risk exposure or the potential impact of a risk2. By linking an effective KCI to relevant KRIs, the organization can monitor changes in the risk environment and assess how the control is influencing the risk level3. This can help the organization to:
Identify emerging or escalating risks and take timely and appropriate actions Evaluate the effectiveness and efficiency of the control and make improvements if needed Align the control with the risk appetite and tolerance of the organization Communicate the risk and control status to stakeholders and regulators References = Risk and Information Systems Control Study Manual, Chapter 6: Risk Response and Mitigation4

Residual risk is the risk that remains after the implementation of risk responses. An effective risk management program should aim to reduce the residual risk to a level that is acceptable by the enterprise, in alignment with its risk appetite and tolerance. The reduction of residual risk indicates that the risk responses are appropriate and effective, and that the enterprise is achieving its objectives while managing its risks. The other options are not necessarily indicative of an effective risk management program, as they may depend on other factors, such as the reporting culture, the audit scope and methodology, and the nature and source of the inherent risk. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 1, Section
1.2.3.1, pp. 24-25.