Isaca Exam IT Risk Fundamentals Topic 4 Question 5 Discussion

Actual exam question for Isaca's IT Risk Fundamentals exam

Question #: 5
Topic #: 4

An enterprise is currently experiencing an unacceptable 8% processing error rate and desires to manage risk by establishing a policy that error rates cannot exceed 5%. In addition, management wants to be alerted when error rates meet or exceed 4%. The enterprise should set a key performance indicator (KPI) metric at which of the following levels?

A5%

B4%

C8%

Show Suggested Answer

Suggested Answer: B

Setting KPIs:

A Key Performance Indicator (KPI) should be set at a level that allows for early detection and response to deviations from desired performance levels.

In this case, management wants to be alerted when error rates meet or exceed 4%, even though the acceptable limit is 5%.

Alert Threshold:

Setting the KPI at 4% ensures that management receives timely alerts before reaching the unacceptable error rate of 5%.

This approach enables proactive management and correction of processes to maintain error rates within acceptable limits.

Reference:

ISA 315 (Revised 2019), Anlage 5 discusses the importance of monitoring and setting appropriate thresholds for performance and risk indicators to manage and mitigate risks effectively.

by Audra at Nov 15, 2024, 03:47 PM

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Keshia

6 months ago

I bet the person who wrote this question has never actually had to deal with error rates in the real world. Let's set the KPI at 0% and call it a day!

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Amos

4 months ago

Yeah, that would be the dream!

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Delisa

4 months ago

C) 8%

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Fidelia

4 months ago

Haha, I wish we could set it at 0% too!

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Alease

5 months ago

B) 4%

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Laquanda

5 months ago

A) 5%

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Boris

6 months ago

B) 4% is the way to go. Anything higher than that and the enterprise is just asking for trouble. Might as well set the bar high and aim for success!

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Mila

6 months ago

Hmm, I'm not sure. Wouldn't C) 8% be better? It's the current error rate, so why not just stick with that?

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Soledad

5 months ago

I agree, setting the KPI at 4% would allow management to be alerted before the error rate exceeds the desired level.

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Sunshine

5 months ago

B) 4%

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Peggy

6 months ago

A) 5%

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Ollie

6 months ago

I think setting the KPI at 5% would be a good idea to ensure the error rate stays below the desired level.

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Altha

6 months ago

I think B) 4% is the right choice. It's the sweet spot between the desired error rate of 5% and the trigger for management alerts.

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Kenda

5 months ago

Alana: Definitely, it's better to be alerted early on before the error rate gets too high.

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Alberto

5 months ago

User 3: Setting it at 4% will help ensure that we are proactive in managing risk.

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Alana

5 months ago

User 2: Yeah, it makes sense to set the KPI at 4% to stay ahead of any potential issues.

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Ethan

6 months ago

User 1: I agree, B) 4% seems like the best option.

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Lashandra

6 months ago

But wouldn't it be better to set the KPI at 5% to align with the desired maximum error rate?

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Kathryn

7 months ago

I agree with Nan, setting the KPI at 4% makes sense to alert management before error rates exceed 5%.

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Nan

7 months ago

I think the KPI should be set at 4%.

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Artie

7 months ago

The correct answer is B) 4%. This aligns with management's requirement to be alerted when error rates meet or exceed 4%, which is the critical threshold they want to monitor.

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