When reviewing the risk profile of an enterprise during the governance design phase, what MUST be established prior to conducting a high-level risk analysis?
The risk profile of an enterprise is a design factor that describes how an enterprise identifies, assesses, responds to, monitors, and reports on information and technology risks. The risk profile helps to determine the level of risk appetite and tolerance that an enterprise has for its information and technology activities, as well as the level of control and assurance that is required for its governance framework. When reviewing the risk profile of an enterprise during the governance design phase, one of the prerequisites that must be established prior to conducting a high-level risk analysis is the enterprise’s risk appetite. The risk appetite is the amount and type of risk that an enterprise is willing to accept in pursuit of its objectives. The risk appetite provides a basis for defining the risk criteria, thresholds, indicators, and responses that will be used in the risk analysis process. The risk appetite also helps to align the governance framework with the enterprise’s strategy and objectives.
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