You are the risk professional of your enterprise. Your enterprise has introduced new systems in
many departments. The business requirements that were to be addressed by the new system are
still unfulfilled, and the process has been a waste of resources. Even if the system is implemented,
it will most likely be underutilized and not maintained making it obsolete in a short period of time.
What kind of risk is it?
A.
Inherent risk
B.
Business risk
C.
Project risk
D.
Residual risk
Explanation:
Business risk relates to the likelihood that the new system may not meet the user business needs,
requirements and expectations. Here in this stem it is said that the business requirements that
were to be addressed by the new system are still unfulfilled, therefore it is a business risk.
Answer A is incorrect. This is one of the components of risk. Inherent risk is the risk level or
exposure without applying controls or other management actions into account.
But here in this stem no description of control is given, hence it cannot be concluded whether it is
a inherent risk or not.
Answer C is incorrect. Project risk are related to the delay in project deliverables. The project
activities to design and develop the system exceed the limits of the financial resources set aside
for the project. As a result, the project completion will be delayed.
They are not related to fulfillment of business requirements.
Answer D is incorrect. This is one of the components of risk. Residual risk is the risk that remains
after applying controls.
But here in this stem no description of control is given, hence it cannot be concluded whether it is
a residual risk or not.