You're reading from ISACA Certified in Risk and Information Systems Control (CRISC®) Exam Guide

Product typeBook

Published inSep 2023

PublisherPackt

ISBN-139781803236902

Edition1st Edition

Concepts

Cybersecurity

Author (1)

Shobhit Mehta

Risk Assessment Concepts, Standards, and Frameworks

In this chapter, we will aim to continue the learnings from the previous chapter where we learned about threats, vulnerabilities, and how they translate into risk. In this chapter, we will dive deep into risk assessment concepts (risk scenarios, risk register, and so on), risk assessment standards, and risk management frameworks. We will also learn about maintaining an effective risk register and how we can leverage already available industry risk catalogs to baseline the risk assessment program for an organization.

In this chapter, we will cover the following topics:

Risk assessment approaches
Risk assessment methodologies
Risk assessment frameworks
Risk assessment techniques
Importance of a risk register

With that, let us dive into the first section on risk assessment approaches.

Risk assessment approaches

There are two approaches to risk management—top-down and bottom-up.

In a top-down risk assessment approach, risk scenarios are driven from the management perspective that are related directly to the organization’s business objectives. In this approach, risk scenarios are developed for risk events that directly impact the business goals and objectives. Actions from the top-down risk assessment are easier to have a buy-in from the other stakeholders given these are directed from the senior management. The results of the risk assessment tend to be broader in nature as these are based on the experience of the management team managing multiple businesses and functions.

Here’s an example of a top-down risk assessment for a healthcare organization’s new Electronic Health Record (EHR) system, with the Board of Directors’ (BoD) review of the quarterly revenue results, Ethics & Compliance (E&C), senior management performance...

Risk assessment methodologies

An IT risk manager should be hands-on when it comes to performing a risk analysis. The results of a risk analysis directly impact the risk response and, consequently, the resources allocated to each risk area. Therefore, the risk manager should be able to guide and perform the risk analysis and propose a risk response.

There are two primary types of risk analysis—qualitative risk analysis and quantitative risk analysis.

As the name suggests, qualitative risk analysis is based on qualitative parameters such as High, Medium, Low, and Very Low to depict the level of risk. These parameters are assigned to each risk scenario according to their likelihood and impact based on the experience and expertise of the group conducting the risk analysis and therefore may result in subjective outcomes.

On the contrary, quantitative risk analysis is more measured and aims to provide the monetary value at risk if the risk scenario materializes. This type...

Risk assessment frameworks

There are many industry-standard risk assessment frameworks that a risk manager can choose to perform a risk assessment. The risk manager is responsible for ensuring that the organization utilizes the framework that makes the most sense for its risk assessment.

The following is a summary of common industry risk assessment frameworks:

Risk assessment techniques

Conducting a risk assessment is one of the primary skills that each risk practitioner should learn. The results of a risk assessment help the management to prioritize the risk and decide on appropriate risk response strategies.

There are numerous techniques for performing a risk assessment, and none of the techniques is completely right or wrong. The risk practitioner should choose the training they feel is appropriate for their organization and makes the most sense to the stakeholders.

Here is a summary of major risk assessment techniques:

Bayesian analysis: A statistical inference that uses prior distribution data to determine the probability of a result. This technique relies on the prior distribution data to be accurate in order to be effective and produce accurate results.
Bow-tie analysis (BTA): Provides a diagram to communicate risk assessment results by displaying links between possible causes, controls, and consequences.
Brainstorming...

Importance of a risk register

All risks identified in the risk assessment should be entered into a risk register, which could be a sophisticated Software-as-a-Service (SaaS) program or a spreadsheet. At a minimum, the risk register is to maintain details of threats, vulnerabilities, likelihood, impact, inherent risk, current controls, residual risk, countermeasures that will reduce the risk in the future, and a risk owner.

Not all the risks captured in the risk register will have the same priority, and a risk practitioner should dedicate sufficient time to determine which risks should be prioritized for remediation and which should be revisited later.

The best way to identify the risks that should be prioritized is to discuss the likelihood and impact with the stakeholders at the time of risk assessment. This helps the risk manager to eliminate guesswork on which risks could cause more damage to the organization and should be remediated on priority. If a risk cannot be remediated...

Summary

At the beginning of this chapter, we learned about risk assessment approaches and the best ways to address risks. We then learned about risk assessment methodologies and industry-wide risk assessment frameworks. Each organization has unique requirements for risk assessment and each risk analysis needs a different skill set; therefore, the risk manager needs to understand the current maturity and choose a risk analysis technique that will be suitable for them. In the next section, we switched gears to learn more about the actual risk assessment techniques that the organization can use and the importance of maintaining an effective risk register after the risk assessment is complete. The risk manager can opt for different techniques before settling on one or perhaps use a combination of these techniques to understand the risks from different perspectives. The risk register should be a live document and should be updated whenever the risk changes due to internal or external factors...

Review questions

Which of the following frameworks is primarily used for quantitative risk management?
1. NIST 800-30
2. FAIR
3. ISO 27001
4. ISO 27005
A top-down risk assessment starts from the __.
1. Team
2. Individual
3. Organization
4. Department
A bottom-up risk assessment starts from the __.
1. Team
2. Individual
3. Organization
4. Department
Which of the following is NOT true about qualitative risk management?
1. Less expensive
2. Subjective
3. Requires complex computation
4. Focused on severity
Which of the following NIST frameworks provides guidance for supply chain management?
1. 800-161
2. 800-30
3. 800-57
4. 27001
Which of the following risk assessment techniques provides the results of a risk assessment by displaying links between possible causes, controls, and consequences in terms of a diagram?
1. FAIR
2. BTA
3. Markov analysis
4. Monte Carlo analysis
The results of a risk assessment should be summarized as a(n) __.
1. CAP
2. Business continuity plan
3. Organizational chart
4. Risk register

Answers

B. FAIR is primarily used for quantitative risk management; all the other options are for qualitative risk management.
C. A top-down risk assessment starts from the organization and moves to the individual level.
B. A bottom-up risk assessment starts from the individual and moves to the organizational level.
C. Qualitative risk management doesn’t require complex computations. Quantitative risk management requires complex computations.
A. NIST 800-161 is used for supply chain management. The other options are distractors.
B. BTA shows the results of a risk assessment in the form of a diagram.
D. A risk register is the immediate result of a risk assessment. All the other options are distractors.

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Author (1)

Shobhit Mehta

Shobhit Mehta is the Security and Compliance Director at Headspace, an on-demand mental health company in San Francisco, CA. Previously, he worked in different facets of security and assurance with HSBC, Deutsche Bank, Credit Suisse, PayPal, and Fidelity Investments. He also works with ISACA to develop exam questions for CISA, CISM, and CGEIT, served as the technical reviewer for the CGEIT and CISA review manuals, and is a published author for the COBIT 5 journal. He completed his MS in cybersecurity at Northeastern University, Boston, and holds CRISC, CISM, CISA, CGEIT, CISSP, and CCSP certifications. In his spare time, he likes to explore the inclined trails of the Bay Area, complete ultramarathons, and blog on GRCMusings.
Read more about Shobhit Mehta

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Framework	Description
NIST SP 800-30	Risk management for general information systems
NIST SP 800-37	Risk management for federal information systems
NIST SP 800-161	Risk management for supply chain management
ISO/IEC 27005	Risk management for information systems
ISO/IEC 31010	Risk management...