A Risk Manager Generally Uses Root-Cause Analysis to Investigate Incidents

question 1

Multiple Choice

A risk manager generally uses root-cause analysis to investigate incidents. What are the likely outcomes of this action? Note: Credit will be given only if all correct choices and no incorrect choices are selected. Select all that apply.

• A) There is disagreement over the cause of the incident.
• B) There are insufficient resources to make needed changes to prevent similar incidents.
• C) The system or process causing the incident is identified and corrected.
• D) Improvements to the system are widespread.
• E) Sufficient evidence is acquired so that management is comfortable in making needed changes.

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Definitions:

Prospect Theory

A behavioral economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are unknown.

Behavioral Economists

Scholars examining how psychological, cognitive, emotional, cultural, and social influences affect the financial choices of individuals and organizations.

Gains

Increases in economic benefits, such as profits, revenue, or utility.

Losses

Negative financial results from business operations, where expenses exceed revenues.