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A company has identified a security risk that could potentially impact business operations but has determined that the cost of implementing controls exceeds the potential loss. Which risk response strategy is the company most likely implementing?
Risk mitigation
Risk transfer
Risk avoidance
Risk acceptance
Risk acceptance is the appropriate strategy when an organization decides to acknowledge a risk and not take any action to reduce its likelihood or impact, typically because the cost of other risk responses exceeds the potential loss. In this scenario, the company has evaluated the cost-benefit analysis and determined that addressing the risk costs more than the potential impact, making acceptance the logical choice.
Risk avoidance would involve eliminating the risk entirely by avoiding the activity that creates it. Risk transfer would involve shifting the risk to a third party (like through insurance). Risk mitigation would involve implementing controls to reduce the risk's likelihood or impact, which the scenario explicitly states is too costly.
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