What is a key outcome of using key performance indicators (KPIs) in risk management?

Using key performance indicators (KPIs) in risk management is crucial for assessing the effectiveness of risk controls within an organization. When KPIs are implemented, one of the primary outcomes is the ability to measure and determine whether the controls established to mitigate risks are functioning effectively and are operating according to the standards set by management.

KPIs provide quantifiable metrics that help organizations monitor control performance over time, allowing management to see if the controls are achieving the desired outcomes. This supports the goal of ensuring that the risk environment remains within acceptable levels, providing insights that can inform strategic decisions and necessary adjustments to risk management practices.

In contrast, while enhancing employee training programs, reducing the cost of compliance audits, and creating detailed risk assessment documents may play a role in a comprehensive risk management strategy, they are not direct outcomes of using KPIs. KPIs are specifically focused on measuring performance and the adequacy of risk control mechanisms.