An interruption in business productivity is considered as which of the following risks?

A.
Reporting risk

B.
Operational risk

C.
Legal risk

D.
Strategic risk

Explanation:

Operation risks encompass any potential interruption in business. Operational risks are those risk
that are associated with the day-to-day operations of the enterprise. They are generally more
detailed as compared to strategic risks. It is the risk of loss resulting from inadequate or failed

internal processes, people and systems, or from external events. Some sub-categories of
operational risks include:
Organizational or management related risks
Information security risks
Production, process, and productivity risks
Profitability operational risks
Business interruption risks
Project activity risks
Contract and product liability riss
Incidents and crisis
Illegal or malicious acts
Answer D is incorrect. Strategic risks have potential which breaks in obtaining strategic objectives.
Since the strategic objective will shape and impact the entire organization, the risk of not meeting
that objective can impose a great threat on the organization.
Answer A is incorrect. Reporting risks are those occurrences which prevent accurate and timely
reporting.
Answer C is incorrect. Legal risks are dealing with those events which can deteriorate the
company’s legal status. Legal compliance is the process or procedure to ensure that an
organization follows relevant laws, regulations and business rules. The definition of legal
compliance, especially in the context of corporate legal departments, has recently been expanded
to include understanding and adhering to ethical codes within entire professions, as well.
Hence legal and compliance risk has the potential to deteriorate company’s legal or regulatory
status.