Cisco Certified Support Technician (CCST) CybersecurityRisk ManagementEasy
A healthcare provider is implementing a new electronic health record (EHR) system. They are particularly concerned about ensuring patient data privacy in accordance with HIPAA regulations. The organization's risk management team is focusing on identifying risks associated with non-compliance and potential legal penalties. What type of risk is the team primarily concerned with?
- AStrategic Risk
- BOperational Risk
- CCompliance Risk
- DReputational Risk
Show answer & explanationAnswer & explanation
Correct answer: C. Compliance Risk
Compliance risk refers to the potential for legal penalties, financial forfeiture, and material loss an organization faces due to failure to comply with laws, regulations, and internal policies. The scenario specifically mentions HIPAA regulations and concerns about non-compliance and legal penalties.
Why the other options are wrong
- A. Strategic risk relates to risks that affect the organization's ability to achieve its objectives.
- B. Operational risk relates to failures in internal processes, people, and systems.
- D. Reputational risk is the risk of damage to an organization's public image and standing.
Compliance Risk
The potential for legal sanctions, financial losses, or damage to reputation resulting from an organization's failure to adhere to laws, regulations, standards, and internal policies.
- Driven by regulatory requirements (e.g., HIPAA, GDPR).
- Can result in fines, legal action, and loss of license.
- Requires continuous monitoring and adaptation to new laws.
Memory trick: Compliance risk is like a watchful legal eagle.