CRISC Certified in Risk and Information Systems Control – Question334

You are preparing to complete the quantitative risk analysis process with your project team and several subject matter experts. You gather the necessary inputs including the project's cost management plan. Why is it necessary to include the project's cost management plan in the preparation for the quantitative risk analysis process?

A. The project's cost management plan provides control that may help determine the structure for quantitative analysis of the budget.
B. The project's cost management plan can help you to determine what the total cost of the project is allowed to be.
C. The project's cost management plan provides direction on how costs may be changed due to identified risks.
D. The project's cost management plan is not an input to the quantitative risk analysis process.

Correct Answer: A

Explanation:

Explanation: The cost management plan is an input to the quantitative risk analysis process because of the cost management control it provides. The cost management plan sets how the costs on a project are managed during the project’s life cycle. It defines the format and principles by which the project costs are measured, reported, and controlled. The cost management plan identifies the person responsible for managing costs, those who have the authority to approve changes to the project or its budget, and how cost performance is quantitatively calculated and reported upon.
Incorrect Answers:
B: The cost management plan defines the estimating, budgeting, and control of the project’s cost.
C: While the cost management plan does define the cost change control system, this is not the best answer for this
D: This is not a valid statement. The cost management plan is an input to the quantitative risk analysis process.