IT RM Ratings Defs Flashcards
(91 cards)
1
Q
Financial institutions and service providers rated THIS exhibit strong performance in every respect and generally have components rated 1 or 2.
A
Composite 1
2
Q
Weaknesses in IT are minor in nature and are easily corrected during the normal course of business.
A
Composite 1
3
Q
Risk management processes provide a comprehensive program to identify and monitor risk relative to the size, complexity, and risk profile of the entity.
A
Composite 1
4
Q
Strategic plans are well defined and fully integrated throughout the organization.
A
Composite 1
5
Q
This allows management to quickly adapt to changing market, business, and technology needs of the entity.
A
Composite 1
6
Q
Management identifies weaknesses promptly and takes appropriate corrective action to resolve audit and regulatory concerns.
A
Composite 1
7
Q
The financial condition of the service provider is strong and overall performance shows no cause for supervisory concern.
A
Composite 1
8
Q
Financial institutions and service providers rated THIS exhibit safe and sound performance but may demonstrate modest weaknesses in operating performance, monitoring, management processes, or system development.
A
Composite 2
9
Q
Generally, senior management corrects weaknesses in the normal course of business.
A
Composite 2
10
Q
Risk management processes adequately identify and monitor risk relative to the size, complexity, and risk profile of the entity.
A
Composite 2
11
Q
Strategic plans are defined but may require clarification, better coordination, or improved communication throughout the organization.
A
Composite 2
12
Q
As a result, management anticipates, but responds less quickly, to changes in market, business, and technological needs of the entity.
A
Composite 2
13
Q
Management normally identifies weaknesses and takes appropriate corrective action.
A
Composite 2
14
Q
However, greater reliance is placed on audit and regulatory intervention to identify and resolve concerns.
A
Composite 2
15
Q
The financial condition of the service provider is acceptable and while internal control weaknesses may exist, there are no significant supervisory concerns.
A
Composite 2
16
Q
As a result, supervisory action is informal and limited.
A
Composite 2
17
Q
Financial institutions and service providers rated THIS exhibit some degree of supervisory concern due to a combination of weaknesses that may range from moderate to severe.
A
Composite 3
18
Q
If weaknesses persist, further deterioration in the condition and performance of the institution or service provider is likely.
A
Composite 3
19
Q
Risk management processes may not effectively identify risks and may not be appropriate for the size, complexity, or risk profile of the entity.
A
Composite 3
20
Q
Strategic plans are vaguely defined and may not provide adequate direction for IT initiatives.
A
Composite 3
21
Q
As a result, management often has difficulty responding to changes in business, market, and technological needs of the entity.
A
Composite 3
22
Q
Self-assessment practices are weak and are generally reactive to audit and regulatory exceptions.
A
Composite 3
23
Q
Repeat concerns may exist indicating that management may lack the ability or willingness to resolve concerns.
A
Composite 3
24
Q
The financial condition of the service provider may be weak and/or negative trends may be evident.
A
Composite 3
25
While financial or operational failure is unlikely, increased supervision is necessary.
Composite 3
26
Formal or informal supervisory action may be necessary to secure corrective action.
Composite 3
27
Financial institutions and service providers rated THIS operate in an unsafe and unsound environment that may impair the future viability of the entity.
Composite 4
28
Operating weaknesses are indicative of serious managerial deficiencies.
Composite 4
29
Risk management processes inadequately identify and monitor risk, and practices are not appropriate given the size, complexity, and risk profile of the entity.
Composite 4
30
Strategic plans are poorly defined and not coordinated or communicated throughout the organization.
Composite 4
31
As a result, management and the board are not committed to, or may be incapable of ensuring, that technological needs are met.
Composite 4
32
Management does not perform self-assessments and demonstrates an inability or unwillingness to correct audit and regulatory concerns.
Composite 4
33
The financial condition of the service provider is severely impaired or deteriorating.
Composite 4
34
Failure of the financial institution or service provider may be likely unless IT problems are remedied.
Composite 4
35
Close supervisory attention is necessary and, in most cases, formal enforcement action is warranted.
Composite 4
36
Financial institutions and service providers rated THIS exhibit critically deficient operating performances and are in need of immediate remedial action.
Composite 5
37
Operational problems and serious weaknesses may exist throughout the organization.
Composite 5
38
Risk management processes are severely deficient and provide management little or no perception of risk relative to the size, complexity, and risk profile of the entity.
Composite 5
39
Strategic plans do not exist or are ineffective, and management and the board provide little or no direction for IT initiatives.
Composite 5
40
As a result, management is unaware of, or inattentive to, technological needs of the entity.
Composite 5
41
Management is unwilling or incapable of correcting audit and regulatory concerns.
Composite 5
42
The financial condition of the service provider is poor and failure is highly probable due to poor operating performance or financial instability.
Composite 5
43
Ongoing supervisory attention is necessary.
Composite 5
44
Strong performance: Performance that is significantly higher than average.
Component 1
45
Satisfactory performance: Performance that is average or slightly above and that provides adequately for the safe and sound operation of the data center.
Component 2
46
Less than satisfactory: Performance that exhibits some degree of supervisory concern due to a combination of weaknesses that may range from moderate to severe.
Component 3
47
Deficient: Performance that is in an unsafe and unsound environment that may impair the future viability of the entity.
Component 4
48
Critically deficient: Performance that is critically deficient and in need of immediate remedial attention. The financial condition of the service provider is poor and failure is highly probable due to poor operating performance or financial instability.
Component 5
49
Audit independently identifies and reports weaknesses and risks to the board of directors or its audit committee in a thorough and timely manner.
Audit - 1
50
Audit independently identifies and reports weaknesses and risks to the board of directors or audit committee, but reports may be less timely.
Audit - 2
51
Audit identifies and reports weaknesses and risks; however, independence may be compromised and reports presented to the board or audit committee may be less than satisfactory in content and timeliness.
Audit - 3
52
Audit may identify weaknesses and risks but it may not independently report to the board or audit committee and report content may be inadequate.
Audit - 4
53
If an audit function exists, it lacks sufficient independence and, as a result, does not identify and report weaknesses or risks to the board or audit committee.
Audit - 5
54
Effective risk management practices are in place to guide IT activities, and risks are consistently and effectively identified, measured, controlled, and monitored. Management immediately resolves audit and regulatory concerns to ensure sound operations. Written technology plans, policies and procedures, and standards are thorough and properly reflect the complexity of the IT environment. They have been formally adopted, communicated, and enforced throughout the organization. IT systems provide accurate, timely reports to management. These reports serve as the basis of major decisions and as an effective performance-monitoring tool. Outsourcing arrangements are based on comprehensive planning; routine management supervision sustains an appropriate level of control over vendor contracts, performance, and services provided. Management and the board have demonstrated the ability to promptly and successfully address existing IT problems and potential risks.
Mgmt - 1
55
Adequate risk management practices are in place and guide IT activities. Significant IT risks are identified, measured, monitored, and controlled; however, risk management processes may be less structured or inconsistently applied and modest weaknesses exist. Management routinely resolves audit and regulatory concerns to ensure effective and sound operations; however, corrective actions may not always be implemented in a timely manner. Technology plans, policies, procedures, and standards are adequate and are formally adopted. However, minor weaknesses may exist in management's ability to communicate and enforce them throughout the organization. IT systems provide quality reports to management that serve as a basis for major decisions and a tool for performance planning and monitoring. Isolated or temporary problems with timeliness, accuracy, or consistency of reports may exist. Outsourcing arrangements are adequately planned and controlled by management, and provide for a general understanding of vendor contracts, performance standards, and services provided. Management and the board have demonstrated the ability to address existing IT problems and risks successfully.
Mgmt - 2
56
Risk management practices may be weak and offer limited guidance for IT activities. Most IT risks are generally identified; however, processes to measure and monitor risk may be flawed. As a result, management's ability to control risk is less than satisfactory. Regulatory and audit concerns may be addressed, but time frames are often excessive and the corrective action taken may be inappropriate. Management may be unwilling or incapable of addressing deficiencies. Technology plans, policies, procedures, and standards exist, but may be incomplete. They may not be formally adopted, effectively communicated, or enforced throughout the organization. IT systems provide requested reports to management, but periodic problems with accuracy, consistency, and timeliness lessen the reliability and usefulness of reports and may adversely affect decision making and performance monitoring. Outsourcing arrangements may be entered into without thorough planning. Management may provide only cursory supervision that limits its understanding of vendor contracts, performance standards, and services provided. Management and the board may not be capable of addressing existing IT problems and risks, as evidenced by untimely corrective actions for outstanding IT problems.
Mgmt - 3
57
Risk management practices are inadequate and do not provide sufficient guidance for IT activities. Critical IT risks are not properly identified, and processes to measure and monitor risks are not properly identified, and processes to measure and monitor risks are deficient. As a result, management may not be aware of and is unable to control risks. Management may be unwilling or incapable of addressing audit and regulatory deficiencies in an effective and timely manner. Technology plans, policies and procedures, and standards are inadequate, have not been formally adopted or effectively communicated throughout the organization, and management does not effectively enforce them. IT systems do not routinely provide management with accurate, consistent, and reliable reports, thus contributing to ineffective performance monitoring or flawed decision-making. Outstanding arrangements may be entered into without planning or analysis, and management may provide little or no supervision of vendor contracts, performance standards, or services provided. Management and the board are unable to address existing IT problems and risks, as evidenced by ineffective actions and longstanding IT weaknesses. Strengthening of management and its processes is necessary. The financial condition of the service provider may threaten its viability.
Mgmt - 4
58
Risk management practices are severely flawed and provide inadequate guidance for IT activities. Critical IT risks are not identified, and processes to measure and monitor risks do not exist, or are not effective. Management's inability to control risk may threaten the continued viability of the institution or service provider. Management is unable or unwilling to correct audit and regulatory identified deficiencies and immediate action by the board is required to preserve the viability of the institution or service provider. If they exist, technology plans, policies, procedures, and standards are critically deficient. Because of systemic problems, IT systems do not produce management reports that are accurate, timely, or relevant. Outsourcing arrangements may have been entered into without management planning or analysis, resulting in significant losses to the financial institution or ineffective vendor services. The financial condition of the service provider presents an imminent threat to its viability.
Mgmt - 5
59
systems development, acquisition, implementation, and change management performance. Management and the board routinely demonstrate successfully the ability to identify and implement appropriate IT solutions while effectively managing risk. Project management techniques and the SDLC are fully effective and supported by written policies, procedures, and project controls that consistently result in timely and efficient project completion. An independent quality assurance function provides strong controls over testing and program change management. Technology solutions consistently meet end-user needs. No significant weaknesses or problems exist.
Development and Acquisition - 1
60
systems development, acquisition, implementation, and change management performance. Management and the board frequently demonstrate the ability to identify and implement appropriate IT solutions while managing risk. Project management and the SDLC are generally effective; however, weaknesses may exist that result in minor project delays or cost overruns. An independent quality assurance function provides adequate supervision of testing and program change management, but minor weaknesses may exist. Technology solutions meet end-user needs. However, minor enhancements may be necessary to meet original user expectations. Weaknesses may exist; however, they are not significant and they are easily corrected in the normal course of business.
Development and Acquisition - 2
61
systems development, acquisition, implementation, and change management performance. Management and the board may often be unsuccessful in identifying and implementing appropriate IT solutions; therefore, unwarranted risk exposure may exist. Project management techniques and the SDLC are weak and may result in frequent project delays, backlogs or significant cost overruns. The quality assurance function may not be independent of the programming function, which may adversely impact the integrity of testing, and program change management. Technology solutions generally meet end-user needs, but often require an inordinate level of change after implementation. Because of weaknesses, significant problems may arise that could result in disruption to operations or significant losses.
Development and Acquisition - 3
62
systems development, acquisition, implementation, and change management performance. Management and the board may be unable to identify and implement appropriate IT solutions and do not effectively manage risk. Project management techniques and the SDLC are ineffective and may result in severe project delays and cost overruns. The quality assurance function is not fully effective and may not provide independent or comprehensive review of testing controls or program change management. Technology solutions may not meet the critical needs of the organization. Problems and significant risks exist that require immediate action by the board and management to preserve the soundness of the institution.
Development and Acquisition - 4
63
systems development, acquisition, implementation, and change-management performance. Management and the board appear to be incapable of identifying and implementing appropriate information technology solutions. If they exist, project management techniques and the SDLC are critically deficient and provide little or no direction for development of systems or technology projects. The quality assurance function is severely deficient or not present and unidentified problems in testing and program change management have caused significant IT risks. Technology solutions do not meet the needs of the organization. Serious problems and significant risks exist that raise concern for the financial institution or service provider's ongoing viability.
Development and Acquisition - 5
64
The organization provides technology services that are reliable and consistent. Service levels adhere to well-defined service-level agreements and routinely meet or exceed business requirements. A comprehensive corporate contingency and business resumption plan is in place. Annual contingency plan testing and updating is performed; and, critical systems and applications are recovered within acceptable time frames. A formal written data security policy and awareness program is communicated and enforced throughout the organization. The logical and physical security for all IT platforms is closely monitored, and security incidents and weaknesses are identified and quickly corrected. Relationships with third-party service providers are closely monitored. IT operations are highly reliable, and risk exposure is successfully identified and controlled.
Support & Delivery - 1
65
The organization provides technology services that are generally reliable and consistent; however, minor discrepancies in service levels may occur. Service performance adheres to service agreements and meets business requirements. A corporate contingency and business resumption plan is in place, but minor enhancements may be necessary. Annual plan testing and updating is performed and minor problems may occur when recovering systems or applications. A written data security policy is in place but may require improvement to ensure its adequacy. The policy is generally enforced and communicated throughout the organization, e.g., through a security awareness program. The logical and physical security for critical IT platforms is satisfactory. Systems are monitored, and security incidents and weaknesses are identified and resolved within reasonable time frames. Relationships with third-party service providers are monitored. Critical IT operations are reliable and risk exposure is reasonably identified and controlled.
Support & Delivery - 2
66
The organization provides technology services that may not be reliable or consistent. As a result, service levels periodically do not adhere to service-level agreements or meet business requirements. A corporate contingency and business resumption plan is in place but may not be considered comprehensive. The plan is periodically tested; however, the recovery of critical systems and applications is frequently unsuccessful. A data security policy exists; however, it may not be strictly enforced or communicated throughout the organization. The logical and physical security for critical IT platforms is less that satisfactory. Systems are monitored; however, security incidents and weaknesses may not be resolved in a timely manner. Relationships with third-party service providers may not be adequately monitored. IT operations are not acceptable and unwarranted risk exposures exist. If not corrected, weaknesses could cause performance degradation or disruption to operations.
Support & Delivery - 3
67
The organization provides technology services that are unreliable and inconsistent. Service-level agreements are poorly defined and service performance usually fails to meet business requirements. A corporate contingency and business resumption plan may exist, but its content is critically deficient. If contingency testing is performed, management is typically unable to recover critical systems and applications. A data security policy may not exist. As a result, serious supervisory concerns over security and the integrity of data exist. The logical and physical security for critical IT platforms is deficient. Systems may be monitored, but security incidents and weaknesses are not successfully identified or resolved. Relationships with third-party service providers are not monitored. IT operations are not reliable and significant risk exposure exists. Degradation in performance is evident and frequent disruption in operations has occurred.
Support & Delivery - 4
68
The organization provides technology services that are not reliable or consistent. Service-level agreements do not exist and service performance does not meet business requirements. A corporate contingency and business resumption plan does not exist. Contingency testing is not performed and management has not demonstrated the ability to recover critical systems and applications. A data security policy does not exist, and a serious threat to the organization's security and data integrity exists. The logical and physical security for critical IT platforms is inadequate, and management does not monitor systems for security incidents and weaknesses. Relationships with third-party service providers are not monitored, and the viability of a service provider may be in jeopardy. IT operations are severely deficient, and the seriousness of weaknesses could cause failure of the financial institution or service provider if not addressed.
Support & Delivery - 5
69
Outstanding audit issues are monitored until resolved.
Audit - 1
70
Risk analysis ensures that audit plans address all significant IT operations, procurement, and development activities with appropriate scope and frequency.
Audit - 1
71
Audit work is performed in accordance with professional auditing standards and report content is timely, constructive, accurate, and complete.
Audit - 1
72
Because audit is THIS, examiners may place substantial reliance on audit results.
Audit - 1
73
Significant outstanding audit issues are monitored until resolved.
Audit - 2
74
Risk analysis ensures that audit plans address all significant IT operations, procurement, and development activities; however, minor concerns may be noted with the scope or frequency.
Audit - 2
75
Audit work is performed in accordance with professional auditing standards; however, minor or infrequent problems may arise with the timeliness, completeness, and accuracy of reports.
Audit - 2
76
Because audit is THIS, examiners may rely on audit results but because minor concerns exist, examiners may need to expand verification procedures in certain situations.
Audit - 2
77
Outstanding audit issues may not be adequately monitored.
Audit - 3
78
Risk analysis is less than satisfactory.
Audit - 3
79
As a result, the audit plan may not provide sufficient audit scope or frequency for IT operations, procurement, and development activities.
Audit - 3
80
Audit work is generally performed in accordance with professional auditing standards; however, occasional problems may be noted with the timeliness, completeness, or accuracy of reports.
Audit - 3
81
Because audit is THIS, examiners must use caution if they rely on the audit results.
Audit - 3
82
Outstanding audit issues may not be adequately monitored and resolved.
Audit - 4
83
Risk analysis is deficient.
Audit - 4
84
As a result, the audit plan does not provide adequate audit scope or frequency for IT operations, procurement, and development activities.
Audit - 4
85
Audit work is often inconsistent with professional auditing standards and the timeliness, accuracy, and completeness of reports is unacceptable.
Audit - 4
86
Because audit is THIS, examiners cannot rely on audit results.
Audit - 4
87
Outstanding audit issues are not tracked and no follow-up is performed to monitor their resolution.
Audit. - 5
88
Risk analysis is critically deficient.
Audit. - 5
89
As a result, the audit plan is ineffective and provides inappropriate audit scope and frequency for IT operations, procurement, and development activities.
Audit. - 5
90
Audit work is not performed in accordance with professional auditing standards and major deficiencies are noted regarding the timeliness, accuracy, and completeness of audit reports.
Audit. - 5
91
Because audit is critically deficient, examiners cannot rely on audit results.
Audit. - 5
