For classic risk assessment, indicator failure factor represents the impact of risk indicator failures on what score?

The indicator failure factor in classic risk assessment is associated specifically with the calculated Annual Loss Expectancy (ALE). Calculated ALE refers to the total expected loss from a risk over a year considering both the frequency of the risk event and its potential impact. When risk indicators fail, it directly affects the calculated ALE by altering the assumptions or data used to determine potential losses.

Inherent ALE reflects the expected losses without considering risk mitigation strategies, so it wouldn’t adjust based on failures of risk indicators. Residual ALE pertains to losses after controls are applied, which also wouldn’t factor in indicator failures directly. Inherent SLE (Single Loss Expectancy) exclusively addresses the loss potential from a single event, thus lacking the broader context of how multiple indicators might fail and their cumulative impact over a year.

Therefore, understanding the dynamics between risk indicators and calculated ALE is essential, as the failure of indicators can lead to inaccurate estimates of risk, which ultimately affects the organization’s risk management and mitigation strategies.