How do external factors influence risk assessments in the FAIR methodology?

In the FAIR methodology, external factors are significant as they can impact the threat landscape, asset value, and control effectiveness. This means that changes in regulatory environments, market dynamics, or technological advancements can alter the potential threats that an organization faces. Additionally, external factors can influence how much value is attributed to various assets—whether those assets are databases, applications, or personnel—depending on how these factors affect the business environment.

When external threats evolve, for example, becoming more sophisticated or more prevalent, this can heighten the inherent risk associated with those assets. If there’s an increase in cyberattacks targeting a particular industry, the perceived value of mitigating controls may also change, leading to a reassessment of their effectiveness.

Thus, understanding the external environment is crucial to creating a comprehensive risk assessment. It ensures that organizations are not only focused on internal vulnerabilities but also consider how external changes can reshape their risk profile, making option B the correct choice.