Failing a security test indicates a security control weakness already realized, qualifying as an incident (a deviation from expected security state).
CRISC guidance:
"When a vulnerability or control deficiency is detected through testing or monitoring, it constitutes an information security incident that must be logged and evaluated." A risk event is broader and refers to potential or hypothetical occurrences, not confirmed test failures.
Hence, C. As an incident is correct.
CRISC Reference: Domain 4 - Risk and Control Monitoring, Topic: Incident Management.