CRISC Exam Dumps - Isaca Certification Questions and Answers

The primary reason for a risk practitioner to report changes and trends in the IT risk profile to senior management is to ensure that IT risk is managed within acceptable limits, because it helps to inform and advise the senior management on the current state and direction of IT risk, and to support the risk-based decision making and prioritization. An IT risk profile is a summary of the key IT risks that an organization faces, and their implications for the organization’s objectives and strategy. An IT risk profile may change or evolve over time, due to factors such as new technologies, business initiatives, or external events. Reporting changes and trends in the IT risk profile to senior management is the primary reason, as it helps to ensure that the senior management is aware of and prepared for the IT risk challenges and opportunities, and that the IT risk is managed within the acceptable limits defined by the organization’s risk appetite and tolerance. To ensure risk owners understand their responsibilities, to ensure the organization complies with legal requirements, and to ensure the IT risk awareness program is effective are all possible reasons for reporting changes and trends in the IT risk profile, but they are not the primary reason, as they are not directly related to the management of IT risk within acceptable limits. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.2.3, page 91

Scanning the Internet for unauthorized usage of the enterprise's brand proactively identifies fraudulent activities and enables timely response. This aligns withBrand Protection and Risk Mitigationstrategies.

The MOST critical requirement to include in the contract is the confidentiality of customer data, because it is a legal and ethical obligation of the bank to protect the privacy and security of its customers’ personal and financial information. Outsourcing the statement printing function to an external service provider exposes the customer data to potential unauthorized access, disclosure, or misuse by the service provider or its sub-contractors. Therefore, the contract should specify the terms and conditions for the handling, storage, and disposal of the customer data, as well as the penalties for any breach of confidentiality. The other options are not as critical as the confidentiality of customer data, because:

Option A: Monitoring of service costs is an important requirement to ensure that the service provider delivers the statement printing function within the agreed budget and scope, but it is not as critical as the confidentiality of customer data, which has legal and reputational implications for the bank.

Option B: Provision of internal audit reports is a useful requirement to verify that the service provider complies with the internal and external standards and regulations for the statement printing function, but it is not as critical as the confidentiality of customer data, which is a core value of the bank and its customers.

Option C: Notification of sub-contracting arrangements is a relevant requirement to ensure that the service provider does not delegate the statement printing function to another party without the bank’s consent and oversight, but it is not as critical as the confidentiality of customer data, which is the primary responsibility of the bank and its service provider. References = Risk and Information Systems Control Study Manual, 7th Edition, ISACA, 2020, p. 197.

When establishing leading indicators for the information security incident response process, it is most important to consider the percentage of reported incidents that are resolved within the service levelagreement (SLA). A leading indicator is a metric that can predict or influence the future performance or outcome of a process or activity. A leading indicator for the information security incident response process should measure how well the process is achieving its objectives, such as minimizing the impact of incidents, restoring normal operations as quickly as possible, and preventing recurrence of incidents. The percentage of reported incidents that are resolved within the SLA is a leading indicator that reflects the efficiency and effectiveness of the information security incident response process. It shows how well the process is meeting the expectations and requirements of the stakeholders, such as the business units, customers, and regulators. It also shows how well the process is managing the resources, such as time, budget, and personnel, that are allocated for incident response. A high percentage of reported incidents that are resolved within the SLA indicates that the information security incident response process is performing well and delivering value to the organization. A low percentage of reported incidents that are resolved within the SLA indicates that the information security incident response process is facing challenges and needs improvement. The percentage of reported incidents that are resolved within the SLA can also help identify the root causes of incidents, the gaps in the process, and the areas for improvement. For example, if the percentage of reported incidents that are resolved within the SLA is low, it may indicate that the process has issues with the following aspects: - Incident detection and reporting: The process may not have adequate tools, techniques, or procedures to detect and report incidents in a timely and accurate manner. - Incident prioritization and classification: The process may not have clear and consistent criteria to prioritize and classify incidents based on their severity, impact, and urgency. - Incident analysis and investigation: The process may not have sufficient skills, knowledge, or evidence to analyze and investigate the incidents and determine their root causes, scope, and consequences. - Incident containment and eradication: The process may not have effective methods or measures to contain and eradicate the incidents and prevent them from spreading or escalating. - Incident recovery and restoration: The process may not have reliable backup and recovery plans or systems to restore the normal operations and functionality of the affected systems or services. - Incident communication and escalation: The process may not have proper communication and escalation channels or protocols to inform and involve the relevant stakeholders, such as the management, the users, the vendors, or the authorities. - Incident documentation and closure: The process may not have adequate documentation and closure procedures to record and report the incidents and their resolution. - Incident review and improvement: The process may not have regular review and improvement activities to evaluate and enhance the process and its performance. Therefore, the percentage of reported incidents that are resolved within the SLA is the most important leading indicator for the information security incident response process, as it can provide valuable insights and feedback for the process and its improvement. References = Information Security Incident Response | Process Street1, Key Performance Indicators (KPIs) for Security Operations and Incident Response2, 7 Incident Response Metrics and How to Use Them3

The risk scenario chart shows the initial and residual risk ratings, and the project cost, for four projects named Sierra, Tango, Uniform, and Victor. The initial risk rating is the level of risk before applying any controls or mitigation measures, while the residual risk rating is the level of risk after applying the controls or measures. The project cost is the amount of resources required to implement the project. These three factors can be used to determine the relative positions of the projects on a risk map, which is a graphical tool for displaying the risks based on their impact and likelihood. The risk map can help to prioritize and compare the risks, and to select the most appropriate risk response strategy. The other options are not the best answers, as they are not directly shown or derived from the risk scenario chart. The risk treatment options are the possible actions that can be taken to address the risks, such as accept, avoid, mitigate, or transfer. The capability of enterprise to implement is the ability of the organization to execute the risk response plan,considering the available resources, skills, and constraints. The multiple risk factors addressed by a chosen response are the various elements that contribute to or affect the risk, such as the threat sources, events, vulnerabilities, assets, and impacts. These factors are not explicitly stated or measured in the risk scenario chart, and may require further analysis or information. References = How to Write Strong Risk Scenarios and Statements - ISACA; Identifying the Right Risk Scenarios to Measure with FAIR; How to write good risk scenarios and statements

Unauthorized modification of data by a database administrator is a security risk that involves altering, deleting, or inserting data on a database without proper authorization or approval, by a person who has privileged access to the database, such as a database administrator12.

The best control to detect unauthorized modification of data by a database administrator is to review database activity logs, which are records that capture and store the details and history of the transactions or activities that are performed on the database, such as who, what, when, where, and how34.

Reviewing database activity logs is the best control because it provides evidence and visibility of the database operations, and enables the detection and reporting of any deviations, anomalies, or issues that may indicate unauthorized modification of data by a database administrator34.

Reviewing database activity logs is also the best control because it supports the accountability and auditability of the database operations, and facilitates the investigation and resolution of any unauthorized modification of data by a database administrator34.

The other options are not the best controls, but rather possible measures or techniques that may supplement or enhance the review of database activity logs. For example:

Reviewing database access rights is a measure that involves verifying and validating the permissions and privileges that are granted or revoked to the users or roles who can access or modify the data on the database56. However, this measure is not the best control because it does not directly detect unauthorized modification of data by a database administrator, especially if the database administrator has legitimate access rights to the data56.

Comparing data to input records is a technique that involves matching and reconciling the data on the database with the original or source data that are entered or imported into the database, and identifying and correcting any discrepancies or errors78. However, this technique is not the best control because it does not directly detect unauthorized modification of data by a database administrator, especially if the input records are also modified or compromised78.

Reviewing changes to edit checks is a technique that involves examining and evaluating the modifications or updates to the edit checks, which are rules or validations that are applied to the data on the database to ensure their accuracy, completeness, andconsistency9 . However, this technique is not the best control because it does not directly detect unauthorized modification of data by a database administrator, especially if the edit checks are bypassed or disabled9 . References =

1: Database Security: Attacks and Solutions | SpringerLink2

2: Unauthorised Modification of Data With Intent to Cause Impairment3

3: Database Activity Monitoring - Wikipedia4

4: Database Activity Monitoring (DAM) | Imperva5

5: Database Access Control - Wikipedia6

6: Database Access Control: Best Practices for Database Security7

7: Data Reconciliation - Wikipedia8

8: Data Reconciliation and Gross Error Detection9

9: Edit Check - Wikipedia

Edit Checks: A Data Quality Tool

According to the Section 4: Quiz 40 - Business Continuity Plan Flashcards, the best indication of the effectiveness of a business continuity program is the successful performance of business continuity tests and the resolution of any issues that arise. Business continuity tests are exercises that simulate various scenarios of disruption or disaster and evaluate the organization’s ability to recover and resume its critical functions. Business continuity tests can help to validate the assumptions, objectives, and strategies of the business continuity program, as well as to identify and address any gaps, weaknesses, or errors in the business continuity and disaster recovery plans. By performing business continuity tests regularly and effectively, the organization can ensure that its business continuity program is aligned with its needs andexpectations, and that it can cope with any potential crisis. References = Section 4: Quiz 40 - Business Continuity Plan Flashcards

 The most important element of a successful risk awareness training program is customizing content for the audience, because this ensures that the training is relevant, engaging, and effective for the learners. Customizing content for the audience means tailoring the training materials and methods to suit the specific needs, preferences, and characteristics of the target group, such as their roles, responsibilities, knowledge, skills, attitudes, and learning styles. Customizing content for the audience can help to achieve the following benefits:

Increase the motivation and interest of the learners, as they can see the value and applicability of the training to their work and goals.

Enhance the comprehension and retention of the learners, as they can relate the training content to their prior knowledge and experience, and use examples and scenarios that are familiar and realistic to them.

Improve the transfer and application of the learners, as they can practice and apply the training content to their actual work situations and challenges, and receive feedback and support that are relevant and useful to them. References = Implementing risk management training and awareness (part 1) 1

 Check totals are IT controls that verify the accuracy and completeness of data by comparing the sum or count of data records or data fields with a predetermined or expected value. Check totals can help detect and prevent errors, omissions, or alterations in data entry, processing, or transmission. Check totals can also help identify and correct data discrepancies or anomalies. Therefore, check totals are the most useful IT controls in mitigating the risk associated with inaccurate data. The other options are not the best answers because they do not directly address the risk of inaccurate data. Encrypted storage of data is an IT control that protects the confidentiality and integrity of data by preventing unauthorized access or modification. However, encryption does not ensure the accuracy or validity of the data itself. Links to source data are IT controls that provide traceability and transparency of data by allowing users to access or view the original data from which the derived or aggregated data is obtained. However, links to source data do not verify or correct the data quality or consistency. Audit trails for updates and deletions are IT controls that record thehistory and changes of data by capturing the date, time, user, and action performed on the data. Audit trails can help monitor and review the data activities and transactions, but they do not prevent or detect the data errors or inaccuracies. References = CRISC Review Manual, pages 164-1651; CRISC Review Questions, Answers & Explanations Manual, page 722

A vulnerability assessment is a process of identifying and evaluating the weaknesses or gaps in an application that may expose it to potential threats or attacks.

When vulnerability assessment results identify a weakness in an application, the first thing that a risk practitioner should do is to assess the risk to determine mitigation needed. This means that the risk practitioner should analyze the likelihood and impact of the weakness being exploited, the existing controls that are in place to prevent or reduce the exploitation, and the residual risk that remains after applying the controls.

Assessing the risk to determine mitigation needed helps to prioritize the actions that are required to address the weakness, such as implementing new or additional controls, accepting the risk, transferring the risk, or avoiding the risk.

The other options are not the first things that a risk practitioner should do when vulnerability assessment results identify a weakness in an application. They are either secondary or not essential for risk management.

The references for this answer are:

Risk IT Framework, page 18

Information Technology & Security, page 12

Risk Scenarios Starter Pack, page 10

The potential impact of events is the estimated magnitude and likelihood of the consequences that may result from a risk scenario. The potential impact of events can help key stakeholders understand the severity and urgency of the risk, and prioritize the appropriate response actions. The potential impact of events can be expressed in quantitative or qualitative terms, such as financial loss, operational disruption, reputational damage, legal liability, etc. The potential impact of events is the most important information to include when reporting on an increasing trend of ransomware attacks in the industry, as it can help stakeholders assess the level of risk exposure and the adequacy of the existing controls. References = Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Assessment, Section 2.3: Risk Analysis, p. 87-89.

According to the CRISC Review Manual (Digital Version), reviewing the business impact analysis (BIA) will best help an organization select a recovery strategy for critical systems, as it provides an assessment of the potential impact and consequences of a disruption to the organization’s critical business functions and processes. Reviewing the BIA helps to:

Identify and prioritize the critical systems and their dependencies that support the critical business functions and processes

Estimate the maximum tolerable downtime (MTD) and the recovery time objective (RTO) for each critical system

Evaluate the feasibility and cost-effectiveness of various recovery strategies and options for each critical system

Select the most appropriate recovery strategy and option for each critical system based on the organization’s objectives and requirements

Develop and implement the recovery plan and procedures for each critical system

References = CRISC Review Manual (Digital Version), Chapter 3: IT Risk Response, Section 3.3: Risk Response Options, pp. 174-1751

According to the CRISC Review Manual1, controls are the policies, procedures, practices, and organizational structures that are designed and implemented to manage risk. The most important factor when defining controls is to align them with the business objectives, as this helps to ensure that the controls support the achievement of the organization’s strategy, goals, and values. Aligning controls with business objectives also helps to optimize the benefits and costs of controls, and to prioritize and allocate resources for control implementation and maintenance. References = CRISC Review Manual1, page 202.

 According to the CRISC Review Manual (Digital Version), the business significance of the information is the most important criterion when developing a response to an attack that would compromise data, as it determines the impact and severity of the attack on the organization’s objectives and performance. The business significance of the information helps to:

Assess the value and sensitivity of the data that is compromised or at risk of compromise

Evaluate the potential losses or damages that the organization may incur due to the data compromise

Prioritize the data recovery and restoration activities based on the criticality and urgency of the data

Communicate and coordinate the data breach response and notification with the relevant stakeholders, such as the data owners, the customers, the regulators, and the media

Enhance the data protection and security measures to prevent or mitigate future data compromise incidents

References = CRISC Review Manual (Digital Version), Chapter 3: IT Risk Response, Section 3.3: Risk Response Options, pp. 174-1751

 The best answer is D. Organizational policy. An organizational policy is a set of rules and guidelines that defines how the organization operates and conducts its activities. An organizational policy should direct how the employee monitoring system is used, because it can specify the purpose, scope, methods, and limitations of the monitoring, as well as the roles and responsibilities of the parties involved, the data protection and privacy measures, and the consequences of non-compliance. An organizational policy can also help to ensure that the employee monitoring system is aligned with the organization’s objectives, values, and culture, and that it complies with the relevant laws and regulations. The other options are not the best answer, although they may be related or influential to the organizational policy. Organizational strategy is a plan of action that outlines the organization’s vision, mission, goals, and initiatives, but it does not provide the details or the rules of how the employee monitoring system is used. Employee code of conduct is a document that describes the expected behavior and ethics of the employees, but it does not address the specific aspects or the procedures of the employee monitoring system. Industry best practices are the proven methods and standards that are adopted by the leading organizations in a specific field or sector, but they may not be applicable or suitable for every organization or situation. References = Workplace Monitoring Policy Template - CurrentWare, The All-In-One Guide to Employee Monitoring - G2

A risk practitioner notices a trend of noncompliance with an IT-related control. This indicates that there is a risk of ineffective or inefficient implementation or operation of the control, which may expose the organization to potential threats or losses.

The best way to assist in making a recommendation to management is to assess the degree to which the control hinders business objectives. This means that the risk practitioner should analyze the impact of the control on the performance, productivity, quality, or customer satisfaction of the business processes or functions that are affected by the control.

Assessing the degree to which the control hinders business objectives helps to identify the root causes of noncompliance, the costs and benefits of compliance, and the potential alternatives or improvements for the control. It also helps to communicate the value and importance of the control to the management and the stakeholders, and to obtain their support and commitment for the control compliance.

The other options are not the best ways to assist in making a recommendation to management. They are either secondary or not essential for control compliance.

The references for this answer are:

Risk IT Framework, page 19

Information Technology & Security, page 13

Risk Scenarios Starter Pack, page 11

 A detective control is a type of internal control that seeks to uncover problems in a company’s processes once they have occurred. Examples of detective controls include physical inventory checks, reviews of account reports and reconciliations, as well as assessments of current controls1. A periodic access review is a detective control that involves verifying the access rights and privileges of users to ensure that they are appropriate and authorized. A periodic access review can help to detect any unauthorized or inappropriate access, such as excessive or redundant permissions, segregation of duties violations, or dormant ororphaned accounts23. The other options are not detective controls, but rather preventive controls, which are designed to prevent errors or fraud from occurring in the first place. A limit check is a preventive control that validates the input data against a predefined range or limit, and rejects any data that falls outside the acceptable range4. Access control software is a preventive control that restricts the access to information systems or resources based on the identity, role, or credentials of the user5. Rerun procedures are preventive controls that ensure the accuracy and completeness of data processing by repeating the same process and comparing the results6. References = Detective Control: Definition, Examples, Vs. Preventive Control; Detective Control - What Is It, Examples, Vs Preventive Control; Limit Check - an overview |ScienceDirect Topics; Access Control Software - an overview | ScienceDirect Topics; Rerun Procedures - an overview | ScienceDirect Topics

A risk heat map is a graphical tool that displays the level of risk for each risk area based on the impact and likelihood of occurrence. It also provides a summary of the risk assessment results, such as the number and severity of risks, the risk appetite and tolerance, and the risk response strategies. A risk heat map can help senior management to understand the risk profile of the organization, prioritize the risks that need attention, and allocate resources accordingly. A risk heat map is more effective than the other options because it can communicate complex information in a simple and visual way, and it can highlight the key risk areas and trends. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.4.2, page 97.

According to the CRISC 351-400 topic3 Flashcards, the administrative access represents a segregation of duties conflict, which should be of greatest concern to a risk practitioner. Segregation of duties is a principle that aims to prevent fraud, errors, or abuse of power by ensuring that no single person can perform incompatible functions, such as development, testing, and production. By having administrative access to a production application, a software developer can potentially modify the code, bypass the testing and approval process, and deploy the changes without proper authorization or documentation. This can compromise the integrity, availability, and security of the application, and expose the organization to operational, financial, legal, or reputational risks. Therefore, the answer is D. The administrative access represents a segregation of duties conflict. *References

According to the CRISC Review Manual (Digital Version), the most important consideration when sharing risk management updates with executive management is ensuring relevance to organizational goals, as this helps to align risk management with business strategy and performance. The risk management updates should:

Highlight the key risks that may affect the achievement of the organizational goals and objectives

Demonstrate the value and benefits of risk management in supporting decision making and enhancing business resilience

Provide clear and concise information on the current risk profile, risk appetite, risk tolerance and risk exposure of the organization

Recommend appropriate risk response actions and resource allocation to address the identified risks

Communicate the roles and responsibilities of executive management in overseeing and governing risk management

References = CRISC Review Manual (Digital Version), Chapter 4: IT Risk Monitoring and Reporting, Section 4.2: IT Risk Reporting, pp. 221-2221

The first thing that a risk practitioner should do upon learning that a risk treatment owner has implemented a different control than what was specified in the IT risk action plan is to reassess the risk level associated with the new control. This is because the new control may have a different effect on the likelihood and impact of the risk, and may introduce new risks or modify existing ones. The risk practitioner should evaluate the adequacy and effectiveness of the new control, and compare the residual risk with the risk appetite and tolerance of the organization. The risk practitioner should also communicate the results of the risk reassessment to the relevant stakeholders, and update the risk register and action plan accordingly. The other options are not the first things that a risk practitioner should do, although they may be necessary or appropriate at a later stage. Seeking approval from the control owner is important, but it does not address the potential changes in the risk level or the alignment with the risk management objectives. Updating the action plan in the risk register is a good practice, but it should be done after the risk reassessment and with the consent of the risk owner. Validating that the control has an established testing method is a part of the control assurance process, but it does not provide information on the risk level or the risk response effectiveness. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk Response, page 151.

 A key outcome of risk ownership is that risk responsibilities are addressed, as this means that the risk owner has the authority and accountability to manage the risk, and that the roles and expectations of the other stakeholders are clearly defined and agreed upon. Risk ownership is the process of assigning a person or entity with the responsibility to manage a particular risk. Risk ownership helps to ensure that the risk is properly identified, assessed, and treated, and that the risk status and performance are monitored and reported. The other options are not key outcomes of risk ownership, although they may be related or beneficial aspects of it. Risk-related information is communicated is an outcome of risk reporting, which is a part of risk monitoring and control. Risk-oriented tasks are defined is an outcome of risk response planning, which is a part of risk treatment. Business process risk is analyzed is an outcome of risk assessment, which is a part of risk identification and analysis. References = Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Identification, page 47.

According to the CRISC Review Manual1, vendor risk mitigation action items are the specific tasks and activities that are assigned to the vendors or the organization to address the identified risks and implementthe risk responses. The percentage of vendor risk mitigation action items completed on time is the best key performance indicator (KPI) to measure the effectiveness of a vendor risk management program, as it helps to evaluate the timeliness and quality of the vendor performance, the alignment of the vendor activities with the organization’s risk appetite and objectives, and the achievement of the expected outcomes and benefits of the risk responses. The percentage of vendor risk mitigation action items completed on time also helps to identify and resolve any issues or gaps in the vendor risk management process, and to improve the vendor relationship and communication. References = CRISC Review Manual1, page 230.

 The chief information officer (CIO) is the most likely person to be responsible for the coordination between the IT risk strategy and the business risk strategy, because the CIO is the senior executive who oversees the information technology (IT) function and aligns it with the organization’s strategy, objectives, and operations. The CIO is also responsible for ensuring that the IT function delivers value, supports innovation, and manages IT risks effectively and efficiently. The CIO can coordinate the IT risk strategy and the business risk strategy by communicating and collaborating with other business leaders, establishing and implementing IT governance frameworks and policies, and monitoring and reporting on IT performance and risk indicators. The other options are not as likely as the CIO to be responsible for the coordination between the IT risk strategy and the business risk strategy, because they have different or limited roles and responsibilities in relation to IT and business risk management, as explained below:

A. Chief financial officer (CFO) is the senior executive who oversees the financial function and manages the financial risks of the organization. The CFO may be involved in the coordination between the IT risk strategy and the business risk strategy, especially when it comes to budgeting, funding, or reporting on IT-related projects and initiatives, but the CFO is not the primary person who oversees the IT function and aligns it with the organization’s strategy and objectives.

B. Information security director is the senior manager who oversees the information security function and manages the information security risks of the organization. The information security director may be involved in the coordination between the IT risk strategy and the business risk strategy, especially when it comes to protecting the confidentiality, integrity, and availability of the information assets and systems, but the information security director is not the primary person who oversees the IT function and aligns it with the organization’s strategy and objectives.

C. Internal audit director is the senior manager who oversees the internal audit function and provides independent assurance on the effectiveness and efficiency of the organization’s governance, risk management, and control processes. The internal audit director may be involved in the coordination between the IT risk strategy and the business risk strategy, especially when it comes to auditing, reviewing, or testing the IT-related processes and controls, but the internal audit director is not the primary person who oversees the IT function and aligns it with the organization’s strategy and objectives. References = Risk and Information Systems Control Study Manual, Chapter 1, Section 1.1.1, page 7. The Strategic CIO: Balancing Business and IT Priorities, Technology’s Role in Enterprise Risk Management, Aligning Enterprise Cyber Risk and Business Strategy

 Scenario analysis is a technique that helps to identify significant events that could impact an organization by creating and exploring plausible alternative futures. Scenario analysis can help anticipate and prepare for potential changes, opportunities, or threats in the internal or external environment, such as technological, economic, social, political, legal, or environmental factors. Scenario analysis can also help evaluate the impact and likelihood of different risk scenarios, and test the effectiveness and robustness of various risk response strategies. Scenario analysis can provide a comprehensive and holistic view of risks and their interrelationships, and support the decision making and planning process for risk management. References = Risk and Information Systems Control Study Manual, Chapter 1: IT Risk Identification, Section 1.4: IT Risk Scenarios, p. 49-50.

The risk practitioner’s primary role during the change is to manage the third-party risk, as this involves identifying, assessing, and mitigating the risks associated with outsourcing the business operations for the emerging technology. The risk practitioner should ensure that the third-party provider has the necessary capabilities, security, and compliance to deliver the expected outcomes and meet the contractual obligations. The risk practitioner should also monitor the performance and service levels of the third-party provider and report any issues or incidents. Developing risk scenarios, managing the threat landscape, and updating risk appetite are all important activities for the risk practitioner, but they are not the primary role during the change. Developing risk scenarios is a technique for identifying and analyzing potential risk events and their impacts. Managing the threat landscape is a process of identifying and responding to the external and internal threats that may affect the organization. Updating risk appetite is a decision that reflects the organization’s willingness to accept or avoid risk in pursuit of its objectives. References = Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Identification, page 48.

The greatest concern for a risk practitioner reviewing current key risk indicators (KRIs) is that the KRIs’ source data lacks integrity, as this means that the data is inaccurate, incomplete, inconsistent, or outdated, and therefore cannot provide reliable and valid information on the risk level and performance. The KRIs are metrics that measure and monitor the changes in the risk exposure and the effectiveness of the risk response over time. The KRIs’ source data should be collected and verified from credible and relevant sources, and should be updated and maintained regularly. The KRIs’ source data should also be aligned and integrated with the enterprise’s data governance and quality standards. The other options are not the greatest concerns for a risk practitioner reviewing current key risk indicators (KRIs), although they may pose some challenges or limitations. The KRIs are not automated is a concern for the efficiency and timeliness of the KRI reporting and analysis, but it does not affect the integrity of the KRI source data. The KRIs are not quantitative is a concern for the objectivity and comparability of the KRI measurement and prioritization, but it does not affect the integrity of the KRI source data. The KRIs do not allow for trend analysis is a concern for the usefulness and relevance of the KRI communication and decision making, but it does not affect the integrity of the KRI source data. References = Risk and Information Systems Control Study Manual, Chapter 5: Risk and Control Monitoring and Reporting, page 183.

The best way to provide assurance of the effectiveness of vendor security controls is to require independent control assessments. Independent control assessments are evaluations of the vendor’s security controls by a third-party auditor or assessor, such as an external auditor, a certification body, or a testing laboratory. Independent control assessments provide an objective and unbiased opinion on the adequacy and performance of the vendor’s security controls, as well as the compliance with relevant standards and regulations. Independent control assessments can also provide evidence and assurance to the customers of the vendor’s security posture and capabilities. Reviewing vendor control self-assessments (CSA), vendor service level agreement (SLA) metrics, or vendor references from existing customers are not as reliable or credible as independent control assessments, because they may be biased, incomplete, or outdated.

The result of a significant increase in the motivation of a malicious threat actor would be an increase in risk event likelihood. The likelihood of a risk event is influenced by the factors of threat, vulnerability, and exposure. The motivation of a threat actor is a key component of the threat factor, as it reflects the intent and capability of the actor to exploit a vulnerability. Therefore, a higher motivation would imply a higher probability of an attack. An increase in mitigating control costs, risk event impact, or cybersecurity premium are possible consequences of a risk event, but they are not directly affected by the motivation of the threat actor. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 6; CRISC Review Manual, 6th Edition, page 67.

The best key performance indicator (KPI) to measure the effectiveness of the security patching process is the percentage of patches installed successfully within the expected time frame. This KPI can help to evaluate how well the security patching process meets the predefined objectives and standards, and how timely the patches are applied to reduce the risk exposure. The percentage of patches installed by the security administration team, successfully during the first attempt, or without causing an unplanned system outage are other possible KPIs, but they are not as relevant as the percentage of patches installed successfully within the expected time frame. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 7; CRISC Review Manual, 6th Edition, page 202.

Information asset classification is the process of assigning a level of sensitivity and criticality to an information asset based on its value, importance, and impact to the organization. The major reason to classify information assets is to determine their sensitivity and criticality, which are the measures of how confidential, proprietary, or sensitive the information is, and how essential, urgent, or time-sensitive the information is for the business operations. By determining the sensitivity and criticality of information assets, the organization can prioritize the protection and recovery of the information assets, implement the appropriate security controls and safeguards, comply with the regulatory and contractual requirements, and manage the information lifecycle and disposal. References = CRISC Review Manual, 7th Edition, page 74.

The most comprehensive information for developing a risk profile for a system is the risk assessment results. A risk assessment is a process that identifies, analyzes, and evaluates the risks that could affect the system’s objectives or operations. A risk assessment provides comprehensive information for developing a risk profile, because it helps to determine the likelihood and impact of the risks, and to prioritize them based on their severity and relevance. A risk assessment also helps to select the most appropriate and effective controls to minimize the risks, such as avoiding, reducing, transferring, or accepting the risks. A risk profile is a document that summarizes the key risks that the system faces or accepts, and their likelihood, impact, and priority. A risk profile helps to identify and prioritize the most critical or relevant risks, and to align them with the system’s objectives, strategy, and risk appetite. The other options are not as comprehensive as the risk assessment results, although they may be part of or derived from the risk profile. Results of a business impact analysis (BIA), a mapping of resources to business processes, and key performance indicators (KPIs) are all factors that could affect the system’s performance and improvement, but they do not necessarily identify, analyze, or evaluate the risks that could affect the system. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.2.1, page 4-13.

The most helpful factor to align when defining thresholds for control key performance indicators (KPIs) is the control performance with the risk tolerance of business owners. Control KPIs are metrics that measurethe effectiveness and efficiency of the controls that are implemented to mitigate the risks. By aligning the control performance with the risk tolerance of business owners, the thresholds for control KPIs can reflect the acceptable level of risk and the desired level of control for the business processes and objectives. Information risk assessments with enterprise risk assessments, key risk indicators (KRIs) with risk appetite of the business, and control KPIs with audit findings are other possible factors to align, but they are not as helpful as control performance with risk tolerance of business owners. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 12; CRISC Review Manual, 6th Edition, page 215.

 The best control to help reduce the risk of fraudulent internal transactions in several business applications is the segregation of duties. Segregation of duties is the principle of dividing the roles and responsibilities of different individuals or groups involved in a business process or an IT service, so that no one person or group has complete control over the entire process or service. Segregation of duties can help to prevent or detect fraud, errors, conflicts of interest, or misuse of resources, by ensuring that there are checks and balances, and that there is adequate oversight and accountability. Segregation of duties can also help to reduce the risk of collusion, compromise, or coercion among the internal staff, by limiting their access and authority to the business applications and data. Periodic user privileges review, log monitoring, and periodic internal audits are also useful controls, but they are not as effective as segregation of duties, as they are reactive and detective measures, rather than proactive and preventive measures. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 217.

The risk register is a document that records the identified risks, their analysis, and their responses. It is a useful tool for monitoring and controlling the risks throughout the project lifecycle. However, the risk register is not a static document and it should be updated regularly to reflect the changes in the risk environment and the project status. Therefore, when reviewing the risk register, a risk practitioner should not only look at the risk ratings, but also the assumptions and the rationale behind them. Different business units may have different perspectives, contexts, and data sources for the same risk scenario, which can result in significant variances in inherent risk. Inherent risk is the risk level before considering the existing controls or responses. Therefore, the best course of action is to review the assumptions of both risk scenarios to determine whether the variance is reasonable or not. This can help to identify any errors, inconsistencies, or biases in the risk assessment process, and to ensure that the risk register reflects the current and accurate state of the risks. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.2.1, p. 106-107

Lack of organizational policy regarding open source software should be the greatest concern for an organization that uses open source software applications, as it may expose the organization to legal, security, and operational risks. Open source software is software that is freely available and can be modified and distributed by anyone, subject to certain conditions and licenses. An organizational policy regarding open source software should define the criteria and procedures for selecting, acquiring, using, and maintaining open source software, as well as the roles and responsibilities of the stakeholders involved. Lack of reliability, lack of monitoring, and lack of professional support are not the greatest concerns, as they can be addressed by implementing quality assurance, configuration management, and community engagement practices for open source software. References = CRISC by Isaca Actual Free Exam Q&As, question 214; CRISC: Certified in Risk & Information Systems Control Sample Questions, question 214.

Residual system access is the risk that the customer service representatives who are transferred to the sales department may still have access to the systems or applications that they used in their previous role, which may not be relevant or authorized for their new role.

The access control manager is the person or function who is responsible for defining, implementing, and maintaining the policies and procedures for granting, modifying, reviewing, and revoking access rights to the systems or applications, based on the principle of least privilege and the segregation of duties.

The access control manager is responsible for mitigating the risk associated with residual system access, by ensuring that the access rights of the customer service representatives are updated or removed according to their new role and responsibilities, and that the access changes are documented and approved by the appropriate authorities.

The other options are not responsible for mitigating the risk associated with residual system access. They are either irrelevant or less effective than the access control manager.

The references for this answer are:

Risk IT Framework, page 26

Information Technology & Security, page 20

Risk Scenarios Starter Pack, page 18

The primary concern for an organization planning to transfer and store its customer data with an offshore cloud service provider is data privacy. Data privacy is the protection of personal information fromunauthorized or unlawful access, use, disclosure, or transfer. Data privacy is governed by various laws, regulations, and standards that vary across different jurisdictions and sectors. An organization that transfers and stores its customer data with an offshore cloud service provider should ensure that the data privacy rights and obligations of the customers, the organization, and the cloud service provider are clearly defined and agreed upon, and that the data is protected according to the applicable data privacy requirements. An organization should also conduct due diligence and risk assessment on the offshore cloud service provider, and monitor and audit its performance and compliance on a regular basis. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 3, Section 3.2.1, page 127123

Risk tolerance is the amount and type of risk that an organization is willing to accept in pursuit of its objectives. Risk tolerance is an important component of the corporate risk profile, as it defines the boundaries and limits of the acceptable risk exposure for the organization. Comparing the risk tolerance against the corporate risk profile can help to ensure that the organization’s risk strategy and objectives are aligned with its risk appetite and capacity, and that the organization is not taking on more risk than it can handle or afford. Comparing the risk tolerance against the corporate risk profile can also help to monitor and adjust the risk management process and controls, and to optimize the risk-return trade-off. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, Question 249. CRISC: Certified in Risk & Information Systems Control Sample Questions, Question 249. CRISC Sample Questions 2024, Question 249. CRISC by Isaca Actual Free Exam Q&As, Question 9.

A noncompliant control is a control that does not meet the requirements or standards of an audit, regulation, or policy. A noncompliant control can expose the organization to risks such as errors, fraud, or breaches. When a noncompliant control is identified, the service provider and the client should work together to resolve the issue as soon as possible. However, sometimes the resolution may not be feasible or cost-effective, and the client may decide to accept the risk associated with the noncompliant control.

In this case, the service provider’s most appropriate action would be to ask the client to document the formal risk acceptance for the provider. This means that the client should acknowledge the existence and consequences of the noncompliant control, and provide a written justification for accepting the risk. The risk acceptance document should also specify the roles and responsibilities of the service provider and the client, and the duration and conditions of the risk acceptance. The risk acceptance document should be signed by the client’s senior management and the service provider’s management, and kept as part of the audit evidence.

The other options are not appropriate actions for the service provider. Developing a risk remediation plan overriding the client’s decision would be disrespectful and unprofessional, as it would ignore the client’s authority and preference. Making a note for this item in the next audit explaining the situation would be insufficient and misleading, as it would imply that the issue is still unresolved and that the service provider is responsible for it. Insisting that the remediation occur for the benefit of other customers would be unreasonable and impractical, as it would disregard the client’s business needs and constraints, and potentially harm the relationship between the service provider and the client. References =

Risk Acceptance - Institute of Internal Auditors

New Guidance on the Evaluation of Non-compliance with the Risk Assessment Standard and its Peer Review Impact - REVISED

The Impact of Non-compliance: Understanding The Risks And Consequences

 Anonymizing personal data in non-production environments means replacing the real data with fictitious but realistic data that does not allow identification of the individuals. This is a good way to mitigate the risk of sensitive personal data leakage from a software development environment, as it reduces the exposure of the data to unauthorized access or misuse. Tokenizing personal data only in test environments is not sufficient, as the data may still be exposed in other non-production environments, such as development or staging. Data loss prevention tools (DLP) installed in passive mode may detect and report data leakage incidents, but they do not prevent them from happening. Multi-factor authentication for access to non-production environments may enhance the security of the access, but it does not protect the data from being leaked by authorized users or compromised by other means. References = CRISC Review Manual (Digital Version), page 226; CRISC Review Questions, Answers & Explanations Database, question 195.

New regulatory requirements impacting IT are those that impose new obligations, restrictions, or standards on how an organization uses, manages, or secures its IT systems, data, or services1. Examples of such regulations include the GDPR, the CCPA, the HIPAA, or the PCI-DSS2. New regulatory requirements impacting IT can pose significant challenges and risks for an organization, such as:

Compliance costs and efforts, such as updating policies, procedures, and systems, training staff, or hiring experts

Noncompliance penalties and consequences, such as fines, lawsuits, sanctions, or reputational damages

Operational disruptions or inefficiencies, such as system changes, data migrations, or service interruptions

Competitive disadvantages or opportunities, such as losing or gaining customers, partners, or markets3

The first step that should be done when a company is made aware of new regulatory requirements impacting IT is to review the risk tolerance and appetite. Risk tolerance is the acceptable level of variation that an organization is willing to accept around its risk appetite. Risk appetite is the amount and type of risk that an organization is willing to take in order to meet its strategic objectives. By reviewing the risk tolerance and appetite, the company can:

Establish a clear and consistent understanding of the organization’s goals, values, and expectations regarding the new regulatory requirements impacting IT

Assess the current and potential impacts of the new regulatory requirements impacting IT on the organization’s performance, operations, or assets

Determine the level of risk exposure and acceptance that the organization is comfortable with, and identify the risk thresholds or limits that should not be exceeded

Align the risk management strategies and actions with the organization’s risk tolerance and appetite, and prioritize the most critical and urgent risks to be addressed

Communicate and report the risk tolerance and appetite to the stakeholders and regulators, and ensure transparency and accountability

References = Regulating emerging technology | Deloitte Insights, Ten Key Regulatory Challenges of 2024 - kpmg.com, The Risks of Non-Compliance with Data Protection Laws, [Risk Tolerance - COSO], [Risk Appetite - COSO], [Risk Appetite and Tolerance - IRM]

The organization’s process owner should own the risk of exposing the payroll data due to a control weakness at the third party, because the process owner is the person who is responsible for the business process that generates, uses, or transfers the payroll data. The process owner should also ensure that the third party complies with the contractual obligations and service level agreements that define the expected performance and security standards of the payroll data processing. The other options are not the correct answers, because they are not the primary owners of the risk, although they may also be involved in the risk management process. The third party’s IT operations manager, the third party’s chief risk officer (CRO), and the organization’s risk practitioner are examples of secondary owners or stakeholders of the risk, who may provide support, guidance, or oversight to the risk owner, but they are not accountable for the risk or the risk response strategy. References = CRISC: Certified in Risk & Information Systems Control Sample Questions

Determining if organizational risk is tolerable requires understanding the organization’s risk appetite, which is the amount and type of risk that the organization is willing to accept or pursue in order to achieve its objectives1. Understanding the organization’s risk appetite can help to:

Define and communicate the risk tolerance, which is the acceptable or unacceptable level of risk for each risk category or scenario2.

Guide and align the risk identification, analysis, evaluation, and treatment processes, and ensure that the risks are consistent and proportional to the risk appetite3.

Measure and monitor the risk performance and outcome, and ensure that the residual risk (the risk that remains after the risk responses) is within the risk appetite, or take corrective actions if needed4.

The other options are not the best ways to determine if organizational risk is tolerable, because:

Mapping residual risk with cost of controls is a useful but not sufficient way to determine if organizational risk is tolerable, as it provides a quantitative analysis of the trade-off between the risk level and the risk response cost5. However, mapping residual risk with cost of controls does not consider the qualitative aspects of the risk, such as the impact on the organization’s strategy, culture, or reputation.

Comparing against regulatory requirements is a necessary but not sufficient way to determine if organizational risk is tolerable, as it ensures that the organization complies with the applicable laws, rules, or standards that govern its activities and operations6. However, comparing against regulatory requirements does not guarantee that the organization meets its own objectives and expectations, which may be higher or lower than the regulatory requirements.

Comparing industry risk appetite with the organization’s risk appetite is a helpful but not sufficient way to determine if organizational risk is tolerable, as it provides a reference or a standard for benchmarking the organization’s risk level and performance with its peers or competitors7. However, comparing industry risk appetite with the organization’s risk appetite does not ensure that the organization addresses its specific or unique risks, which may differ from the industry risks.

References =

Risk Appetite - CIO Wiki

Risk Tolerance - CIO Wiki

Risk Management Process - CIO Wiki

Risk Monitoring - CIO Wiki

Residual Risk - CIO Wiki

Regulatory Compliance - CIO Wiki

Benchmarking - CIO Wiki

Risk and Information Systems Control documents and learning resources by ISACA

 Risk monitoring is the process of tracking and evaluating the performance and effectiveness of the risk management process and controls, and identifying any changes or emerging risks that may affect theenterprise’s objectives and strategy. The primary benefit of risk monitoring is that it facilitates risk-aware decision making, as it provides timely and relevant information and feedback to the decision-makers and stakeholders, and enables them to adjust the risk strategy and response actions accordingly. Risk monitoring also helps to ensure that the risk management process is aligned with the enterprise’s risk appetite and tolerance, and supports the achievement of the enterprise’s goals and value creation. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, Question 239. CRISC: Certified in Risk & Information Systems Control Sample Questions, Question 239. CRISC Sample Questions 2024, Question 239.

The IT control environment is the set of standards, processes, and structures that provide the basis for carrying out IT internal control across the organization1. The IT control environment comprises the IT governance, IT policies and procedures, IT organizational structure, IT roles and responsibilities, IT competencies and training, and IT culture and ethics2. The effectiveness of the IT control environment can be measured by how well it supports the achievement of the organization’s IT objectives, such as IT reliability, security, compliance, and performance3.

One of the best ways to provide the most up-to-date information about the effectiveness of the organization’s overall IT control environment is to perform periodic penetration testing. Penetration testing is the process of simulating real-world cyberattacks on the organization’s IT systems, networks, and applications, to identify and exploit any vulnerabilities, weaknesses, or gaps in the IT control environment4. Penetration testing can help to:

Evaluate the current state and maturity of the IT control environment and its alignment with the organization’s risk appetite and tolerance

Detect and prioritize the most critical and urgent IT risks and threats that may compromise the organization’s IT objectives or assets

Test and validate the effectiveness and efficiency of the existing IT controls and their ability to prevent, detect, or respond to cyberattacks

Provide recommendations and feedback for improving the IT control environment and enhancing the IT security posture and resilience of the organization

References = COSO – Control Environment - Deloitte, How to use COSO to assess IT controls - Journal of Accountancy, What is Penetration Testing?, [Penetration Testing: A Guide for Business Leaders]

 Cost-benefit analysis is the most helpful tool to show risk reduction based on when developing risk treatment alternatives for a business case, because it compares the expected costs and benefits of each alternative and helps to select the most optimal and feasible one. Cost-benefit analysis also helps to justify the investment and resources required for the risk treatment plan and to demonstrate the value and return of the risk reduction. The other options are not the most helpful tools, although they may also be considered when developing risk treatment alternatives. Risk appetite, regulatory guidelines, and control efficiency are examples of factors or criteria that influence the selection of risk treatment alternatives, but they do not show the risk reduction based on the alternatives. References = CRISC: Certified in Risk & Information Systems Control Sample Questions

 A vulnerability is a weakness or flaw that can be exploited by a threat to cause harm or damage to an asset. Employees holding the door open for others, so that trailing employees do not have to stop and swipe their own ID badges, is a behavior that best represents a vulnerability, as it bypasses the security control of the ID badge system, and allows unauthorized or unauthenticated access to the premises. This behavior can increase the risk of physical or logical security breaches, such as theft, vandalism, sabotage, or espionage. References = CRISC: Certified in Risk & Information Systems Control Sample Questions, Question 258. Most Asked CRISC Exam Questions and Answers, Question 10. ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, Question 258. CRISC by Isaca Actual Free Exam Q&As, Question 9.

 IT risk scenarios are hypothetical situations that describe how IT-related events or incidents could adversely affect an organization’s objectives, assets, or operations. IT risk scenarios can help to identify, analyze, and prioritize IT risks, and to develop appropriate responses and controls1.

An enterprise-wide risk register is a document that records and tracks the significant risks that an organization faces across its various functions, processes, and activities. An enterprise-wide risk register can help to provide a comprehensive and consistent view of the organization’s risk profile, and to support the decision making and reporting of the risk management function2.

The best practice that facilitates the incorporation of IT risk scenarios into the enterprise-wide risk register is to develop IT risk scenarios in the context of organizational objectives. This means that IT risk scenarios should be aligned with and derived from the organization’s strategic goals, mission, vision, and values. IT risk scenarios should also consider the interdependencies and interactions between IT and other business domains, and the potential impact of IT risks on the organization’s performance and reputation3.

By developing IT risk scenarios in the context of organizational objectives, the organization can ensure that the IT risk scenarios are relevant, realistic, and meaningful for the enterprise-wide risk management. The organization can also ensure that the IT risk scenarios are consistent and comparable with other types of risk scenarios, such as financial, operational, or reputational risk scenarios. This can facilitate the integration and consolidation of IT risk scenarios into the enterprise-wide risk register, and enable a holistic and balanced assessment and reporting of the organization’s risks4.

The other options are not as effective as developing IT risk scenarios in the context of organizational objectives for incorporating IT risk scenarios into the enterprise-wide risk register. Developing key risk indicators (KRIs) for key IT risk scenarios can help to monitor and measure the IT risk exposure and performance, but it does not ensure that the IT risk scenarios are aligned with the organizational objectives or integrated with other risk scenarios. Assessing IT risk scenarios by the enterprise risk management team can help to validate and prioritize the IT risk scenarios, but it does not ensure that the IT risk scenarios are derived from the organizational objectives or consistent with other risk scenarios. Approving risk appetites for IT risk scenarios by key business stakeholders can help to establish the acceptable level of IT risk taking and tolerance, but it does not ensure that the IT risk scenarios are based on the organizational objectives or comparable with other risk scenarios. References =

IT Risk Scenario Development - ISACA

Risk Register - ISACA

Identifying Risks and Scenarios Threatening the Organization as an Enterprise - A New Enterprise Risk Identification Framework

Risk Register 2021-2022 - UNECE

[CRISC Review Manual, 7th Edition]

 Providing acknowledgments from receiver to sender is a control that helps to ensure that transaction data reaches its destination, as it confirms the successful delivery of the data and allows the sender to resend the data in case of failure. Securing the network from attacks, digitally signing individual messages, and encrypting data-in-transit are controls that help to ensure the integrity and confidentiality of the data, but not the availability or delivery of the data. References = CRISC by Isaca Actual Free Exam Q&As, question 199.