CTPRP Exam Dumps - Shared Assessments Third Party Risk Management Questions and Answers

Vendor inventory is a list of all the third-party vendors that an organization engages with, along with relevant information about their products, services, contracts, and risks. Vendor inventory is a crucial tool for vendor risk management, as it helps an organization identify, assess, monitor, and mitigate the potential risks associated with its vendors. Vendor inventory also helps an organization prioritize its vendor oversight activities, allocate its resources efficiently, and comply with its regulatory obligations12.

One of the key steps in creating and maintaining a vendor inventory is to assign a risk rating and a vendor classification to each vendor, based on various attributes that reflect the level of risk and criticality they pose to the organization. The risk rating and vendor classification help an organization determine the frequency and depth of its vendor due diligence, review, and audit processes, as well as the appropriate controls and remediation actions to implement3 .

Some of the common attributes used to assign risk rating and vendor classification are :

• Type of data accessed, processed, or retained: This attribute indicates the sensitivity and confidentiality of the data that the vendor handles on behalf of the organization, such as personally identifiable information (PII), protected health information (PHI), financial information, intellectual property, etc. The more sensitive and confidential the data, the higher the risk rating and vendor classification, as the vendor must comply with strict security and privacy standards and regulations, and the organization must protect itself from data breaches, leaks, or losses.
• Type of systems accessed: This attribute indicates the access level and privileges that the vendor has to the organization’s systems, such as networks, servers, databases, applications, etc. The more access and privileges the vendor has, the higher the risk rating and vendor classification, as the vendor must adhere to the organization’s policies and procedures, and the organization must safeguard itself from unauthorized or malicious activities, such as cyberattacks, sabotage, or espionage.
• Type of network connectivity: This attribute indicates the mode and frequency of the data transmission and communication between the vendor and the organization, such as online, offline, real-time, batch, etc. The more network connectivity the vendor has, the higher the risk rating and vendor classification, as the vendor must ensure the availability, integrity, and reliability of the data, and the organization must prevent data interception, modification, or disruption.

The type of contract addendum is NOT an attribute used to assign risk rating and vendor classification, as it is not directly related to the risk or criticality of the vendor. The type of contract addendum is a legal document that modifies or supplements the original contract between the vendor and the organization, such as adding or deleting terms, clauses, or provisions. The type of contract addendum may reflect the changes or updates in the vendor relationship, such as scope, duration, price, service level, etc., but it does not indicate the level of risk or impact that the vendor has on the organization. Therefore, the type of contract addendum is not a relevant factor for vendor risk assessment and management . References:

• 1: Vendor Inventory - Shared Assessments
• 2: Vendor Inventory Management: A Guide to Third-Party Risk Management
• 3: Vendor Risk Rating - Shared Assessments
• : [Vendor Risk Rating: How to Rate Your Vendors | Smartsheet]
• : [Vendor Classification - Shared Assessments]
• : [Vendor Tiering: How to Classify Your Vendors | Smartsheet]
• : Contract Addendum - Shared Assessments
• : What is a Contract Addendum? | Definition and Examples | Imperva

An Information Security Incident Management Program is a set of policies, procedures, and tools that enable an organization to prevent, detect, respond to, and recover from information security incidents. An information security incident is any event that compromises the confidentiality, integrity, or availability of information assets, systems, or services12. A formal Information Security Incident Management Program typically includes the following components12:

• The definition of internal escalation processes: This component defines the roles and responsibilities, communication channels, and reporting mechanisms for escalating and managing information security incidents within the organization. It also establishes the criteria and thresholds for determining the severity and impact of incidents, and the appropriate level of response and escalation.
• The protocols for disclosure of information to external parties: This component defines the rules and guidelines for disclosing information about information security incidents to external stakeholders, such as customers, regulators, law enforcement, media, or other third parties. It also specifies the legal and contractual obligations, the timing and frequency, the format and content, and the approval and authorization processes for disclosure.
• The mechanisms for notification to clients: This component defines the methods and procedures for notifying clients or customers who may be affected by information security incidents. It also specifies the objectives, scope, and content of notification, as well as the timing and frequency, the delivery channels, and the feedback and follow-up mechanisms.
• The processes in support of disaster recovery: This component defines the steps and actions for restoring the normal operations of the organization after a major information security incident that causes significant disruption or damage to the information assets, systems, or services. It also specifies the roles and responsibilities, the resources and tools, the backup and recovery plans, and the testing and validation procedures for disaster recovery.

The statement that reflects a requirement that is NOT typically found in a formal Information Security Incident Management Program is D. The program includes processes in support of disaster recovery. While disaster recovery is an important aspect of information security, it is not a specific component of an Information Security Incident Management Program. Rather, it is a separate program that covers the broader scope of business continuity and resilience, and may involve other types of disasters besides information security incidents, such as natural disasters, power outages, or pandemics3 . Therefore, the correct answer is D. The program includes processes in support of disaster recovery. References: 1: Computer Security Incident Handling Guide 2: Develop and Implement a Security Incident Management Program 3: Business Continuity Management vs Disaster Recovery : What is the difference between disaster recovery and security incident response?

Fourth-Nth party risk refers to the potential threats and vulnerabilities associated with the subcontractors, vendors, or service providers of an organization’s direct third-party partners12. After contract signing and on-boarding due diligence is complete, the most important type of contract provision to manage Fourth-Nth party risk is subcontractor notice and approval. This provision requires the third party to inform the organization of any subcontracting arrangements and obtain the organization’s consent before engaging any Fourth-Nth parties345. This provision enables the organization to have visibility and control over the extended network of suppliers and service providers, and to assess the potential risks and impacts of any outsourcing decisions. Subcontractor notice and approval also helps the organization to ensure that the Fourth-Nth parties comply with the same standards and expectations as the third party, and to hold the third party accountable for the performance and security of the Fourth-Nth parties345. References:

• 1: Understanding 4th- and Nth-Party Risk: What Do You Need to Know? | Mitratech
• 2: Understanding 4th- and Nth-Party Risk: What Do You Need to Know? | Mitratech Holdings, Inc - JDSupra
• 3: First, 2nd , 3rd , 4th, 5th Parties: How to Measure the Tiers of Risk
• 4: Managing 4th Party Risk with Vendor Insurance Verification - Evident ID
• 5: How to Write Fourth-Party Vendor Requirements Into the Contract - Venminder

The most important next step after receiving a vendor questionnaire is to analyze the responses and identify any gaps, issues, or risks that may pose a threat to the organization or its customers. This analysis should be based on the inherent risk profile of the vendor, the criticality of the service or product they provide, and the applicable regulatory and contractual requirements. The analysis should also highlight any adverse or high priority responses that indicate a lack of adequate controls, policies, or procedures on the vendor’s part. These responses should be prioritized for further validation, testing, or remediation. The analysis should also document any assumptions, limitations, or dependencies that may affect the accuracy or completeness of the vendor’s responses. References:

• Shared Assessments CTPRP Study Guide, Section 4.2.2, page 43
• Third-Party Risk Management: Managing Risk, Section “Assessing and monitoring third-party risk”
• What Is Third-Party Risk Management (TPRM)? 2024 Guide, Section “Third-Party Risk Management Process”

 An IT asset management program is a set of processes and tools that help an organization manage its IT assets throughout their lifecycle, from acquisition to disposal. An IT asset management program should include the following components1234:

• Maintaining inventories of systems, connections, and software applications: This component involves creating and updating a comprehensive and accurate list of all IT assets owned or used by the organization, including their location, ownership, configuration, and status. This helps the organization optimize the use of its IT resources, reduce costs, and ensure compliance with licensing and regulatory requirements.
• Tracking and monitoring availability of vendor updates and any timelines for end of support: This component involves keeping track of the latest updates, patches, and security fixes provided by the vendors of the IT assets, as well as the end-of-life dates and support options for the assets. This helps the organization maintain the security, performance, and functionality of its IT assets, and plan for timely replacement or migration of obsolete or unsupported assets.
• Identifying and tracking adherence to IT asset end-of-life policy: This component involves defining and implementing a policy for retiring and disposing of IT assets that are no longer needed, useful, or supported by the organization. This helps the organization reduce risks, costs, and environmental impacts associated with IT asset disposal, and ensure compliance with data protection and disposal regulations.

Defining application security standards for internally developed applications is not a component of an IT asset management program, but rather a component of an application development and security program. An application development and security program is a set of processes and tools that help an organization design, develop, test, deploy, and maintain secure and reliable applications, whether they are internally developed or acquired from external sources. An application development and security program should include the following components5 :

• Defining application security standards for internally developed applications: This component involves establishing and enforcing a set of security requirements and best practices for the applications developed by the organization, such as secure coding, testing, and deployment methodologies, security controls, and vulnerability management. This helps the organization ensure the confidentiality, integrity, and availability of its applications and data, and prevent or mitigate security breaches and incidents.
• Performing application security assessments for externally acquired applications: This component involves conducting security reviews and audits of the applications acquired from external sources, such as vendors, partners, or open source communities, before integrating them into the organization’s IT environment. This helps the organization identify and address any security risks, gaps, or weaknesses in the applications, and ensure compatibility and compliance with the organization’s security policies and standards.

References:

• ITAM: The ultimate guide to IT asset management
• IT asset management: 10 best practices for success
• Asset Management: The Five Core Components
• The Fundamentals of Asset Management
• Application Development and Security Program
• Application Security Best Practices

Software as a Service (SaaS) is a cloud deployment model that provides users with access to software applications over the internet, without requiring them to install, maintain, or update the software on their own devices. SaaS is primarily focused on the application layer, as it delivers the complete functionality of the software to the end users, while abstracting away the underlying infrastructure, platform, and middleware layers. SaaS providers are responsible for managing the servers, databases, networks, security, and scalability of the software, as well as ensuring its availability, performance, and compliance. SaaS users only pay for the software usage, usually on a subscription or pay-per-use basis, and can access the software from any device and location, as long as they have an internet connection. Some examples of SaaS applications are Gmail, Salesforce, Dropbox, and Netflix. References:

• Shared Assessments CTPRP Study Guide, page 15, section 2.2.2
• Cloud Computing Deployment Models and Architectures, section on Cloud Computing Models
• Layered Architecture of Cloud, section on Application Layer

Continuous monitoring is a process of collecting and analyzing data on the performance and security of third-party vendors on an ongoing basis. Continuous monitoring helps to identify and mitigate potential risks, such as data breaches, credential exposures, insider fraud/theft, and other cyber incidents, that may affect the organization and its customers. Continuous monitoring can use various techniques, such as monitoring surface, vulnerabilities, passive and active indicators of compromise, and business intelligence.

Passive and active indicators of compromise are examples of continuous monitoring techniques that track the signs of malicious activity or compromise on the third-party vendor’s systems or networks. Passive indicators of compromise are data sources that do not require direct interaction with the target, such as threat intelligence feeds, dark web monitoring, or external scanning. Active indicators of compromise are data sources that require direct interaction with the target, such as penetration testing, malware analysis, or incident response. Both passive and active indicators of compromise can provide valuable information on the current state and potential threats of the third-party vendor’s environment.

The other options are not examples of continuous monitoring techniques that track breach, credential exposure and insider fraud/theft alerts. Monitoring surface is a technique that measures the size and complexity of the third-party vendor’s attack surface, such as the number and type of internet-facing assets, domains, and services. Vulnerabilities are a technique that identifies the weaknesses or flaws in the third-party vendor’s systems or applications that can be exploited by attackers, such as outdated software, misconfigurations, or unpatched bugs. Business intelligence is a technique that analyzes the business performance and reputation of the third-party vendor, such as financial stability, customer satisfaction, or regulatory compliance. References:

• Guide: Continuous Monitoring for Third-Party Risk
• Continuous Monitoring - Third Party Risk Management
• 12 Ongoing Monitoring Best Practices for Third-Party Risk Management

Business Continuity or Disaster Recovery (BC/DR) plans are designed to ensure the continuity of critical business functions and processes in the event of a disruption or disaster. BC/DR plans should include annual testing activities to validate the effectiveness and readiness of the plans, as well as to identify and address any gaps or weaknesses. Testing activities should cover the three main areas of BC/DR: people, processes, and technology12.

The four options given in the question represent different types of testing activities that may be included in the BC/DR plans. However, option D is the least likely to be included, as it is not a mandatory or common practice for most organizations. While it is beneficial to involve third party service providers in the BC/DR testing, as they may play a vital role in the recovery process, it is not a requirement or a standard for most industries. Third party service providers may have their own BC/DR plans and testing schedules, which may not align with the organization’s plans and objectives. Moreover, requiring their participation in industry exercises may pose challenges in terms of coordination, confidentiality, and cost34.

Therefore, option D is the correct answer, as it is the least likely to be included in the annual testing activities for BC/DR plans. The other options are more likely to be included, as they are essential for ensuring the availability and functionality of the technology, processes, and personnel that support the critical business operations. These options are:

• A. Plans to enable technology and business operations to be resumed at a back-up site. This is a common testing activity that involves simulating a disaster scenario that affects the primary site and activating the back-up site to resume the operations. This tests the technical infrastructure, data backup and recovery, and operational procedures of the BC/DR plan12.
• B. Process to validate that specific databases can be accessed by applications at the designated location. This is a common testing activity that involves verifying that the data and applications that are critical for the business functions are accessible and functional at the recovery location. This tests the data integrity, security, and compatibility of the BC/DR plan12.
• C. Ability for business personnel to perform their functions at an alternate work space location. This is a common testing activity that involves relocating the key staff to an alternate location and having them perform their normal duties. This tests the communication, coordination, and productivity of the BC/DR plan12.

References:

• 1: How to Test a Business Continuity Disaster Recovery (BCDR) Plan
• 2: Business Continuity or Disaster Recovery Testing and Training Guidelines
• 3: Third Party Risk Management and Business Continuity Planning
• 4: Third Party Risk Management: Business Continuity and Disaster Recovery

This statement is false because assessing risk impact does not require an analysis of prior events, frequency of occurrence, and external trends. These factors are relevant for assessing risk likelihood or probability, not impact. Risk impact is the potential consequence or damage that a risk event may cause to the organization or its stakeholders. Risk impact can be measured qualitatively (e.g., high, medium, low) or quantitatively (e.g., monetary value, percentage of revenue, number of customers affected). To assess risk impact, the organization needs to consider the nature and scope of the risk, the potential harm or loss, and the sensitivity or tolerance of the organization or its stakeholders to the risk. References:

• How to Manage and Measure Third-Party Risk, OneTrust Blog
• Third-party risk, Deloitte
• Assessing Risks in Third Parties, ERM - Enterprise Risk Management Initiative

Web content accessibility guidelines (WCAG) are a set of standards that aim to make web content more accessible to people with disabilities, such as visual, auditory, cognitive, or motor impairments. While WCAG is a good practice for web development and usability, it is not directly related to web application security. WCAG does not address the common security risks that web applications face, such as injection, broken authentication, misconfiguration, or vulnerable components. Therefore, adhering to WCAG is not a method of securing web applications, unlike the other options. References:

• 4: OWASP Top 10, a standard awareness document for web application security, lists the most critical security risks to web applications and provides best practices to prevent or mitigate them.
• 5: SANS Institute, a leading provider of cybersecurity training and certification, offers a security checklist for web application technologies (SWAT) that covers best practices for error handling, data protection, configuration, authentication, session management, input and output handling, and access control.
• 6: Built In, a platform for tech professionals, provides 13 web application security best practices, such as using a web application firewall, keeping track of APIs, enforcing expected application behaviors, and following the OWASP Top 10.