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The organization control environment is most effective when the controls perform as intended. The controls are the mechanisms or measures that are designed and implemented to prevent, detect, or correct the risks that may affect the achievement of the objectives. The controls perform as intended when they provide reasonable assurance that the risks are mitigated or managed to an acceptable level, and that the objectives are met or exceeded. The performance of the controls can be measured and evaluated by using key performance indicators (KPIs) and key risk indicators (KRIs). The other options are not as indicative of the effectiveness of the control environment, as they are related to the review, implementation, or efficiency of the controls, not the performance or assurance of the controls. References = Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Assessment, Section 2.3: IT Control Assessment, page 69.

Risk assessments are most effective when performed at each stage of the system development life cycle (SDLC). The SDLC is a framework that defines the phases and activities of developing, implementing, and maintaining a system. The SDLC typically consists of the following stages: initiation, planning, analysis, design, development, testing, implementation, and maintenance. Performing risk assessments at each stage of the SDLC helps to identify, analyze, and evaluate the risks that could affect the system objectives, requirements, functionality, quality, or performance. Performing risk assessments at each stage of the SDLC also helps to select and implement the appropriate risk responses, such as avoiding, transferring, mitigating, or accepting the risks. Performing risk assessments at each stage of the SDLC also helps to monitor and report the risk status and performance, and to update and adjust the risk assessment and response as the system changes or evolves. Performing risk assessments before system development begins, at system development, or during the development of the business case are not as effective as performing risk assessments at each stage of the SDLC, as they are either too early or too late, and they do not capture the full scope and complexity of the system risks. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 49.

 A risk register is a tool used to identify, assess, and prioritize risks in an organization. It typically includes a detailed description of each identified risk, an assessment of its likelihood and potential impact, and a plan for managing or mitigating the risk1. A risk register is usually created at the beginning of a project or a process, and is updated regularly throughout the risk management life cycle2.

The main reason for creating and maintaining a risk register is to account for identified key risk factors. This means that the risk register helps to:

Document and track all the relevant risks that may affect the project or the organization, and their sources, causes, and consequences

Provide a comprehensive and consistent view of the risk profile and exposure of the project or the organization

Support the decision-making and prioritization of the risk responses and controls, based on the risk appetite and tolerance of the project or the organization

Communicate and report the risk information and status to the stakeholders and regulators, and ensure transparency and accountability

Enable the continuous improvement and learning from the risk management process and outcomes3

References = What is a risk register and why is it important?, Purpose of a risk register: Here’s what a risk register is used for, Risk Register: A Project Manager’s Guide with Examples [2024], Risk Register - Wikipedia

The organization’s information security manager is responsible for IT security controls that are outsourced to an external service provider. The information security manager is accountable for ensuring that the security policies and standards of the organization are followed by the service provider, and that the security objectives and requirements are met. The information security manager is also responsible for monitoring and evaluating the security performance and compliance of the service provider, and for managing the security risks and incidents that may arise from the outsourcing arrangement. The organization’s risk function, the service provider’s IT management, and the service provider’s information security manager are not responsible for IT security controls that are outsourced, as they have different roles and responsibilities in the outsourcing process. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 5, Section 5.2.1.2, page 2461

1: ISACA Certified in Risk and Information Systems Control (CRISC®) Exam Guide, Answer to Question 651.

IT and business misalignment is the risk that the IT objectives, plans, and activities are not aligned with the business goals, needs, and expectations. This can result in wasted resources, missed opportunities, poor performance, and customer dissatisfaction. One of the best ways to mitigate this risk is to involve the business process owner in IT strategy. The business process owner is the person who has the authority and responsibility for a specific business process and its outcomes. By involving the business process owner in IT strategy, the organization can ensure that the IT initiatives and solutions are relevant, effective, and beneficial for the business process and its stakeholders. The business process owner can also provide valuable input, feedback, and support for the IT strategy and its implementation. The other options are not the best ways to mitigate the risk associated with IT and business misalignment, although they may be helpful and complementary. Establishing business key performance indicators (KPIs) is a technique to measure and monitor the achievement of business objectives and outcomes. However, KPIs do not necessarily ensure that the IT strategy is aligned with the business strategy or that the IT activities support the business activities. Introducing an established framework for IT architecture is a method to design and implement the IT infrastructure, systems, and services in a consistent and coherent manner. However, an IT architecture framework does not guarantee that the IT architecture is aligned with the business architecture or that the IT capabilities meet the business requirements. Establishing key risk indicators (KRIs) is a tool to monitor and communicate the level of exposure to a given risk or the potential impact of a risk. However, KRIs do not directly address the risk of IT and business misalignment or the actions needed to align them. References = CRISC Review Manual, pages 22-231; CRISC Review Questions, Answers & Explanations Manual, page 76

 A rule-based data loss prevention (DLP) tool is a software solution that identifies and helps prevent unsafe or inappropriate sharing, transfer, or use of sensitive data. It can help an organization monitor and protect sensitive information across on-premises systems, cloud-based locations, and endpoint devices. It can also help an organization comply with regulations such as the Health Insurance Portability and Accountability Act (HIPAA) and General Data Protection Regulation (GDPR). A rule-based DLP tool works by comparing content to the organization’s DLP policy, which defines how the organization labels, shares, and protects data without exposing it to unauthorized users. The tool can then apply protective actions such as encryption, access restrictions, and alerts. As a result of implementing a rule-based DLP tool, the most likely change is the reduction of risk likelihood, which is the probability of a risk event occurring. By detecting and preventing data breaches, exfiltration, or unwanted destruction of sensitive data, a rule-based DLP tool can lower the chance of such incidents happening and thus decrease the risk likelihood. The other options are less likely to change as a result of implementing a rule-based DLP tool. Risk velocity is the speed at which a risk event impacts an organization, which depends on factors such as the nature of the threat, the response time, and the recovery process. Risk appetite is the amount and type of risk that an organization is willing to accept in pursuit of its objectives, which depends on factors such as the organization’s culture, strategy, and stakeholder expectations. Risk impact is the potential loss or damage that a risk event can cause to an organization, which depends on factors such as the severity of the incident, the extent of theexposure, andthe resilience of the organization. While a rule-based DLP tool may have some influence on these factors, it is not the primary driver of change for them. References = Risk IT Framework, ISACA, 2022, p. 13

The strongest evidence to support a risk response decision is a memo indicating risk acceptance. A memo is a formal and written document that can clearly communicate the rationale, criteria, and approval of the risk acceptance decision. Verbal majority acceptance of risk by committee, list of compensating controls, and IT audit follow-up responses are weaker evidence, as they may not be documented, verified, or aligned with the risk response decision. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 11; CRISC Review Manual, 6th Edition, page 144.

According to the CRISC Review Manual (Digital Version), periodically reviewing controls per the risk treatment plan would best help to ensure that identified risk is efficiently managed, as it involves verifying the effectiveness and efficiency of the implemented risk response actions and identifying any gaps or changes in the risk profile. Periodically reviewing controls per the risk treatment plan helps to:

Confirm that the controls are operating as intended and producing the desired outcomes

Detect any deviations, errors, or weaknesses in the controls and their performance

Evaluate the adequacy and appropriateness of the controls in relation to the current risk environment and the organization’s risk appetite and risk tolerance

Recommend and implement corrective actions or improvement measures to address any issues or deficiencies in the controls

Update the risk register and the risk treatment plan to reflect the current risk status and the residual risk levels

References = CRISC Review Manual (Digital Version), Chapter 4: IT Risk Monitoring and Reporting, Section 4.1: IT Risk Monitoring, pp. 215-2161

A business continuity plan (BCP) is a document that describes the procedures and actions that an organization will take to ensure the continuity of its critical functions and operations in the event of a disruption or disaster12.

Testing a business continuity plan is a method of evaluating the effectiveness and readiness of the BCP, and identifying and addressing any gaps or weaknesses in the plan34.

The most cost-effective way to test a business continuity plan is to conduct a tabletop exercise, which is a type of simulation that involves gathering the key stakeholders and participants of the BCP, and discussing and reviewing the roles, responsibilities, and actions that they will take in response to a hypothetical scenario of a disruption or disaster56.

A tabletop exercise is the most cost-effective way because it requires minimal resources and time, and can be conducted in a regular meeting room or online platform56.

A tabletop exercise is also the most cost-effective way because it provides a high-level overview and assessment of the BCP, and can identify and address the major issues or challenges that may arise in the implementation of the plan56.

The other options are not the most cost-effective ways, but rather possible alternatives or supplements that may have different levels of complexity or cost. For example:

Conducting interviews with key stakeholders is a way of testing a business continuity plan that involves asking and answering questions about the BCP, and collecting feedback and suggestions from the people who are involved or affected by the plan78. However, this way is not the most cost-effective because it may not cover all the aspects or scenarios of the BCP, and may not facilitate the interaction or collaboration among the stakeholders78.

Conducting a disaster recovery exercise is a way of testing a business continuity plan that involves activating and executing the BCP in a realistic and controlled environment, and measuring the outcomes and impacts of the plan . However, this way is not the most cost-effective because it requires a lot of resources and time, and may disrupt or interfere with the normal operations of the organization .

Conducting a full functional exercise is a way of testing a business continuity plan that involves simulating and testing the BCP in a live and dynamic environment, and involving the external entities and stakeholders that are part of the plan . However, this way is not the most cost-effective because it requires the most resources and time, and may pose the highest risk or challenge to the organization . References =

1: Business Continuity Plan (BCP) Definition1

2: Business Continuity Planning - Ready.gov2

3: Testing, testing: how to test your business continuity plan4

4: Comprehensive Guide to Business Continuity Testing | Agility5

5: How to Conduct a Tabletop Exercise for Business Continuity3

6: Tabletop Exercises: A Guide to Success6

7: How to Conduct Testing of a Business Continuity Plan7

8: Business Continuity Plan Testing: Interviewing Techniques8

Disaster Recovery Testing: A Step-by-Step Guide

Disaster Recovery Testing Scenarios: A Guide to Success

Functional Exercises: A Guide to Success

Functional Exercise Toolkit

 The most important consideration when performing a vendor risk assessment is the inherent risk of the business process supported by the vendor, which is the risk that exists before any controls or mitigating factors are applied. The inherent risk reflects the potential impact and likelihood of the vendor’s failure or disruption on the enterprise’s objectives, operations, and reputation. The higher the inherent risk, the more rigorous and frequent the vendor risk assessment should be. The results of the last risk assessment of the vendor, the risk tolerance of the vendor, and the length of time since the last risk assessment of the vendor are not the most important considerations, as they do not directly measure the level of exposure and dependency that the enterprise has on the vendor. References = CRISC Certified in Risk and Information Systems Control – Question204; ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 204.

The most useful tool for measuring the existing risk management process against a desired state is the capability maturity model, as it provides a structured and standardized way to assess the current and target levels of maturity, performance, and effectiveness of the risk management process, and to identify the gaps and improvement opportunities. The balanced scorecard, the risk management framework, and the risk scenario analysis are not the most useful tools, as they are more related to the evaluation, design, or identification of the risk management process, respectively, rather than the measurement of the risk management process. References = CRISC Review Manual, 7th Edition, page 154.

An organization’s account provisioning process is the process of creating, modifying, or deleting user accounts and access rights for the organization’s information systems and resources. It involves defining the access requirements, policies, and standards, and implementing and enforcing them across the organization.

The best evidence of the effectiveness of an organization’s account provisioning process is entitlement reviews, which are the periodic or regular reviews and validations of the user accounts and access rights that are granted or assigned to the users or entities that interact with the organization’s information systems and resources. Entitlement reviews can provide assurance and verification that the account provisioning process is accurate, consistent, and compliant, and that it meets the organization’s security and business objectives and requirements.

Entitlement reviews can be performed using various techniques, such as automated tools, reports, audits, surveys, etc. Entitlement reviews can also be integrated with the organization’s governance, risk management, and compliance functions, and aligned with the organization’s policies and standards.

The other options are not the best evidence of the effectiveness of an organization’s account provisioning process, because they do not provide the same level of assurance and verification that the account provisioning process is accurate, consistent, and compliant, and that it meets the organization’s security and business objectives and requirements.

User provisioning is the process of creating, modifying, or deleting user accounts and access rights for a specific user or entity, based on their identity, role, or function in the organization. User provisioning is an important part of the account provisioning process, but it is not the best evidence of the effectiveness of the account provisioning process, because it does not indicate whether the user accounts and access rights are appropriate and authorized, and whether they comply with the organization’s policies and standards.

Role-based access controls are the controls that grant or restrict user accounts and access rights based on the predefined roles or functions that the users or entities perform or assume in the organization. Role-based access controls are an important part of the account provisioningprocess, but they are not the best evidence of the effectiveness of the account provisioning process, because they do not indicate whether the roles or functions are defined and assigned correctly and consistently, and whether they comply with the organization’s policies and standards.

Security log monitoring is the process of collecting, analyzing, and reporting on the security events or activities that are recorded or logged by the organization’s information systems and resources. Security log monitoring is an important part of the account provisioning process, but it is not the best evidence of the effectiveness of the account provisioning process, because it does not indicate whether the security events or activities are legitimate or authorized, and whether they comply with the organization’s policies and standards. References =

ISACA, CRISC Review Manual, 7th Edition, 2022, pp. 40-41, 47-48, 54-55, 58-59, 62-63

ISACA, CRISC Review Questions, Answers & Explanations Database, 2022, QID 173

CRISC Practice Quiz and Exam Prep

The BEST way to demonstrate alignment of the risk profile with business objectives is through risk scenarios, because they are the descriptions and illustrations of the potential events or situations that may affect the achievement of the business objectives and processes. Risk scenarios can help to demonstrate how the risk profile, which is the summary and representation of the identified and assessed risks, is relatedand relevant to the business objectives and processes, and how the risk responses and controls are designed and implemented to support and enable the business objectives and processes. The other options are not the best way, because:

Option B: Risk tolerance is the level of variation or deviation from the expected or desired outcome that the organization is willing to accept or endure, but it does not demonstrate alignment of the risk profile with business objectives, which is the process of ensuring that the risk profile and the business objectives are consistent and compatible with each other.

Option C: Risk policy is the document that defines the principles, guidelines, and requirements for the risk management process and activities in the organization, but it does not demonstrate alignment of the risk profile with business objectives, which is the process of showing and proving that the risk profile and the business objectives are coherent and integrated with each other.

Option D: Risk appetite is the amount and type of risk that the organization is willing to take or pursue in order to achieve its objectives and goals, but it does not demonstrate alignment of the risk profile with business objectives, which is the process of establishing and maintaining that the risk profile and the business objectives are aligned and balanced with each other. References = Risk and Information Systems Control Study Manual, 7th Edition, ISACA, 2020, p. 104.

Formal acceptance of the risk is critical when the risk exposure exceeds the risk appetite, as it ensures accountability and acknowledges the decision at the appropriate level. Documenting acceptance involves communicating the potential impacts and obtaining agreement from senior stakeholders. This process aligns with theRisk Response and Reportingdomain in CRISC, emphasizing clear documentation and communication of risks for decision-making.

The best approach for selecting controls to minimize risk is to perform a risk assessment. A risk assessment is a process that identifies, analyzes, and evaluates the risks that could affect the organization’s objectives or operations. A risk assessment 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 assessment is the best approach for selecting controls, because it helps to align the controls with the organization’s risk profile, risk appetite, and risk objectives, and to ensure that the controls are adequate, suitable, and cost-effective. The other options are not the best approach for selecting controls, although they may be part of or derived from the risk assessment. Industry best practice review, cost-benefit analysis, and control-effectiveness evaluation are all activities that can help to support or improve the control selection, but they are not the best approach for selecting controls. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.2.1, page 4-13.

Policies must reflect the actual structure and processes of the business to be enforceable and effective. Alignment ensures that policies are understood, applicable, and tailored to how the business operates.

 The best course of action for the risk practitioner who has identified that the agreed RTO with a SaaS provider is longer than the business expectation is to document the gap in the risk register and report to senior management. The risk register is the document that records the details of all identified risks, including their sources, causes, impacts, likelihood, and responses. The risk register should be updated regularly to reflect any changes in the risk environment or the risk status. Reporting to senior management is also important, because senior management is the highest level of authority and responsibility in the organization, and they are responsible for setting the strategic direction, objectives, and risk appetite of the organization. Senior management should also oversee the risk management process, and ensure that the risks are aligned with the organization’s goals and values. By documenting the gap in the risk register and reporting to senior management, the risk practitioner can communicate the issue clearly and effectively, and seek guidance and support for resolving the problem. Collaborating with the risk owner, including a right to audit clause, or advising the risk owner to accept the risk are not the best courses of action, because they may not be feasible, effective, or desirable in some situations, or they may require senior management approval or involvement. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.2.1, page 4-13.

Comprehensive and Detailed Explanation From Exact Extract:

A decrease in risk appetite typically results in tighter tolerances and thresholds for KRIs, as the organization becomes less willing to accept certain levels of risk. KPIs and risk objectives may also be impacted but are less directly tied to appetite shifts. Risk trends reflect historical data rather than appetite settings

The primary reason to update a risk register with risk assessment results is to communicate the level and priority of assessed risk to management, as this enables them to make informed decisions about risk response and allocation of resources. The risk register is a tool for documenting and reporting the current status of risks, their causes, impacts, likelihood, and responses. Updating the risk register with risk assessment results ensures that the information is accurate, relevant, and timely. The risk register also helps to monitor and track the progress and effectiveness of risk management activities. The other options are not the primary reasons to update the risk register, although they may be secondary benefits or outcomes of doing so. References = Risk and Information Systems Control Study Manual, Chapter 3: IT Risk Assessment, page 109.

Risk scenarios should reflect probable events to ensure relevance and practicality in risk assessments. This guidance supports theRisk Identification and Scenario Developmentprocess.

 According to the Key Performance Indicators for Vulnerability Management article, the number of vulnerabilities remediated is a key performance indicator that measures the effectiveness of a vulnerability remediation program. This KPI indicates how many vulnerabilities have been successfully mitigated or fixed within a given time frame. A higher number can imply that the organization is effectively managing its exposures and reducing its risk level. The number of vulnerabilities remediated can also be compared with the number of new vulnerabilities identified to evaluate the progress and performance of the vulnerability remediation program. References = Key Performance Indicators for Vulnerability Management

The most important information for the risk practitioner to communicate to senior management for contract negotiation purposes when the organization wants to transfer risk by purchasing cyber insurance is the current annualized loss expectancy report, as it provides an estimate of the potential financial loss or impact that theorganization may incur due to a cyber risk event in a given year, and helps to determine the optimal coverage and premium of the cyber insurance. The other options are not the most important information, as they are more related to the audit, asset, or industry aspects of the cyber risk, respectively, rather than the financial aspect of the cyber risk. References = CRISC Review Manual, 7th Edition, page 111.

Obfuscating customer information ensures data privacy by rendering sensitive details unintelligible to unauthorized parties, reducing the risk of exposure during transit or processing. This aligns withData Protection and Privacy Regulationsunder risk management frameworks, emphasizing safeguarding personally identifiable information.

According to the CRISC Review Manual (Digital Version), the most important consideration when sharing risk management updates with executive management is ensuring relevance toorganizational 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

Enforcing segregation of duties between the vendor master file and invoicing is the best process control to mitigate the risk of an employee issuing fraudulent payments to a vendor. This is because segregation of duties is a key internal control that prevents or detects errors, fraud, orabuse by ensuring that no single person can perform incompatible or conflicting tasks. The vendor master file is a database that contains the information and settings for each vendor, such as name, address, bank account, payment terms, etc. Invoicing is the process of generating and sending bills to the vendors for the goods or services they provide. If the same person can access and modify the vendor master file and issue invoices, he or she could create fictitious vendors, alter vendor information, or generate false or duplicate invoices, and then divert the payments to his or her own account. By segregating these duties, the organization can reduce the opportunity and likelihood of such fraudulent activities. According to the CRISC Review Manual 2022, segregation of duties is one of the key IT control objectives and practices1. According to the web search results, segregation of duties between the vendor master file and invoicing is a common and recommended control to prevent vendor fraud

The group that has primary ownership of reputational risk stemming from unethical behavior within the organization is A. Board of directors. According to the CFA Institute, the board of directors is responsible for setting the tone at the top and ensuring that the company adheres to high ethical standards and values. The board of directors also oversees the company’s culture, governance, and risk management practices, and holds the management accountable for any misconduct or breach of trust1 The board of directors may delegate some of its oversight functions to other committees, such as the human resources, risk management, or audit committee, but ultimately, the board of directors bears the ultimate responsibility for the company’s reputation and integrity

A maturity model is a framework that describes the stages or levels of development and improvement of a certain domain, such as a process, a function, or an organization. A maturity model is most useful to an organization when it provides a reference for progress, meaning that it helps the organization to assess its current state, identify its strengths and weaknesses, set its goals and objectives, and measure itsperformance and improvement over time. A maturity model can also help the organization to compare itself with best practices and standards, but benchmarking against other organizations is not its primary purpose. A maturity model can also help the organization to manage its risks, but defining a qualitative measure of risk or providingrisk metrics is not its main function. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.3.2.1, p. 118-119

A system availability risk scenario is a situation where a system or a service is not accessible or functional due to a failure or an attack. The likelihood of such a scenario depends on the vulnerabilities or weaknesses that exist in the system or the service, and the threats or attackers that could exploit them. Therefore, by scanning the critical systems or services for vulnerabilitiesand analyzing the results, one can estimate the probability or frequency of a system availability risk scenario1.

A vulnerability scan is a process of identifying and evaluating the potential security risks in a system or a service. A vulnerability scan report provides a list of vulnerabilities that have been detected, categorized by their severity levels, and accompanied by remediation recommendations. By reviewing the report, one can understand the current security posture of the system or the service, and the actions that need to be taken to address the vulnerabilities2.

The other options are not the best ways to determine the likelihood of a system availability risk scenario, but rather some of the factors or outcomes of it. Availability of fault tolerant software is a factor that can reduce the likelihood of a system availability risk scenario, as it means that the software can continue to operate without interruption even if some of its components fail. Fault tolerant software can achieve this by using backup or redundant components, or by implementing error detection and correction mechanisms3. Strategic plan for business growth is an outcome of a system availability risk scenario, as it can affect the organization’s objectives and strategies. A system availability risk scenario can have negative impacts on the organization’s performance, reputation, customer satisfaction, and competitive advantage, and thus hamper its growth potential4. Redundancy of technical infrastructure is a factor that can reduce the likelihood of a system availability risk scenario, as it means that the infrastructure has duplicate or alternativedevices or paths that can take over in case of a failure or an attack. Redundancy of technical infrastructure can ensure network availability and prevent data loss5. References =

Describe the risk scenarios | NZ Digital government

How to Read a Vulnerability Scan Report | Evolve Security

Learn about Fault Tolerant Servers | What is Fault Tolerance?-Stratus

The Importance of Redundancies in Your Infrastructure - INAP

What is Redundancy? - Your IT Department

[CRISC Review Manual, 7th Edition]

Determining Controls:

Acceptable Risk Level: The level of acceptable risk to the organization is the most important consideration because it directly influences the type and extent of controls implemented. Controls must be designed to keep risk within acceptable levels.

Risk Management Strategy: Aligning controls with the organization's risk appetite ensures that resources are used effectively and that critical information systems are adequately protected.

Comparison with Other Options:

Number of Threats: Important for understanding risk exposure but secondary to determining acceptable risk levels.

Available Budget: Budget constraints are important but should not compromise the implementation of necessary controls.

Number of Vulnerabilities: Identifying vulnerabilities is part of the risk assessment process, but controls are prioritized based on the acceptable risk level.

Best Practices:

Risk Assessment: Conduct thorough risk assessments to understand the potential impact of threats and vulnerabilities.

Control Effectiveness: Implement controls that are both cost-effective and capable of reducing risk to acceptable levels.

Continuous Monitoring: Regularly monitor and review controls to ensure they remain effective and aligned with the organization's risk tolerance.

The most important risk consideration when the global company’s business continuity plan (BCP) requires the transfer of its customer information to a cloud computing environment in the event of a disaster is that the cloud computing environment is shared with another company. A cloud computing environment is a service model that provides on-demand access to a shared pool of computing resources, such as servers, storage, networks, and applications. A shared cloud computing environment means that the same computing resources are used by multiple customers or tenants, and that the data and activities of one customer may affect or be affected by the data and activities of another customer. This may pose a significant risk to the security, privacy, and availability of the customer information, as it may be exposed, accessed, modified, or deleted by unauthorized or malicious parties. The other options are not as important as the cloud computing environment being shared with another company, as they are related to the differences, agreements, or cultures of the company or the country, not the environment or the platform of the customer information transfer. References = Risk and Information Systems Control Study Manual, Chapter 3: IT Risk Response, Section 3.3: IT Risk Response Implementation, page 145.

 Involving business management in evaluating and managing risk is beneficial, as it enables management to have a comprehensive and holistic view of the risk environment and its impact on the organization’s objectives and strategy. By participating in the risk management process, management can make better-informed business decisions, as they can consider the risk factors and implications of their choices, and align their decisions with the organization’s risk appetite and tolerance. Involving business management in evaluating and managing risk can also enhance the risk culture and governance of the organization, and foster a proactive and collaborative approach to risk management. References = Most Asked CRISC Exam Questions and Answers. CRISC: Certified in Risk & Information Systems Control Sample Questions, Question 253. ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, Question 253. CRISC by Isaca Actual Free Exam Q&As, Question 9.

Avoiding the risk means eliminating the source of the risk or changing the likelihood or impact to zero. In this case, the source of the risk is the collection of customers’ personally identifiable information (Pll), which could be exposed to unauthorized parties and result in severe fines. Therefore, the best action to avoid the risk is to modify the business processes to stop collecting Pll, as this would eliminate the possibility of data leakage and the associated consequences. The other options are not as effective as modifying the business processes, because they do not avoid the risk, but rather mitigate or transfer the risk, as explained below:

A. Reduce retention periods for Pll data is a mitigation action, as it reduces the impact of the risk by minimizing the amount of data that could be leaked and the duration of exposure.

B. Move Pll to a highly-secured outsourced site is a transfer action, as it shifts the responsibility of protecting the data to a third party, but does not eliminate the risk of data leakage.

D. Implement strong encryption for Pll is a mitigation action, as it reduces the likelihood of the risk by making the data unreadable to unauthorized parties, but does not eliminate the risk of data leakage. References = Risk and Information Systems Control Study Manual, Chapter 2, Section 2.2.2, page 40.

A risk register is a document that records and tracks the information about the risks that may affect the organization’s objectives, such as the risk description, category, source, cause, impact, probability, status, owner, response, etc.

When developing a new risk register, a risk practitioner should focus on risk identification. This is the process of finding, recognizing, and describing the risks that may affect the organization’s objectives, using various techniques, such as brainstorming, interviews, checklists, surveys, etc.

Risk identification helps to create a comprehensive and accurate list of the risks that need to be managed, and to provide the basis for the subsequent risk analysis and evaluation, risk response planning, and risk monitoring and control.

The other options are not the risk management activities that a risk practitioner should focus on when developing a new risk register. They are either subsequent or parallel to risk identification.

The references for this answer are:

Risk IT Framework, page 29

Information Technology & Security, page 23

Risk Scenarios Starter Pack, page 21

Involve the development team in planning is the best recommendation to help reduce IT risk associated with scheduling overruns when starting a new application development project. This is because involving the development team in planning can help ensure that the project scope, requirements, resources, and timeline are realistic, feasible, and agreed upon by all stakeholders. It can also help improve the communication, collaboration, and commitment of the development team, as well as identify and mitigate potential risks and issues early in the project life cycle. According to the CRISC Review Manual 2022, one of the key risk identification techniques for IT projects is to involve the project team and other relevant parties in the risk assessment process1. According to the CRISC Review Questions, Answers & Explanations Manual 2022, involving the development team in planning is the correct answer to this question2.

Implementing a tool to track the development team’s deliverables, reviewing the software development life cycle, and assigning more developers to the project team are not the best recommendations to help reduce IT risk associated with scheduling overruns. These are possible actions that can be taken during or after the planning phase, but they do not address the root cause of the risk, which is the lack of involvement of the development team in planning. Implementing a tool to track the development team’s deliverables can help monitor the project progress and performance, but it does not guarantee that the deliverables are aligned with the project objectives and expectations. Reviewing the software development life cycle can help ensure that the project follows a structured and standardized process, but it does not account for the specific needs and challenges of the project. Assigning more developers to the project team can help increase the project capacity and productivity, but it can also introduce new risks such as coordination, communication, and quality issues.

Conducting a risk assessment with stakeholders is the best course of action for the risk practitioner to evaluate the adoption of a third-party blockchain integration platform, because it helps to identify, analyze, and evaluate the risks and opportunities associated with the platform, and to compare them with the organization’s risk appetite and value proposition. A risk assessment is a process of systematically identifying and assessing the sources and types of risk that an organization faces, and estimating their likelihood and impact. A risk assessment also involves identifying and evaluating the existing or proposed controls or mitigating factors that can reduce or eliminate the risk. A stakeholder is a person or group that has an interest or influence in the organization or its activities, such as customers, employees, shareholders,suppliers, regulators, or partners. A blockchain integration platform is a software solution that enables the organization to connect and interact with blockchain networks or applications, such as cryptocurrencies, smart contracts, or distributed ledgers. A blockchain integration platform can offer benefits such as transparency, security, efficiency, and innovation, but it can also pose risks such as technical complexity, interoperability issues, regulatory uncertainty, or cyberattacks. Therefore, conducting a risk assessment with stakeholders is the best way to evaluate the adoption of a third-party blockchain integration platform, as it helps to understand the benefits and risks of the platform, and to align them with the organization’s objectives and risk appetite. Conducting third-party resilience tests, updating the risk register with the process changes, and reviewing risk related to standards and regulations are all important tasks to perform after conducting a risk assessment, but they are not the best course of action, as they depend on the results of the risk assessment. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.2.2, page 87

 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. Anorganizational 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

Using aconsistent risk taxonomyensures that IT risks can be aggregated and compared with enterprise-level risks in a meaningful way. ISACA emphasizes that standardized risk language and categories are critical to integrating IT risk with ERM processes.

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According to the CRISC Review Manual (Digital Version), the best way to validate the results of a vulnerability assessment is to perform a penetration test, which is a type of security testing that simulates an attack on the IT assets and processes to exploit the identified vulnerabilities and evaluate the potential impact and severity of the attack. Performing a penetration test helps to:

Confirm the existence and exploitability of the vulnerabilities detected by the vulnerability assessment

Measure the effectiveness and efficiency of the existing security controls and countermeasures

Identify and prioritize the risks and gaps in the security posture of the IT assets and processes

Recommend and implement appropriate remediation and mitigation actions to address the vulnerabilities and risks

Enhance the security awareness and resilience of the organization

References = CRISC Review Manual (Digital Version), Chapter 1: IT Risk Identification, Section 1.5: IT Risk Identification Methods and Techniques, pp. 36-371

Effective risk reporting to the board of directors requires communication that aligns with the organization's strategic goals and business value. By correlating risk information to corporate objectives, the board can better understand the implications of risks on the organization's performance and make informed decisions. This approach ensures that risk discussions are relevant and meaningful at the executive level.​

Conducting a risk assessment is a critical process that helps organizations identify, evaluate, and prioritize risks that could impact their objectives. The introduction of a new product line is most likely to trigger the need for a risk assessment due to the following reasons:

Introduction of a New Product Line (Answer D):

Significance: Launching a new product involves significant changes to business processes, technologies, and possibly market dynamics. It introduces new elements that could affect the organization's risk profile.

Complexity and Uncertainty: New products often come with unknown risks and uncertainties. Understanding these risks is crucial to ensure they are managed effectively.

Impact on Operations: A new product can impact various facets of the organization, including production, supply chain, IT infrastructure, and customer support. Assessing risks helps in planning and mitigating potential disruptions.

Compliance and Regulatory Considerations: New products might have to comply with new regulations or standards, necessitating a review of associated risks.

Comparison with Other Options:

A. An incident resulting in data loss:

Purpose: While incidents like data loss are serious and require immediate response and investigation, they typically trigger incident management and post-incident reviews rather than a full risk assessment.

B. Changes in executive management:

Purpose: Changes in leadership can influence the strategic direction and priorities of the organization, but they do not inherently introduce new operational risks that necessitate an immediate risk assessment.

C. Updates to the information security policy:

Purpose: Policy updates are often based on previously identified risks and aim to mitigate them. They are more about adjusting controls rather than reassessing the risk landscape completely.

 Role of the System Owner:

The system owner is responsible for the overall operation and management of an application or system. This includes ensuring that technical controls are implemented and functioning as intended.

They have detailed knowledge of the system's architecture, the controls in place, and how those controls are applied within the system.

 Effectiveness of Technical Controls:

Assessing the effectiveness of a technical control requires understanding its implementation, configuration, and operational context.

The system owner is best positioned to provide this information as they manage and oversee the technical environment of the application.

 Comparing Other Roles:

Internal Auditor:While auditors review and evaluate the effectiveness of controls, they do so from an independent standpoint and might not have detailed, day-to-day operational insights.

Process Owner:The process owner focuses on business processes rather than technical controls specific to an application.

Risk Owner:The risk owner is responsible for managing risk but may not have the technical expertise or detailed operational knowledge of the system.

 Supporting Information:

According to the CRISC Review Manual, the system owner is often involved in the assessment and reporting of control effectiveness, especially regarding technical controls (CRISC Review Manual, Chapter 3: Risk Response and Mitigation, Section 3.1.3 Assessing Control Effectiveness) .

 The most important requirement to include in an outsourcing contract to help ensure sensitive data stored with a service provider is secure is a third-party assessment report of control environment effectiveness. This will help to verify that the service provider has implemented adequate security controls and practices to protect the data, and that they comply with the enterprise’s security policies and standards. A third-party assessment report also provides an independent and objective assurance of the service provider’s security posture and performance. Incidents related to data loss, risk assessment results, and cyber insurance policy are also important requirements to include in an outsourcing contract, but they are not as important as a third-party assessment report. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 5, Section 5.2.1.2, page 2461

1: ISACA Certified in Risk and Information Systems Control (CRISC®) Exam Guide, Answer to Question 643.

Monitoring control effectivenesscan be done by all lines to varying degrees. The first line monitors during execution, the second provides oversight, and the third provides independent assurance.

Risk scenario development is a process that involves identifying and describing the potential risk events that can affect an organization’s objectives and operations. Risk scenario development requires the input and participation of various stakeholders, such as the management, the staff, the customers, the suppliers, the regulators, and the competitors. The primary benefit of stakeholder involvement in risk scenario development is that it increases the awareness of emerging business threats, meaning that it helps to identify and anticipate the new or changingsources and impacts of risk that may not be captured by theexisting risk assessment methods or tools. Stakeholder involvement can also help to improve the quality and completeness of the risk scenarios, as well as to enhance the communication and collaborationamong the stakeholders regarding the risk management process. References = Risk and Information Systems Control Study Manual, Chapter 2, Section 2.2.1.1, p. 66-67

A new risk scenario without controls means that there is a potential threat or event that could adversely affect the organization’s objectives, and there are no existing measures to prevent or reduce the impact or likelihood of the risk. Therefore, the most appropriate action is to include the new risk scenario in the current risk assessment, so that the risk practitioner can analyze therisk, evaluate its severity and priority, and recommend suitable controls to mitigate the risk. By including the new risk scenario in the current riskassessment, the risk practitioner can ensure that the risk register is updated and reflects the current risk profile of the organization. The other options are not appropriate because they either ignore the new risk scenario, delay the risk assessment process, or remove valuable information from the risk register. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.4.1, page 95.

In the event of a data breach or misuse of confidential information, the first step is to activate the incident response plan. This ensures immediate containment, impact analysis, and communication protocols are followed.

Unapproved changes to firewall rules can lead tocritical security vulnerabilitiesordisruptions to business services, representing adirect impact on the business. This is more critical than documentation or governance concerns.

The best action for the risk practitioner to take when business areas within an organization have engaged various cloud service providers directly without assistance from the IT department is to recommend a risk assessment be conducted. A risk assessment is a process of identifying, analyzing, and evaluating the risks associated with the use of cloud services, such as financial, privacy, compliance, security, performance, quality, and technical risks12. A risk assessment can help to determine the current and potential risk exposure and impact of the cloud services, as well as the effectiveness and efficiency of theexisting or proposed controls. A risk assessment can also help to prioritize the risks and to develop and implement appropriate risk response strategies and plans, such as risk avoidance, reduction, sharing, or acceptance. Recommending a risk assessment is the best action, because it can provide valuable information and guidance to the business areas and the IT department for managing the cloud services in a consistent, effective, and efficient manner, and for aligning the cloud services with the organizational objectives, strategy, and risk appetite. The other options are not the best action, although they may be related or subsequent steps in the risk management process. Recommending the IT department remove access to the cloud services is a drastic and impractical action, as it may disrupt the business operations and services, and it may not address the underlying causes or drivers of the cloud service adoption. Engaging with the business area managers to review controls applied is a useful and collaborative action, as it can help to understand and evaluate the current state and practices of the cloud service usage, and to identify and address any gaps or issues in the control environment. However, this action should be based on or supported by a risk assessment, rather than preceding or replacing it. Escalating to the risk committee is a reporting and communication action, as it can help to inform and involve the senior management and other stakeholders in the risk management process, and to obtain their support and approval for the risk response actions. However, this action should be done after or along with a risk assessment, rather than before or instead of it. References = Best Practices to Manage Risks in the Cloud - ISACA, Cloud Risk Management - PwC UK