CRISC Certified in Risk and Information Systems Control Question and Answers

The best way to increase the chances of a successful delivery of a new application and to assure the business management that IT has a plan in place for early identification of potential issues is to include business management on a weekly risk and issues report. A risk and issues report is a document that summarizes the current status, progress, and challenges of the IT project, as well as the actions and resources needed to address them. A risk and issues report helps to communicate and align the expectations and objectives of the IT and business stakeholders, and to facilitate timely and effective decision-making and problem-solving. A risk and issues report also helps to monitor and control the project scope, schedule, budget, and quality, and to ensure that the project delivers the desired value and benefits to the organization. The other options are not as effective as including business management on a weekly risk and issues report, althoughthey may be part of the IT project management process or outcomes. Implementing a release and deployment plan, conducting comprehensive regression testing, and developing enterprise-wide key risk indicators (KRIs) are all activities that can help to ensure the quality and reliability of the new application, but they do not necessarily involve the business management or provide assurance for the early identification of potential issues. References = Risk and Information Systems Control Study Manual, Chapter 5, Section 5.4.1, page 5-32.

 The best way to enable a risk-based decision when considering the use of an emerging technology for data processing is to perform a gap analysis. A gap analysis is a technique that compares the current state and the desired state of a process, system, or capability, and identifies the gaps or differences between them. A gap analysis can help to evaluate the benefits, costs, risks, and opportunities of using an emerging technology for data processing, and to determine the feasibility, suitability, and readiness of adopting the emerging technology. The other options are not as helpful as a gap analysis, as they are related to the specific aspects or components ofthe data processing, not the overall assessment and comparison of the current and desired state of the data processing. References = Risk and Information Systems Control Study Manual, Chapter 1: IT Risk Identification, Section 1.2: IT Risk Identification Methods, page 19.

Recovery time objectives (RTOs) are the acceptable timeframes within which business processes must be restored after a disruption. RTOs should be based on the maximum tolerable downtime (MTD), which is the longest time that a business process can be inoperable without causing irreparable harm to the organization. The other options are not directly related to RTOs, as they refer to the amount of data loss or corruption that can be tolerated, not the time to restore the business processes. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.3: Key Risk Indicators, page 197.

Key Risk Indicators (KRIs)are metrics used to monitor changes in risk exposure, enabling proactive adjustments to keep risks within appetite. They provide early warnings of potential breaches in risk thresholds.

The RPO defines how much data loss is acceptable during system failure. If not clearly defined, restoration may skip key data, leading to incomplete recovery. ISACA guidelines highlight that alignment of RPO/RTO with business objectives is critical for viable DR planning

Organizational risk culture is the term describing the values, beliefs, knowledge, attitudes and understanding about risk shared by a group of people with a common purpose. Organizationalrisk culture influences how the organization identifies, assesses, and manages risks, and how it aligns its risk appetite and tolerance with its objectives and strategies1.

The best indication of a mature organizational risk culture is that risk owners understand and accept accountability for risk, because it means that the organization:

Clearly defines and assigns the roles and responsibilities of the risk owners, who are the individuals or groups who have the authority and ability to manage the risks within their scope or domain

Empowers and supports the risk owners to perform their risk management duties, such as identifying, assessing, responding, monitoring, and reporting the risks

Holds the risk owners accountable for the outcomes and consequences of the risks, and evaluates their performance and compliance with the risk policies, standards, and procedures

Encourages and rewards the risk owners for demonstrating risk awareness and competence, and for contributing to the risk management improvement and learning23

The other options are not the best indications of a mature organizational risk culture, but rather some of the elements or aspects of it. Corporate risk appetite is the amount and type of risk that the organization is willing to accept in order to achieve its objectives. Corporate risk appetite is communicated to staff members to guide their risk decision making and behavior, and to ensure the consistency and alignment of the risk taking and tolerance across the organization. Risk policy is the document that establishes the principles, framework, and process for managing the risks within the organization. Risk policy is published and acknowledged by employees to ensure their awareness and compliance with the risk management expectations and requirements. Management is the group of individuals who have the authority and responsibility to direct and control the organization’s activities and resources. Management encourages the reporting of policy breaches to ensure the transparency and accountability of the risk management performance and outcomes, and to identify and address the risk management issues and gaps4. References =

Risk culture - Institute of Risk Management

Risk Owner - ISACA

Taking control of organizational risk culture | McKinsey

[CRISC Review Manual, 7th Edition]

External audit reports are independent and objective, typically conducted under standard frameworks (e.g., SOC 2). They assess the third party’s controls in a structured and verifiable manner, offering the highest assurance of confidentiality protections.

The risk practitioner is responsible for determining which stakeholders need to be involved in the development of a risk scenario, as they have the knowledge and skills to facilitate the process and ensure that the relevant perspectives and information are considered. The risk owner, the compliance manager, and the control owner are examples of stakeholders who may participate in the risk scenario development, but they are not responsible for determining who should be involved. References = Risk Scenarios Toolkit, page 9; CRISC Review Manual, 7th Edition, page 101.

Personal data is any information that relates to an identified or identifiable individual, such as name, address, email, phone number, etc. Processing personal data involves collecting, storing, using, disclosing, or deleting it. Processing personal data poses various risks to the privacy and security of the data subjects,such as unauthorized access, disclosure, modification, or loss. Therefore, processing personal data requires appropriate technical and organizational measures to safeguard the data and to comply with the relevant laws and regulations. One of the most effective practices to safeguard the processing of personal data is to use tokenization. Tokenization is a technique that replaces sensitive data elements with non-sensitive equivalents, called tokens, that have no meaning or value outside of a specific system or context. Tokenization reduces the risk of exposing personal data to unauthorized parties, as the tokens cannot be reversed or linked back to the original data without the proper key or algorithm. Tokenization also helps to minimize the amount of personal data that is stored or transmitted, and to limit the scope of compliance requirements. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.3.2.2, p. 196-197

When remediation is delayed, compensating controls provide interim protection by reducing risk to acceptable levels.

The primary focus of an independent review of a risk management process is to evaluate the maturity of the process, which means the extent to which the process is aligned with the organization’s objectives, culture, and governance, and how well it is integrated, implemented, and monitored across the organization. A mature risk management process is one that is consistent, effective, efficient, and adaptable to changing circumstances and environments. A maturity assessment can help to identify the strengths and weaknesses of the risk management process, as well as the opportunities and challenges for improvement. The other options are not the primary focus, but they may be secondary or tertiary aspects of the review. Accuracy of risk tolerance levels is a measure of how well the organization defines and communicates its risk appetite and risk limits, which are important inputs for the risk management process, but not the main outcome. Consistency of risk process results is a measure of how reliable and repeatable the risk management process is, which reflects the quality and validity of the data, assumptions, methods, and tools used in the process, but not the overall effectiveness and efficiency of the process. Participation of stakeholders is a measure of how well the organization engages and involves its internal and external stakeholders in the risk management process, which enhancesthe awareness, ownership, andaccountability of the process, but not the alignment and integration of the process. References = Assessing the Risk Management Process, p. 9-10.

 When reporting risk assessment results to senior management, the most important information to include to enable risk-based decision making is the potential losses compared to treatment cost. This information helps to quantify the impact and likelihood of the risks, and to evaluate the cost and benefit of the risk responses. This information also helps to prioritize and allocate resources for the risk management program, and to align the risk management program with the enterprise’s objectives, strategy, and risk appetite. The other options are not as important as the potential losses compared to treatment cost, as they provide different types of information for the risk management process:

Risk action plans and associated owners are the documents that specify the actions to be taken to address the identified risks, the resources required, the timelines, the owners, and the expected outcomes. This information helps to implement and monitor the risk management program, and to assign the authority and accountability for the risk management activities.

Recent audit and self-assessment results are the outcomes of the independent and objective examination of the risk management program, such as by internal or external auditors, or by the risk owners or practitioners themselves. This information helps to provide assurance and feedback on the effectiveness and efficiency of the risk management program, and to identify the gaps or weaknesses that need to be addressed.

A list of assets exposed to the highest risk are the resources that have the most value for the enterprise, such as hardware, software, data, or services, and that are affected by or contribute to the highest risks. This information helps to identify and protect the critical assets of theenterprise, and to reduce the exposure and impact of the risks to the assets. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 2, Section 2.3.1.1, pp. 58-59.

The second line of defense provides oversight to ensure risks and controls are effectively managed. This includes compliance, risk management policies, and performance monitoring, aligning withRisk Governanceframeworks and enhancing the organization’s risk resilience.

Several network user accounts were recently created without the required management approvals. This indicates that there is a risk of unauthorized access, use, disclosure, modification, or destruction of the network resources or data, which may affect the confidentiality, integrity, and availability of the network.

The best recommendation to address this situation is to investigate the root cause of noncompliance. This means that the risk practitioner should analyze the factors or reasons that led to the creation of the network user accounts without the required management approvals, such as human error, negligence, malice, system failure, process flaw, etc.

Investigating the root cause of noncompliance helps to identify and correct the source of the problem, prevent or reduce the recurrence of the problem, and improve the compliance and security of the network user accounts.

The other options are not the best recommendations to address this situation. They are either secondary or not effective for noncompliance.

The references for this answer are:

Risk IT Framework, page 31

Information Technology & Security, page 25

Risk Scenarios Starter Pack, page 23

The best course of action to address the risk associated with data transfer if the relationship is terminated with the vendor is to ensure the language in the contract explicitly states who is accountable for each step of the data transfer process. This can help to avoid ambiguity, confusion, or disputes over the ownership, responsibility, and liability of the data and the data transfer process. Meeting with the business leaders, collecting requirements, and working with the information security officer are important activities, but they are not as effective as ensuring the contractual agreement is clear and enforceable. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 4; CRISC Review Manual, 6th Edition, page 153.

The Recovery Time Objective (RTO) is the maximum acceptable length of time that a system can be down after a failure or disaster. Determining the RTO involves assessing the cost of downtime and its impact on business operations to ensure that recovery strategies are cost-effective and aligned with business needs.

The best approach to ensure the effectiveness of risk awareness training is to create modules for targeted audiences. This means that the risk awareness training should be customized and tailored to the specific needs, roles, and responsibilities of different groups of staff, such as business owners, process owners, IT staff, or external parties. Creating modules for targeted audiences helps to ensure that the risk awareness training is relevant, engaging, and applicable to the participants, and that it covers the appropriate level of detail and complexity. It also helps to enhance the learning outcomes and retention of the risk awareness training, and to foster aculture of risk awareness and responsibility within the enterprise. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 5, Section 5.4.1, page 2491

The most critical factor when designing controls is the involvement of the process owner, who is the person responsible for the performance and outcomes of a business process. The process owner has the best knowledge and understanding of the process objectives, activities, inputs,outputs, resources, and risks. The process owner can provide valuable input and feedback on the design of controls that are relevant, effective, efficient, and aligned with the process goals. The process owner can also ensure that the controls are implemented, monitored, and improved as needed. The involvement of the process owner can also increase the acceptance and ownership of the controls by the process participants and stakeholders. The other options are less critical when designing controls. The involvement of internal audit can provide assurance and advice on the adequacy and effectiveness of the controls, but internal audit is not responsible for the design or implementation of the controls. The quantitative impact of the risk can help to prioritize and justify the controls, but it is not sufficient to determine the appropriate type and level of controls. The identification of key risk indicators can help to monitor and measure the risk and the performance of the controls, but it is not the main driver of the control design. References = Risk IT Framework, ISACA, 2022, p. 181

 Risk culture is the system of values and behaviors present in an organization that shapes risk decisions of management and employees1. Risk culture influences how the organization perceives, responds to, and manages the risks that may affect its objectives, operations, or assets2.

The scenario described in the question best demonstrates an organization’s risk culture, because it shows how the management team’s attitude and actions towards risk are driven by the organization’s values and goals. In this case, the organization’s risk culture is characterized by:

A high risk appetite and tolerance, which means that the organization is willing to take and accept significant risks in order to achieve its strategic objectives of launching a new product and penetrating new markets

A low risk awareness and sensitivity, which means that the organization does not pay enough attention or consideration to the potential IT risk factors, threats, and vulnerabilities that may affect its product development and market entry

A weak risk governance and control, which means that the organization does not have adequate or effective policies, procedures, or mechanisms to identify, assess, respond, or monitor the IT risks and their impacts

References = Risk Culture of Companies | ERM - Enterprise Risk Management Initiative …, Taking control of organizational risk culture | McKinsey

The risk owner is primarily accountable for risk treatment decisions, as they are the person or entity with the authority and responsibility to manage a particular risk. The risk owner shouldevaluate the available risk response options, select the most appropriate one, implement the chosen response, and monitor its effectiveness. The risk owner should also communicate and report on the risk status and any issues or changes. The business manager, data owner, and risk manager are not primarily accountable for risk treatment decisions, although they may be involved in the risk management process. The business manager is responsible for the overall performance and objectives of a business unit or function. The data owner is responsible for the security and quality of a specific data asset. The risk manager is responsible for facilitating and coordinating the risk management activities across the organization. References = Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Identification, page 47.

An IT policy is a document that defines the rules, standards, and procedures for the use, management, and security of IT resources within an organization. An IT policy should be aligned to the business requirements, which are the needs, expectations, and objectives of the business stakeholders, such as customers, employees, managers, partners, regulators, etc. An IT policy that is aligned to the business requirements can help support the business strategy, improve the business performance, and enhance the business value. A key performance indicator (KPI) is a metric that measures the achievement of a specific goal or objective. A KPI should be relevant, measurable, achievable, realistic, and time-bound. The best KPI for determining how well an IT policy is aligned to the business requirements is the number of exceptions to the policy. An exception to the policy is a deviation or violation of the policy rules, standards, or procedures, which may be intentional or unintentional, authorized or unauthorized, justified or unjustified. The number of exceptions to the policy can indicate how well the policy is understood, communicated, implemented, and enforced within the organization. The number of exceptions to the policy can also indicate how well the policy reflects the current and future business needs and expectations, and how flexible and adaptable the policy is to the changing business environment. A low number of exceptions to the policy can suggest that the policy is well aligned to the business requirements, while a high number of exceptions to the policy can suggest that the policy is misaligned or outdated, and may need to be reviewed or revised. References = Key Performance Indicator (KPI): Definition, Types, andExamples, Business KPIs: 5 important characteristics to be effective, What is a KPI? How To Choose the Best KPIs for Your Business - HubSpot Blog.

Automated information security controls are controls that are implemented or executed by software or hardware, without human intervention, to protect the confidentiality, integrity, and availability of information and systems1. Examples of automated information security controls include firewalls, antivirus software, encryption, authentication, and logging2. The effectiveness of automated information security controls refers to how well they achieve their intended objectives and outcomes, such as preventing, detecting, or responding to security threats or incidents3. The best way to measure the effectiveness of automatedinformation security controls prior to going live is to test them in a non-production environment, which is an environment thatsimulates the production environment, but does not contain real or sensitive data orsystems4. Testing in a non-production environment allows the organization to verify the proper and consistent configuration, functionality, and performance of the automated information security controls, without affecting the normal operations or risking the exposure of the data or systems5. Testing in a non-production environment also enables the organization to identify andresolve any issues or gaps in the automated information security controls, and to evaluate their compatibility and interoperability with other systems or controls6. Performing a security control review, reviewing the security audit report, and conducting a risk assessment are not the best ways to measure the effectiveness of automated information security controls prior to going live, as they do not provide direct and timely information on the configuration, functionality, and performance of the automated information security controls. Performing a security control review is a process that involves checking and verifying that the organization’s security controls are up to date, relevant, and effective7. A security control review can help to identify and address any issues or gaps in the security controls, but it does not show the actual behavior and results of the automated information security controls in a realistic environment. Reviewing the security audit report is a process that involves reading and analyzing the findings and recommendations of an independent examination and evaluation of the organization’s security controls8. A security audit report can help to provide assurance and advice on the adequacy and effectiveness of the security controls, but it does not show the current and dynamic status and performance of the automated information security controls in a changing environment. Conducting a risk assessment is a process that involves identifying, analyzing, and evaluating the risks and their potential impacts on the organization’s objectives and performance. A risk assessment can help to anticipate and prepare for the risks that may affect the organization’s security, but it does not show the actual impact and outcome of the automated information security controls in a specific scenario. References = 1: Automation Support for Security Control Assessments - NIST2: Automated Security Control Assessment: When Self-Awareness Matters3: Technology Control Automation: Improving Efficiency, Reducing … - ISACA4: [What is a Non-Production Environment? | Definition and FAQs] 5: [Why You Need a Non-Production Environment - Plutora] 6: [Testing Automated Security Controls - SANS Institute] 7: A brief guide to assessing risks and controls | ACCA Global8: IT Risk Resources | ISACA : [Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Assessment, Section 2.1: Risk Identification, pp. 57-59.]

Key risk indicators (KRIs) are metrics that provide information on the level of exposure to a given risk. Key control indicators (KCIs) are metrics that measure the performance or effectiveness of a control in mitigating a risk. KCIs provide input for KRIs, because they help to assess the residual risk after applying the control. For example, if the KRI is the number of security incidents, and the KCI is the percentage of incidents detected by the intrusion prevention system (IPS), then the KCI provides input for the KRI by showing how well the IPS is reducing the risk of security breaches. References = CRISC: Certified in Risk & Information Systems Control Sample Questions

Assigning ownership to each risk scenario is fundamental in risk management. Without designated owners, there is a lack of accountability, which can lead to risks not being adequately managed or mitigated. The absence of assigned owners means that no one is responsible for monitoring, reporting, or addressing the risk, increasing the likelihood of adverse outcomes.

The greatest concern when assessing the risk profile of an organization is that the risk profile was last reviewed two years ago. A risk profile is a snapshot of the current risk exposure and appetite of the organization, based on the identification, analysis, and evaluation of the risks that could affect the achievement of the organization’s objectives. A risk profile should be reviewed and updated regularly, atleast annually, or whenever there are significant changes in the internal or external environment, such as new projects, strategies, regulations, or incidents. A risk profile that was last reviewed two years ago may not reflect the current risk situation and status of the organization, and may lead to inaccurate or incomplete risk assessment and response. The risk profile not being updated after a recent incident, the risk profile being developed without using industry standards, and the risk profile not containing historical loss data are also concerns, but they are not as critical as the risk profile being outdated. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 48.

A root cause analysis is a process of identifying and understanding the underlying or fundamental causes or factors that contribute to or result in a problem or incident that has occurred or may occur in the organization. A root cause analysis can provide useful insights and solutions on the origin and nature of the problem or incident, and prevent or reduce its recurrence or impact.

Performing a root cause analysis is the risk practitioner’s best recommendation when the number of tickets to rework application code has significantly exceeded the established threshold, because it can help the organization to address the following questions:

Why did the application code require rework?

What were the errors or defects in the application code?

How did the errors or defects affect the functionality or usability of the application?

Who was responsible or accountable for the application code development and testing?

When and how were the errors or defects detected and reported?

What were the costs or consequences of the rework for the organization and its stakeholders?

How can the errors or defects be prevented or minimized in the future?

Performing a root cause analysis can help the organization to improve and optimize the application code quality and performance, and to reduce or eliminate the need for rework. It can also help the organization to align the application code development and testing with the organization’s objectives and requirements, and to comply with the organization’s policies and standards.

The other options are not the risk practitioner’s best recommendations when the number of tickets to rework application code has significantly exceeded the established threshold, because they do not address the main purpose and benefit of performing a root cause analysis, which is to identify and understand the underlying or fundamental causes or factors that contribute to or result in the problem or incident.

Performing a code review is a process of examining and evaluating the application code for its quality, functionality, and security, using the input and feedback from the peers, experts, or tools. Performing a code review can help the organization to identify and resolve the errors or defects in the application code, but it is not the risk practitioner’s best recommendation, because it doesnot indicate why the application code required rework, and how the errors or defects affected the organization and its stakeholders.

Implementing version control software is a process of using a software tool to manage and track the changes and modifications to the application code, and to ensure the consistency and integrity of the application code. Implementing version control software can help theorganization to control and monitor the application code development and testing, but it is not the risk practitioner’s best recommendation, because it does not indicate why the application code required rework, and how the errors or defects affected the organization and its stakeholders.

Implementing training on coding best practices is a process of providing and facilitating the learning and development of the skills and knowledge on the principles, guidelines, and standards for the application code development and testing. Implementing training on coding best practices can help the organization to enhance the competence and performance of the application code developers and testers, but it is not the risk practitioner’s best recommendation, because it does not indicate why the application code required rework, and how the errors or defects affected the organization and its stakeholders. 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 189

CRISC Practice Quiz and Exam Prep

A key control indicator (KCI) is a metric that provides information on the extent to which a given control is meeting its intended objectives in terms of loss prevention, reduction, etc. A KCI should have an explicit relationship to both the specific control and the specific risk against which the control has been implemented. For risk related to IT infrastructure failure, a possible control is to have a recovery plan that can restore the critical IT services and minimize the impact of the failure. A KCI that can measure the effectiveness of this control is the number of successful recovery plan tests, which indicates how well the recovery plan can be executed in a real scenario. The higher the number of successful tests, the lower the risk of IT infrastructure failure. Therefore, this is the best KCI among the given options. References =

Integrating KRIs and KPIs for Effective Technology Risk Management

Key Control Indicator (KCI) - CIO Wiki

Infrastructure Issues: Understanding and Mitigating Risks

A risk treatment plan (sometimes called a risk response plan) describes how selected risk treatments will be implemented, by whom, and by when. For the plan to be actionable and enforceable, every significant risk and its treatment must have a clearly assigned risk owner.

CRISC guidance emphasizes that:

Accountability for risk treatment lies with the risk owner.

A risk treatment plan primarily provides treatment for identified risk that exceeds risk tolerance and should specify responsibility for implementing the chosen risk treatment.

Ensuring accountability and ownership is critical for the effectiveness of the risk management program.

While items such as financial impact and risk register references are useful supporting information, the one element that must be present for each treated risk is the person or role responsible for making sure the treatment is implemented and monitored.

Therefore:

A. Risk owner — REQUIRED in every risk treatment plan entry.

B. “Senior management” is too generic; they may approve the plan but are not always the specific treatment owners.

C. “Risk register details” are normally linked to or referenced, but they are not the key must-have field for effective execution.

D. “Risk financial impact” is important for prioritization and cost–benefit analysis, but without an owner, nothing guarantees action.

This is consistent with CRISC’s treatment-plan guidance that risk treatment plans “primarily specify the responsibility for implementing the chosen risk treatment and provide treatment for identified risk that exceeds risk tolerance.”

New threat intelligence primarily impacts the frequency component of risk calculations.

CRISC states:

“When new information about threats is available, it must be incorporated into risk assessment by adjusting threat event frequencies in related scenarios.”

A and D are statistical manipulations, not practical first steps.

C addresses impact, not likelihood.

Hence, B. Revise the threat frequency is correct.

CRISC Reference: Domain 2 – IT Risk Assessment, Topic: Incorporating Threat Intelligence.

When a new regulation affects outsourcing arrangements, the first and best response is to perform a gap analysis.

“Upon regulatory change, the risk practitioner should perform a gap analysis to determine areas of noncompliance and required updates in contracts or controls.”

Transferring or terminating agreements may follow depending on results.

Hence, A is correct.

CRISC Reference: Domain 3 – Risk Response and Mitigation, Topic: Third-Party Risk and Compliance Management.

A comparison of current risk levels with established tolerance is the most useful information for senior management when determining an appropriate risk response, as it shows the gap between the actual risk exposure and the desired risk exposure of the enterprise. This gap indicates the need and urgency for risk response actions, and helps senior management to prioritize and allocate resources for risk mitigation. A comparison of current risk levels with established tolerance also reflects the effectiveness of the existing risk management process and controls, and enables senior management to monitor and adjust the risk strategy and objectives accordingly. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, Question 234. CRISC by Isaca Actual Free Exam Q&As, Question 9. CRISC: Certified in Risk & Information Systems Control Sample Questions, Question 234. CRISC Sample Questions 2024, Question 234.

 The first step when developing a business case to drive the adoption of a risk remediation project by senior management is to identify the objectives of the project. The objectives are the specific, measurable, achievable, relevant, and time-bound (SMART) goals that the project aims to accomplish. The objectives should be aligned with the organization’s vision, mission, and strategy, as well as the identified business problem or opportunity. The objectives should also reflect the expected benefits and outcomes of the project, such as reducing the risk exposure, enhancing the security posture, or improving the business performance. Identifying the objectives is the first step because it provides the direction, scope, and justification for the project, and it serves as the basis for evaluating the alternative solutions, estimating the costs and benefits, and communicating the value proposition to the senior management and other stakeholders. The other options are not the first step, although they may be subsequent or concurrent steps in the business case development process. Calculating the cost is a part of the financial analysis, which estimates the total expenditure and funding sources of the project, but it does not define the purpose or the scope of the project. Analyzing cost-effectiveness is a part of the economic analysis, which compares the costs and benefits of the alternative solutions and recommends the optimal one, but it does not specify the goals or the criteria of the project. Determining the stakeholders is a part of the stakeholder analysis, which identifies and assesses the interests, expectations, and influence of the parties involved in or affected by the project, but it does not establish the objectives or the rationale of the project. References = Business case: 7 key steps to build it and use it - Twproject: project …, Guide to developing the Project Business Case - GOV.UK, How to Write a Business Case: Template & Examples | Adobe Workfront

A cause-and-effect diagram, also known as a fishbone diagram or an Ishikawa diagram, is a graphical tool that helps to identify and analyze the potential causes and effects of a problem or an event. A cause-and-effect diagram can be used to develop technical risk scenarios related to a recently developed ERP system, because it can help to:

Break down the complex problem or event into manageable and measurable categories and subcategories of causes and effects

Visualize the relationships and interactions among the various factors that contribute to the problem or event

Identify the root causes and the most significant effects of the problem or event

Generate ideas and hypotheses for testing and validating the problem or event

Communicate and present the problem or event clearly and logically to the stakeholders1

A cause-and-effect diagram can be constructed by following these steps:

Define the problem or event and write it in a box on the right side of the diagram

Draw a horizontal line from the box to the left side of the diagram, representing the main spine of the fishbone

Identify the major categories of causes that affect the problem or event, such as people, process, technology, environment, etc., and write them on the branches of the spine

For each category, brainstorm and list the possible subcategories and specific causes that influence the problem or event, and write them on the sub-branches of the spine

For each cause, identify and list the possible effects or consequences that result from the problem or event, and write them on the sub-sub-branches of the spine

Analyze the diagram and prioritize the causes and effects based on their frequency, severity, and controllability

Develop technical risk scenarios based on the most critical causes and effects, and describe how they could affect the ERP system and the organization1

The main goal of updating a risk awareness program in response to rising threats is to ensure employees understand new risks and how to respond to them, thereby enhancing overall security posture.

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.

The best recommendation to reduce the risk associated with potential system compromise when a vendor stops releasing security patches and updates for a business-critical legacy system is to segment the system on its own network. Network segmentation is the process of dividing a network into smaller subnetworks or segments, based on different criteria, such as function, location, or security level. Network segmentation helps to isolate the system from the rest of the network, and limit the exposure and access to the system. Network segmentation also helps to improve the performance and security of the network, by reducing the network traffic and congestion, and enhancing the monitoring and control capabilities. The other options are not as effective as segmenting the system on its own network, although they may provide some additional protection or recovery options. Ensuring regular backups take place, virtualizing the system in the cloud, and installing antivirus software on the system are all measures that can helpto reduce the risk of data loss or system damage, but they do not address the root cause of the risk, which is the lack of security patches and updates for the system. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.2.1, page 3-11.

A balanced scorecard is a strategic management tool that helps to measure and communicate the performance of an organization or a program against its goals and objectives. A balanced scorecard typicallyconsists of four perspectives: financial, customer, internal process, and learning and growth. Each perspective has a set of key performance indicators (KPIs) that reflect the critical success factors and desired outcomes of the organization or the program1.

A balanced scorecard is most useful for reporting on the overall status and effectiveness of the IT risk management program, because it can provide a comprehensive and balanced view of the program’s performance across multiple dimensions. A balanced scorecard can help to align the IT risk management program with the business strategy and vision, and to demonstrate the value and impact of the program to the stakeholders. A balanced scorecard can also help to identify the strengths and weaknesses of the IT risk management program, and to monitor and improve the program’s processes and outcomes2.

The other options are not as useful as a balanced scorecard for reporting on the overall status and effectiveness of the IT risk management program. A capability maturity level is a measure of the maturity and quality of a process or a practice, based on a predefined set of criteria andstandards. A capability maturity level can help to assess and benchmark the IT risk management program’s processes and practices, but it does not provide a holistic view of the program’s performance and results3. An internal audit plan is a document that outlines the scope, objectives, and methodology of an internal audit activity. An internal audit plan can help to evaluate and verify the IT risk management program’s controls and compliance, but it does not provide a strategic view of the program’s goals and outcomes4. A control self-assessment (CSA) is a technique that involves the participation of the process owners and the staff in assessing the effectiveness and efficiency of their own controls. A CSA can help to enhance the awareness and ownership of the IT risk management program’s controls, but it does not provide an objective and independent view of the program’s performance and impact. References =

Balanced Scorecard Basics - Balanced Scorecard Institute

Using the Balanced Scorecard to Measure and Manage IT Risk

Capability Maturity Model Integration (CMMI) Overview

Internal Audit Planning: The Basics - The IIA

[Control Self-Assessment - ISACA]

Key performance indicators (KPIs) are metrics used to measure and evaluate the achievement of the organization’s objectives and strategies1. KPIs for critical IT assets are KPIs that focus onthe performance and value of the IT assets that are essential for the organization’s operations and functions2. KPIs for critical IT assets may include metrics such as availability, reliability, utilization, cost, and security of the IT assets3. The need to review and update KPIs for critical IT assets may be driven by various factors, such as changes in the business environment, customer expectations, or regulatory requirements. However, the most likely factor that would drive the need to review and update KPIs for critical IT assets is the outcomes of periodic risk assessments. A risk assessment is a process that involves identifying, analyzing, and evaluating the risks and their potential impacts on the organization’s objectives and performance4. A periodic risk assessment is a risk assessment that is performed at regular intervals, such as monthly, quarterly, or annually, to capture the changes and updates in the risk environment and the risk profile5. The outcomes of periodic risk assessments would most likely drive the need to review and update KPIs for critical IT assets, as they would provide insights into the current and emerging risks that may affect the performance and value of the critical IT assets, as well as the effectiveness and efficiency of the existingand planned controls and responses. By reviewing and updating the KPIs for critical IT assets based on the outcomes of periodic risk assessments, the organization can ensure that the KPIs are relevant, realistic, and aligned with the organization’s risk appetite and tolerance, and that they provide accurate and timely information for decision making and reporting. The outsourcing of related IT processes, changes in service level objectives, and findings from continuous monitoring are not the most likely factors that would drive the need to review and update KPIs for critical IT assets, as they do not provide the same level of information and impact as the outcomes of periodic risk assessments. The outsourcing of related IT processes is a decision that involves transferring some or all of the IT processes that support or enable the critical IT assets to an external service provider. The outsourcing of related IT processes may affect the performance and value of the critical IT assets, but it does not necessarily require a review and update of the KPIs for critical IT assets, as the KPIs may still be valid and applicable for the outsourced IT processes. Changes in service level objectives are changes in the expected or agreed level of quality or performance of the IT services that support or enable the critical IT assets. Changes in service level objectives may affect the performance and value of the critical IT assets, but they do not necessarily require a review and update of theKPIs for critical IT assets, as the KPIs may still be consistent and compatible with the changed service level objectives. Findings from continuous monitoring are the results or outcomes of the ongoing observation and measurement of the performance and compliance of the IT processes and systems that support or enable the critical IT assets. Findings from continuous monitoring may affect the performance and value of the critical IT assets, but they do not necessarily require a review and update of the KPIs for critical IT assets, as the KPIs may still be relevant and reliable for the continuously monitored IT processes and systems. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.2: Risk Monitoring, pp. 189-191.

The best tool to enable risk-based decision making in support of a business continuity plan (BCP) is an impact analysis. An impact analysis is a process of identifying and evaluating the potential effects of an interruption or disruption of business operations on the organization’scritical functions, processes, and resources. An impact analysis can help to determine the recovery priorities, objectives, and strategies forthe BCP. Control analysis, root cause analysis, and threat analysis are other possible tools, but they are not as effective as an impact analysis. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 12; CRISC Review Manual, 6th Edition, page 215.

IT control status reporting is the process of collecting and analyzing data about the effectiveness and efficiency of IT controls. IT controls are the policies, procedures, and practices that ensure the confidentiality, integrity, and availability of IT resources and information. IT control status reporting helps to monitor the performance of IT controls against the predefined objectives and criteria, and to identify any gaps or issues that need to be addressed. IT control status reporting also provides information to the stakeholders about the current status and progress of IT control implementation and improvement.

The primary purpose of IT control status reporting is to facilitate the comparison of the current and desired states of IT controls. This means that IT control status reporting helps to evaluate the gap between the actual and expected performance of IT controls, and to determine the actions and resources needed to close the gap. IT control status reporting also helps to align the IT controls with the business goals and strategies, and to ensure that the IT controls are delivering value to the organization. By comparing the current and desired states of IT controls, IT control status reporting enables continuous improvement and optimization of IT control processes and outcomes.

The other options are not the primary purpose of IT control status reporting, but rather some of the benefits or outcomes of it. IT control status reporting can help to ensure compliance with IT governance strategy,but it is not the main reason for doing it. IT governance is the framework that defines the roles, responsibilities, and relationships among the stakeholders involved in ITdecision making and oversight. IT control status reporting can support IT governance by providing relevant and reliable information to the stakeholders, and by demonstrating the accountability and transparency of IT control activities. However, IT control status reporting is not the same as IT governance, and it is not the only way to ensure compliance with IT governance strategy.

IT control status reporting can also assist internal audit in evaluating and initiating remediation efforts, but it is not the main objective of it. Internal audit is an independent and objective assurance and consulting activity that evaluates the adequacy and effectiveness of IT controls, and provides recommendations for improvement. IT control status reporting can provide input and evidence to the internal audit process, and help to identify the areas of IT control that need further review or testing. IT control status reporting can also help to monitor and track the implementation of the audit findings and recommendations, and to verify the results of the remediation efforts. However, IT control status reporting is not the same as internal audit, and it is not the only source of information for internal audit.

Finally, IT control status reporting can benchmark IT controls with industry standards, but it is not the main goal of it. Industry standards are the best practices or guidelines that define the minimum requirements or expectations for IT control performance and quality. IT control status reporting can help to compare the IT controls with the industry standards, and to identify the areas of IT control that need to be enhanced or updated. IT control status reporting can also help to demonstrate the compliance or conformance of IT controls with the industry standards, and to provide assurance to the external parties or regulators. However, IT control status reporting is not the same as industry standards, and it is not the only way to benchmark IT controls. References =

Service Reporting in ITIL: Process, Objectives and Examples - KnowledgeHut

Anatomy of an effective status report - Project Management Institute

How to Create a Project Status Report [Template & Examples]

Communicating Document Control Progress on a Project

[CRISC Review Manual, 7th Edition]

 The most effective way to promote organization-wide awareness of data security in response to an increase in regulatory penalties for data leakage is to require training on the data handling policy, as it educates the employees on the importance, requirements, and procedures of data protection, and enhances their knowledge and skills to prevent, detect, and respond to data leakage incidents. Enforcingsanctions for noncompliance with security procedures, conducting organization-wide phishing simulations, and requiring regular testing of the data breach response plan are not the most effective ways, as they are more related to the enforcement, evaluation, or improvement of the data security, respectively, rather than the promotion of the data security awareness. References = CRISC Review Manual, 7th Edition, page 155.

According to the CRISC Review Manual, conducting a business impact analysis (BIA) is the task that should be completed prior to creating a disaster recovery plan (DRP), because it helps to identify the critical business processes and resources, and their dependencies, that need to be recovered in the event of a disaster. The BIA also helps to determine the recovery timeobjectives (RTOs) and recovery point objectives (RPOs) for each business process and resource, which are the key inputs for the DRP. The other options are not the tasks that should be completed prior to creating a DRP, as they are part of the DRP itself. Identifying the recovery response team is the task of defining the roles and responsibilities of the personnel involved in the recovery process. Procuring a recovery site is the task of selecting and acquiring an alternative location where the business operations can be resumed. Assigning sensitivity levels to data is the task of classifying the data based on its importance and protection requirements. References = CRISC Review Manual, 7th Edition, Chapter 5, Section 5.2.1, page 237.

The data owner should be accountable for ensuring that media containing financial information are adequately destroyed per an organization’s data disposal policy, as they have the authority and responsibility to define the classification, retention, and disposal requirements for the data they own. The compliance manager, the data architect, and the chief information officer (CIO) are not the best choices, as they have different roles and responsibilities related to data governance, design, and strategy, respectively, but they do not own the data. References = CRISC Review Manual, 7th Edition, page 154.

Employee activity monitoring is the process of tracking and recording the actions and behaviors of employees on company owned IT systems, such as email, internet, applications, etc. Thepurpose of employee activity monitoring is to ensure compliance with the company’s policies and regulations, prevent data leakage and misuse, detect and deter inappropriate or malicious activities, and improve productivity and performance. The most likely way to deter an employee from engaging in inappropriate use of company owned IT systems is to communicate the employee activity monitoring policy and practice to the employees, and make them aware of the consequences of violating the policy. By doing so, the company can create a deterrent effect and discourage the employees from misusing the IT systems, as they know that their actions are being monitored and recorded, and that they will be held accountable for any misconduct. References = CRISC Review Manual, 7th Edition, page 181.

The business process owner is the stakeholder who is responsible for the business process that is supported by the IT system, such as the CRM system. The business process owner has the authority and accountability to manage the risk and its response associated with the business process and the IT system. The business process owner should own the risk of customer data leakage caused by insufficient IT security controls for the new system, as it directly affects the performance, functionality, and compliance of the business process. The other options are not the correct answer, as they involve different roles or responsibilities in the risk management process:

The chief information security officer is the senior executive who oversees the enterprise-wide information security program, and provides guidance and direction to the information security managers and practitioners. The chief information security officer may advise or support the business process owner in managing the risk of customer data leakage, but does not own the risk.

The chief risk officer is the senior executive who oversees the enterprise-wide risk management program, and provides guidance and direction to the risk managers and practitioners. The chief risk officer may advise or support the business process owner in managing the risk of customer data leakage, but does not own the risk.

The IT controls manager is the person who designs, implements, and monitors the IT controls that mitigate the IT risks, such as the IT security controls for the new system. The IT controls manager may advise or support the business process owner in managing the risk of customer data leakage, but does not own the risk. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 3, Section 3.1.1.1, pp. 95-96.

 A cost-benefit analysis is a tool that compares the costs and benefits of different alternatives, such as updating software or continuing to use end-of-life software. A cost-benefit analysis can provide the mosthelpful information to justify investing in updated software, as it can show the potential savings, benefits, and risks of each option, and help the decision-makers choose the best course of action. A cost-benefit analysis can also include qualitative factors, such as security, compliance, performance, and customer satisfaction, that may be affected by the software update. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, Question 231. CRISC by Isaca Actual Free Exam Q&As, Question 8. CRISC: Certified in Risk & Information Systems Control Sample Questions, Question 231. CRISC Certified in Risk and Information Systems Control – Question231.

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 woulddisregard 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

ï‚· Understanding the Question:

The question asks what the most important update for keeping the risk register current is.

ï‚· Analyzing the Options:

A. Modifying organizational structures when lines of business merge:Reflects significant changes in the organization that impact risk profiles.

B. Adding new risk assessment results annually:Important but periodic.

C. Retiring risk scenarios that have been avoided:Necessary but not as impactful as major organizational changes.

D. Changing risk owners due to employee turnover:Important but secondary to major structural changes.

ï‚·

Organizational Changes:When lines of business merge, it can significantly alter the risk landscape, introducing new risks and changing the impact and likelihood of existing ones. Updating the risk register to reflect these changes is crucial for accurate risk management.

Impact on Risk Profiles:Mergers and acquisitions can affect every aspect of an organization, from operational processes to regulatory compliance, making it essential to update the risk register accordingly.

During an initial risk assessment, it is crucial to consider existing controls primarily to determine the current risk level. Here's a

Understanding Existing Controls:

Existing controls are measures already in place to mitigate risks. These controls can include technical, administrative, and physical safeguards designed to protect organizational assets.

Knowing what controls are currently in place helps to understand the organization’s current defense mechanisms against potential threats.

Assessing the Current Risk Level:

The current risk level is the risk that remains after considering the effectiveness of existing controls, often referred to as residual risk.

By evaluating these controls, one can determine how much risk is actually mitigated and what level of risk remains.

For instance, if an organization has implemented firewalls and intrusion detection systems, these controls would reduce the risk of cyber attacks. The effectiveness of these controls will determine the residual risk level.

Differentiating Between Risk Types:

Inherent Risk:This is the level of risk that exists before any controls are applied. It’s the raw risk associated with a particular asset or process.

Residual Risk:This is the risk that remains after existing controls have been applied. It's the actual risk that an organization faces after mitigation efforts.

Current Risk:This term is often used interchangeably with residual risk but focuses on the risk level at the present moment, considering the existing controls.

Primary Objective in Initial Risk Assessment:

The primary objective of considering existing controls during the initial risk assessment is to gain an accurate picture of the current risk landscape. This allows risk practitioners to understandwhat additional controls or modifications might be needed to further reduce risk to acceptable levels.

Without considering existing controls, the assessment would only reflect the inherent risk, which doesn’t provide a realistic view of the organization's risk exposure.

Conducting regular independent reviews will provide the best measure of compliance with IT policies, as this ensures that the policies are implemented and followed consistently and effectively across the organization. Independent reviews can also identify any gaps, weaknesses, or violations in the compliance process, and recommend corrective actions or improvements.Independent reviews can be performed by internal or external auditors, regulators, or consultants, depending on the scope and purpose of the review. Evaluating past policy review reports, performing penetration testing, and testing staff on their complianceresponsibilities are not the best measures of compliance with IT policies, although they may be useful or complementary methods. Evaluating past policy review reports can provide some historical and comparative data, but it may not reflect the current or accurate situation of the compliance status. Performing penetration testing can assess the security and vulnerability of the IT systems and networks, but it does not measure the compliance with all the IT policies, such as those related to governance, operations, or quality. Testing staff on their compliance responsibilities can evaluate the awareness and knowledge of the staff, but it does not measure the actual behaviour or performance of the staff in complying with the IT policies. References = Risk and Information Systems Control Study Manual, Chapter 5: Risk and Control Monitoring and Reporting, page 187.

Risk mitigation procedures are the actions and plans that an organization implements to reduce the likelihood and impact of identified risks. Risk mitigation procedures should include the deployment of counter measures, which are the specific controls or solutions that address the root causes or sources of the risks, and prevent or minimize the potential losses or damages. For example, a counter measure for therisk of data breach could be encrypting the data or implementing a firewall. The deployment of counter measures should be based on a cost-benefit analysis, a risk assessment, and a risk response strategy. The other options are not necessarily part of risk mitigation procedures. Buying an insurance policy is an example of risk transfer,which is a risk response strategy that shifts the responsibility or burden of the risk to another party, such as an insurer or a vendor. However, risk transfer does not eliminate or reduce the risk itself, and it may involve additional costs or conditions. Acceptance of exposures is an example of risk acceptance, which is a risk response strategy that acknowledges the existence and consequences of the risk, and decides not to take any action to change the risk situation. However, risk acceptance does not mitigate the risk, and it may require contingency plans or reserves to deal with the potential outcomes. Enterprise architecture implementation is an example of a business process or project that may involve or create risks, but it is not a risk mitigation procedure itself. Enterprise architecture is the design and structure of an organization’s IT systems, networks, and resources, and how they align with the organization’s goals and strategies. Enterprise architecture implementation may require risk management activities, such as risk identification, assessment, and response, but it is not a risk mitigation procedure itself. References = Risk IT Framework, ISACA, 2022, p. 151

A compliance-based CSA focuses on ensuring that the business unit follows the policies and procedures established by the enterprise, regardless of the actual risk level or impact of the controls.

A risk-based CSA focuses on identifying and evaluating the risks that may affect the business unit’s objectives, and designing and implementing controls that are appropriate to mitigate those risks.

A compliance-based CSA may not capture all the high-risk issues that exist in a business unit, especially if they are not aligned with the enterprise’s standards or expectations.

A risk-based CSA may identify more high-risk issues than a compliance-based CSA, because it considers both internal and external factors that may affect the business unit’s performance or security.

Therefore, a difference in results between a previous control self-assessment (CSA) and an audit indicates that either one of them was not risk-based, but rather compliance-based.

The references for this answer are:

Risk IT Framework, page 9

Information Technology & Security, page 3

Risk Scenarios Starter Pack, page 1

Participation in the risk assessment may constitute a conflict of interest, because it may create a situation where the risk practitioner’s personal or professional interests or relationships interfere with their objectivity, independence, or impartiality in conducting the risk assessment. A conflict of interest is a type of risk that may compromise the integrity, quality, or validity of the risk assessment process and outcomes, and may damage the reputation or trust of the risk practitioner or the organization. A conflict of interest may arise when the risk practitioner has a direct or indirect connection or involvement with the subject or stakeholder of the risk assessment, such as a previous or current role, responsibility, or relationship, that may influence or bias theirjudgment or decision. Participation in the risk assessment may constitute a conflict of interest, as the risk practitioner may have a prior or residual interest or loyalty to the financialprocess team or the new critical application, and may not be able to assess the risk in a fair and unbiased manner.

The risk assessment team being overly confident of its ability to identify issues, the risk practitioner being unfamiliar with recent application and process changes, and the risk practitioner still having access rights to the financial system are all possible concerns with the request, but they are not the greatest concern, as they do not necessarily imply a conflict of interest, and they may be mitigated or resolved by other means, such as training, documentation, or review.

The risk practitioner should report that the associated risk has been deferred, as this means that the risk response has been postponed or delayed due to lack of resources or other constraints. Deferring a risk response implies that the risk owner acknowledges the risk and intends to implement the risk mitigation action plan at a later stage, when the resources or conditions are available. The other options are not correct, as they do not reflect the actual status of the risk response. Mitigating a risk means that the risk response has been implemented and the risk level has been reduced. Accepting a risk means that the risk response has been rejected or waived, and the risk level has been accepted as it is. Avoiding a risk means that the risk response has beenimplemented and the risk level has been eliminated or transferred. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk Response, page 146.

According to the CRISC Review Manual1, data selection is the process of choosing the appropriate data sources and variables for data analysis. Data selection is the most critical step in data analytics, as it determines the quality and validity of the results and insights derived from the analysis. Incorrect data selection is the greatest risk associated with the use of data analytics, as it can lead to inaccurate, incomplete, irrelevant, or biased outcomes that can adversely affectthe decision making and performance of the organization. Incorrect data selection can also cause legal, regulatory, ethical, or reputational issues for the organization, if the data used for analysis is not authorized, reliable, or compliant. References = CRISC Review Manual1, page 255.

A risk is the possibility of an event that may have a negative impact on the achievement of an organization’s objectives. A risk can be measured by the probability and impact of the event, which indicate the likelihood and consequence of the event. A risk manager is a person who is responsible for performing risk management activities, such as identifying, analyzing, evaluating, treating, monitoring, and communicating risks. When an organization retains footage from its data center security camera for 30 days when the policy requires 90-day retention, the risk manager’s best response to the business owner who challenges whether the situation is worth remediating is to evaluate the risk as a measure of probable loss, which means to estimate thepotential harm or damage that may result from the non-compliance with the policy. By evaluating the risk as a measure of probable loss, the risk manager can provide the business owner with the rationale and justification for the risk remediation, and help the business owner to understand the cost-benefit analysis of the risk response. References = CRISC Review Manual, 7th Edition, page 63.

 The best key performance indicator (KPI) to measure the effectiveness of a disaster recovery test of critical business processes is the percentage of processes recovered within the recovery time and point objectives. Recovery time objective (RTO) is the maximum acceptable time period within which a business process or an IT service must be restored after a disruption. Recovery point objective (RPO) is the maximum acceptable amount of data loss measured in time before the disruption. The percentage of processes recovered within the RTO and RPO indicates how well the disaster recovery test meets the business continuity and recoveryrequirements and expectations, and how effectively the disaster recovery plan and procedures are executed. The percentage of processes recovered within the RTO and RPO canalso help to identify the gaps, weaknesses, and opportunities for improvement in the disaster recovery capabilities. Percentage of job failures identified and resolved during the recovery process, number of current test plans and procedures, and number of issues and action items resolved during the recovery test are not as good as the percentage of processes recovered within the RTO and RPO, as they do not directly measure the achievement of the recovery objectives, and may not reflect the actual impact and performance of the disaster recovery test. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 130.

Ethics committees are typically responsible for developing, implementing, and overseeing an organization’s ethical guidelines and policies. They play a crucial role in mitigating ethical risk by ensuring that the organization’s operations align with its ethical standards123.

References

1What Is Ethically Informed Risk Management? - Journal of Ethics

2Five Ways to Reduce Ethics and Compliance Risk - Free Ethics Toolkit

35 Ways to Manage Ethical Risks - ClearRisk

Thefirst line of defenseincludesbusiness and operational managerswho own and manage risks directly. They implement controls as part of their day-to-day duties, making them the first to respond to risk.

The main purpose of a Key Risk Indicator (KRI) is to provide early warning of increased risk exposure tied to specific risk scenarios.

CRISC defines KRIs as:

“Metrics that provide a signal of increasing risk exposure in relation to defined risk scenarios.”

Performance (A) is tracked via KPIs; threat measurement (C) is only one input.

Hence, B. Assess the risk associated with risk scenarios is correct.

CRISC Reference: Domain 4 – Risk and Control Monitoring and Reporting, Topic: Designing and Using KRIs.

Classifying information assets is a process of identifying and categorizing the data and information resources that are owned, controlled, or used by an organization, based on their value, sensitivity, and criticality.

Classifying information assets helps to determine the appropriate level of control that is needed to protect them from unauthorized access, use, disclosure, modification, or destruction. Control level refers to the degree of protection or assurance that a control provides against a risk.

Classifying information assets also helps to communicate risk to senior management, assign risk ownership, and facilitate internal audit. These are other benefits of risk management that are not directly related to determining the appropriate level of control.

The references for this answer are:

Risk IT Framework, page 11

Information Technology & Security, page 5

Risk Scenarios Starter Pack, page 3

The effective implementation of a risk treatment plan is best indicated by managing residual risk within the organization’s appetite and tolerance levels. Residual risk is the remaining risk aftercontrols have been applied, and ensuring it is within acceptable levels demonstrates that the risk treatment plan is effective.

Managing Residual Risk within Appetite and Tolerance (Answer B):

Definition: Residual risk is the risk remaining after risk treatment measures have been implemented.

Significance: Managing residual risk within the set appetite and tolerance levels shows that the implemented controls are effective and aligned with the organization’s risk management objectives.

Outcome: It ensures that the organization's risk exposure is kept within acceptable boundaries, thereby protecting its assets and operations.

Comparison with Other Options:

A. Inherent risk is managed within an acceptable level:

Definition: Inherent risk is the risk before any controls are applied.

Limitation: The focus should be on residual risk post-treatment.

C. Risk treatments are aligned with industry peers:

Purpose: While benchmarking is useful, it does not directly indicate the effectiveness of risk treatment.

D. Key controls are identified and documented:

Purpose: Identifying and documenting controls is necessary, but effectiveness is shown by managing residual risk.

Inherent risk rating is a measure of the natural level of risk that is part of an application, before any controls are applied1. Inherent risk rating helps to identify and prioritize the applications that pose the highest risk to the organization and require the most attention and resources for risk management2. The responsibility for determining the inherent risk rating of an application should belong to the risk practitioner, as they have the expertise and knowledge to perform a comprehensive and consistent risk assessment of the application, using a standard methodologyand criteria3. The risk practitioner should also communicate and report the inherent risk rating of the application to the relevant stakeholders, such as the application owner, senior management, and business process owner, and provide recommendations for risk mitigation4. The application owner, senior management, and business process owner are not the best choices for determining the inherent risk rating of an application, as they may not have the same level of skill and objectivity as the risk practitioner. The application owner is the person who has the authority and accountability for the application and its performance5. The application owner may be involved in providing input and feedback to the risk practitioner during the risk assessment process, but they may not be able to assess the inherent risk rating of the application independently and impartially, as they may have a vested interest in the application’s success and reputation6. Senior management is the group of executives who set the strategic direction and objectives of the organization and oversee its performance7. Senior management may be involved in approving and endorsing the risk assessment process and its results, but they may not be able to assess the inherent risk rating of the application in detail and depth, as they may have a broader and higher-level perspective of the organization’s risk profile and priorities8. The business process owner is the person who has the authority and accountability for a business process that is supported or enabled by the application. The business process owner may be involved in providing input and feedback to the risk practitioner during the risk assessment process, but they may not be able to assess the inherent risk rating of the application accuratelyand comprehensively, as they may have a limited and specific view of the application’s functionality and value. References = 2: Introduction toapplication risk rating & assessment | Infosec3: Application Security Risk: Assessment and Modeling - ISACA4: Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.2: Risk Monitoring, pp. 189-191.1: Inherent Risk Rating - Shared Assessments - Third Party Risk Management5: [Application Owner - Gartner IT Glossary] 6: Perform Inherent Risk Analysis - Oracle7: [Senior Management - Definition, Roles and Responsibilities] 8: Rating Inherent and Residual Risk - Barn Owl : [Business Process Owner - Gartner IT Glossary] : [Business Process Owner - Roles and Responsibilities]

The board of directors’ response to identified risk factors is the best indicator of the risk appetite of an organization. The board of directors is the highest governing body of the organization, and it is responsible for setting the strategic direction, objectives, and risk appetite of the organization. The board of directors should also oversee the risk management process, and ensure that the risks are aligned with the organization’s goals and values. The board of directors’ response to identified risk factors reflects how much and what type of risk the organization is willing to pursue, retain, or take in order to achieve its objectives. The regulatory environment, the risk management capability, and the importance assigned to IT are not direct indicators of the risk appetite, although they may influence or constrain it. References = Risk and Information Systems Control Study Manual, Chapter 1, Section 1.2.1, page 1-8.

The most important factor for successful incident response is the timeliness of attack recognition. Incident response is the process of detecting, analyzing, containing, eradicating, recovering, and reporting on security incidents that could affect the organization’s IT systems or data. The timeliness of attack recognition is the speed and accuracy with which the organization can identify and confirm that an attack has occurred or is in progress. The timeliness of attack recognition is crucial for successful incident response, as it affects the ability and effectiveness of the organization to respond to and mitigate the attack, and to minimize the damage and impact of the attack. The other options are not as important as the timeliness of attack recognition, although they may also contribute to or influence the incident response. The quantity of data logged by the attack control tools, the ability to trace the source of the attack, and the blocking of the attack route immediately are all factors that could help or hinder the incident response, but they are not the most important factor for successful incident response. References = CISA Review Manual, 27th Edition, Chapter 5, Section 5.4.1, page 5-32.

 Risk impact is the potential loss or damage that a risk event can cause to an organization. Risk impact can be expressed in qualitative or quantitative terms, such as financial, reputational, operational, or legal. A risk register is a tool that records and tracks the key information about the identified risks, such as their description, likelihood, impact, response, and status. A risk register helps an organization to monitor and manage its risks effectively and efficiently. When there is a change in the external or internal environment that affects the organization’s risks, such as new regulations, the risk register should be updated to reflect this change. The most important element of the risk register to update in this case is the risk impact, because the new regulations have significantly increased the penalties for data breaches, which means that the potential loss or damage that a data breach can cause to the organization has also increased. By updating the risk impact, the organization can reassess the severity and priority of the data breach risk, and adjust its risk response accordingly. The other elements of the risk register are less important toupdate in this case. The risk trend shows the direction and rate of change of the risk over time, which may or may not be affected by the new regulations. The risk appetite is the amount and type of risk that the organization is willing to accept in pursuit of its objectives, which is unlikely to change due to the new regulations. The risk likelihood is the probability of a risk event occurring, which is also independent of the new regulations. References = Risk IT Framework, ISACA, 2022, p. 131

An IT risk register is a document that records and tracks the significant IT risks that an organization faces across its various functions, processes, and activities. An IT risk register can help to provide a comprehensive and consistent view of the organization’s IT risk profile, and to support the decision making and reporting of the IT risk management function1.

One of the data that must be updated to maintain an IT risk register is the expected frequency and potential impact of each IT risk. The expected frequency is the probability or likelihood of the IT risk occurring, based on historical data, statistical analysis, expert judgment, or other methods. The potential impact is the magnitude or severity of the consequences or outcomes of the IT risk, measured in terms of cost, time, quality, reputation, or other criteria2.

Updating the expected frequency and potential impact of each IT risk is essential for maintaining an IT risk register, because it can help to:

Evaluate and prioritize the IT risks based on their risk level, which is calculated by multiplying the frequency and impact

Monitor and track the changes or trends in the IT risk exposure and performance over time

Identify and implement the appropriate risk response strategies and controls, based on the risk level and the risk appetite and tolerance of the organization

Report and communicate the IT risk status and progress to the stakeholders, using risk indicators, dashboards, or matrices3

The other options are not the data that must be updated to maintain an IT risk register, but rather the data that are used as inputs or outputs of the IT risk management process. Risk tolerance is the acceptable variation in the outcomes related to specific objectives or risks. Risk tolerance is used to measure the IT risk analysis and to guide the IT risk response. Enterprise-wide IT risk assessment is a process that identifies, analyzes, and evaluates the IT risks across theorganization. Enterprise-wide IT risk assessment is used topopulate the IT risk register and to inform the IT risk response. Risk appetite is the amount and type of risk that an organization is willing to accept in order to achieve its objectives. Risk appetite is used to guide the IT risk analysis and to align the IT risk response. References =

Risk Register - ISACA

Risk Analysis - ISACA

Risk Register 2021-2022 - UNECE

[How To Conduct Business Impact Analysis in 8 Easy Steps - G2]

[Risk Appetite and Risk Tolerance - ISACA]

[Enterprise Risk Assessment - ISACA]

[CRISC Review Manual, 7th Edition]

A vendor risk assessment is a process of evaluating and managing the risks associated with outsourcing IT services or functions to a third-party provider, such as a cloud service provider.

One of the most important documents to request from a cloud service provider during a vendor risk assessment is an independent audit report. This is a report that provides an objective and reliable assurance on the quality, security, and performance of the cloud service provider’s operations, processes, and controls, based on the standards and criteria established by an independent auditor or a recognized authority, such as ISACA, ISO, NIST, etc.

An independent audit report helps to verify the compliance and effectiveness of the cloud service provider’s risk management practices, identify any gaps or issues that may affect the service delivery or security, and recommend improvements or corrective actions.

The other options are not the most important documents to request from a cloud service provider during a vendor risk assessment. They are either secondary or not essential for vendor risk management.

The references for this answer are:

Risk IT Framework, page 22

Information Technology & Security, page 16

Risk Scenarios Starter Pack, page 14

The most important information to cover in a business continuity awareness training program for all employees of the organization is the communication plan. A communication plan is a document that defines the roles, responsibilities, procedures, and resources for communicating with the internal and external stakeholders before, during, and after a business continuity event. A communication plan helps to ensure that the relevant and accurate information is delivered to the appropriate parties in a timely and consistent manner, and that the feedback and responses are received and addressed accordingly. A communication plan also helps to maintain the trust, confidence, and reputation of the organization, and to comply with the legal or regulatory requirements. A communication plan is the most important information to cover in a business continuity awareness training program, because it helps to prepare and educate the employees on how to communicate effectively and efficiently in a business continuity event, and how to avoid or minimize the communication errors, gaps, or conflicts that could affect the business continuity performance and recovery. The other options are not as important as the communication plan, although they may also be covered in a business continuity awareness training program. Recovery time objectives (RTOs), segregation of duties, and critical asset inventory are all factors that could affect the business continuity planning and implementation, but they are notthe most important information to cover in a business continuity awareness training program. References = 6

IT disaster recovery point objectives (RPOs) should be based on the:

B. maximum tolerable loss of data.

RPOs are determined by how much data loss an organization can withstand in the event of a disaster. It’s a measure of the maximum age of files that an organization must recover from backup storage for normal operations to resume after a disaster. Therefore, RPOs are directly related to the maximum tolerable loss of data.

Automated IT asset management ensures real-time visibility and tracking of software usage, licensing, and compliance. It minimizes human error, improves audit readiness, and proactively addresses noncompliance risks.

Pre-production compatibility testing ensures patches won’t break applications or services, protecting availability—a key control objective outlined in ISACA’s guidance on Change and Configuration Management.

Greatest Privacy Risk:

Jurisdictional Challenges: Processing personal data in an offshore location often involves dealing with different legal and regulatory requirements, which can complicate compliance with data privacy laws such as GDPR or CPRA.

Data Transfer Risks: Even with a data sharing agreement, the protection and enforcement of privacy rights can be less stringent in the offshore location compared to the home jurisdiction. This can lead to increased risks of data breaches and misuse.

Enforcement Difficulties: If privacy violations occur, enforcing legal actions across borders can be challenging, potentially leading to inadequate redress for affected individuals.

Comparison with Other Options:

Privacy Risk Awareness Training Not Conducted: This is a significant risk but can be mitigated relatively quickly with proper training programs.

Privacy Not Incorporated into Risk Management Framework: While critical, the risk can be managed by integrating privacy into the framework without immediate severe consequences.

Remote Work by Staff with Access to Personal Data: This introduces risks related to secure access and data protection but can be managed with proper security controls.

Best Practices:

Data Sovereignty Considerations: Ensure data is processed in jurisdictions with strong privacy laws that align with the organization's regulatory requirements.

Regular Audits and Assessments: Conduct regular audits of data processing practices in offshore locations to ensure compliance with data privacy agreements.

Legal Safeguards: Establish robust legal safeguards and contracts to enforce data protection standards across jurisdictions.

The best indicator that additional or improved controls are needed in the environment is when risk events and losses exceed risk tolerance. Risk tolerance is the acceptable level of variation in performance or outcomes relative to the achievement of objectives. Risk events and losses are the negative consequences of risk that have occurred or are expected to occur. When risk events and losses exceed risk tolerance, it means that the existing controls are not sufficient or effective to prevent or mitigate the risk, and that the organization is exposed to unacceptable levels of risk that could impair its ability to achieve its objectives. Therefore, additional or improved controls are needed to reduce the risk to an acceptable level. Management decreasing organizational risk appetite, the risk register and portfolio not including all risk scenarios, and emerging risk scenarios being identified are not as clear and direct indicators that additional or improved controls are needed in the environment, as they do not necessarily reflect the actual performance or outcomes of the risk management process. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 41.

= Change management is the process of planning, implementing, and monitoring changes to IT systems, services, or infrastructure in a controlled and coordinated manner1. Change management controls are the policies, procedures, and tools that ensure changes are authorized, documented, tested, and reviewed before they are deployed to the production environment2.

Change-related exceptions are the deviations or violations from the established change management controls, such as unauthorized, untested, or failed changes3. Change-related exceptions pose a high risk to theorganization, as they can cause system instability, performance degradation, security breaches, data loss, or compliance issues3.

An increase in change-related exceptions per month would be the greatest concern for an IT risk practitioner, as it indicates a lack of effectiveness, efficiency, or compliance of the change management process and controls. An increase in change-related exceptions per month could result from:

Poor change planning, prioritization, or scheduling

Insufficient change approval, review, or communication

Inadequate change testing, validation, or verification

Lack of change monitoring, reporting, or auditing

Low change awareness, training, or support

An IT risk practitioner should investigate the root causes of the increase in change-related exceptions per month, and recommend corrective and preventive actions to improve the change management process and controls, such as:

Aligning the change management process with the organization’s goals, strategies, and risk appetite

Implementing a standardized and consistent change management methodology, such as ITIL or COBIT

Defining clear roles and responsibilities for change management stakeholders, such as change owners, change managers, change advisory boards, change implementers, and change users

Establishing clear and measurable criteria and thresholds for change authorization, classification, and evaluation

Leveraging tools and technologies to automate and streamline the change management process and controls, such as change management software, configuration management databases, or change management dashboards

Enhancing the change management culture and capabilities, such as change management awareness, training, support, or feedback

The other options are not as concerning as an increase in change-related exceptions per month, because they do not directly imply a risk to the organization’s IT systems, services, or infrastructure. Rolled backchanges below management’s thresholds, which are the changes that are reversed or undone due to errors, defects, or issues, may indicate a need for improvement in the change testing, validation, or verification processes, but they do not necessarily cause harm or damage to the production environment, as long as they are within the acceptable limits set bythe management. The average implementation time for changes, which is the duration of the change deployment process, may affect the organization’s agility, efficiency, or productivity, but it does not necessarily compromise the quality, security, or reliability of the changes, as long as they are implemented according to the change management controls. The number of user stories approved for implementation, which are the requirements or features that are expressed from the perspective of the end users, may reflect the organization’s demand, innovation, or customer satisfaction, but it does not necessarily increase the risk of the changes, as long as they are managed and controlled by the change management process.

References = What is Change Management? | ITIL | AXELOS, Change Management Controls: Definition, Types, and Best Practices, Change Management Exceptions: Definition, Causes, and Impacts, ITIL Change Management: Best Practices & Processes - BMC Software, COBIT 2019: Change Enablement

Production data is the data that is used in the actual operation of a system or application, such as customer information, financial records, transactions, etc.

Test data is the data that is used in the testing or development of a system or application, such as dummy data, sample data, simulated data, etc.

A risk practitioner has become aware of production data being used in a test environment. This indicates that there is a risk of unauthorized access, use, disclosure, modification, or destruction of the production data, which may affect the confidentiality, integrity, and availability of the data.

The primary concern of the risk practitioner in this situation is the sensitivity of the data. This means that the risk practitioner should assess how valuable, critical, or confidential the data is, and what would be the impact or consequence if the data is compromised or lost.

The sensitivity of the data helps to determine the level of protection and control that is needed to safeguard the data, and the priority and urgency of the risk response actions.

The other options are not the primary concerns of the risk practitioner in this situation. They are either secondary or not essential for data protection.

The references for this answer are:

Risk IT Framework, page 32

Information Technology & Security, page 26

Risk Scenarios Starter Pack, page 24

According to the CRISC Review Manual (Digital Version), threat analysis would be the most helpful when estimating the likelihood of negative events, as it involves identifying and evaluating the sources and causes of potential harm or loss to the IT assets and processes. Threat analysis helps to:

Determine the frequency and probability of occurrence of different types of threats, such as natural disasters, human errors, malicious attacks, system failures, etc.

Assess the impact and severity of the threats on the confidentiality, integrity and availability of the IT assets and processes

Prioritize the threats based on their likelihood and impact

Develop appropriate risk response strategies to prevent, mitigate, transfer or accept the threats

References = CRISC Review Manual (Digital Version), Chapter 1: IT Risk Identification, Section 1.5: IT Risk Identification Methods and Techniques, pp. 35-361

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

Key risk indicators (KRIs) are metrics that provide information on the level of exposure to a given risk. They enable ongoing monitoring of emerging risk by alerting the organization when the risk level exceeds thepredefined threshold or tolerance. By using KRIs, the organization can track the changes in the risk environment and take timely and appropriate actions to mitigate or avoid the risk.

Helping an organization identify emerging threats, benchmarking the organization’s risk profile, and identifying trends in the organization’s vulnerabilities are all possible uses of KRIs, but they are not the primary benefit. The primary benefit is to enable ongoing monitoring of emerging risk, which encompasses all these aspects and more. References = CRISC Review Manual, 7th Edition, ISACA, 2020, page 27-281

Risk appetite is the amount and type of risk that an organization is willing to accept in pursuit of its objectives. Risk appetite provides the most important information to facilitate a risk response decision, because it reflects the organization’s risk tolerance, preferences, and expectations, which guide the selection and implementation of the risk response strategies. Risk appetite helps the organization to balance the potential benefits and costs of taking risks, and to align the risk management process with the organizational strategy and culture. The other options are not as important as risk appetite, because they do not indicate the organization’s desired level of risk exposure, but rather provide supplementary or partial information for the risk response decision, as explained below:

A. Audit findings are the results and recommendations of the internal or external audit activities that evaluate the effectiveness and efficiency of the organization’s governance, risk management, and control processes. Audit findings provide useful information to facilitate a risk response decision, because they can identify the gaps or weaknesses in the current risk response strategies, and suggest corrective actions or improvements. However, audit findings do not indicate the organization’s risk appetite, which is the basis for determining the optimal risk response strategies.

C. Key risk indicators (KRIs) are metrics that measure the impact and likelihood of the risks, and provide early warning signs of changes in the risk exposure. KRIs provide useful information to facilitate a risk response decision, because they can monitor and report the performance and effectiveness of the current risk response strategies, and trigger corrective actions or adjustments.However, KRIs do not indicate the organization’s risk appetite, which is the basis for determining the acceptable level of risk exposure and performance.

D. Industry best practices are the standards, norms, and expectations for risk management that are established and followed by the peers or competitors in the same industry or sector. Industry best practices provide useful information to facilitate a risk response decision, because they can benchmark and compare the organization’s risk response strategies with those of the leading or successful organizations, and identify areas for improvement or innovation. However, industry best practices do not indicate the organization’s risk appetite, which is the basis for determining the unique and customized risk response strategies that suit the organization’s needs and goals. References = Risk and Information Systems Control Study Manual, Chapter 2, Section 2.2.2, page 40. Risk Appetite: What It Is and How to Use It, Risk Appetite: How Hungry Are You?, Risk Appetite: The Strategic Balancing Act

According to the ISACA Risk and Information Systems Control study guide and handbook, the most comprehensive approach to capture the risk scenario of collecting and storing credit card information is event tree analysis (ETA). ETA is a forward, top-down, logical modeling technique that explores the responses and outcomes of a single initiating event, such as a data breach or a cyberattack. ETA can help to identify all possible consequences of the scenario, such as financial losses, reputational damages, legal liabilities, regulatory penalties, and customer dissatisfaction. ETA can also help to assess the probabilities of the outcomes and the effectiveness of the controls and mitigation strategies12

1: ISACA Risk and Information Systems Control Study Guide, 4th Edition, page 33 2: ISACA Risk and Information Systems Control Handbook, 1st Edition, page 25

The risk associated with malicious functionality in outsourced application development is that the vendor may introduce unauthorized or harmful code into the enterprise’s system, which could compromise its security, integrity, or performance.

To mitigate this risk, the enterprise should perform an in-depth code review with an expert who can verify that the code meets the specifications, standards, and quality requirements, and that it does not contain any malicious or unwanted functionality.

A code review is a systematic examination of the source code of a software program, which can identify errors, vulnerabilities, inefficiencies, or deviations from best practices. A code review can also ensure that the code is consistent, readable, maintainable, and well-documented.

An expert is someone who has the knowledge, skills, and experience to perform the code review effectively and efficiently. An expert may be an internal or external resource, depending on the availability, cost, and independence of the reviewer.

A code review should be performed before the code is deployed to the production environment, and preferably at multiple stages of the development life cycle, such as design, testing, and integration.

A code review can also be complemented by other techniques, such as automated code analysis, testing, and scanning tools, which can detect common or known issues in the code. References =

ISACA, CRISC Review Manual, 7th Edition, 2022, p. 143

ISACA, CRISC Review Questions, Answers & Explanations Database, 2022, QID 143

Without monitoring, ineffective or failing controls may go unnoticed, leading to ahigher likelihood of risk eventsmaterializing, potentially with severe impact. This outweighs audit or KPI concerns.

A risk treatment plan typically includes the following elements2:

Risk description: A brief summary of the risk, its causes, and its consequences.

Risk owner: The person or entity who is responsible for managing the risk and implementing the risk treatment plan.

Risk response: The strategy or method chosen to deal with the risk, such as avoid, reduce, transfer, or accept.

Risk actions: The specific tasks or steps that need to be performed to execute the risk response.

Risk resources: The human, financial, technical, or other resources that are required or available to support the risk actions.

Risk timeline: The schedule or deadline for completing the risk actions and achieving the desired risk level.

By recommending a risk treatment plan, the risk practitioner can help the organization to:

Analyze and prioritize the vulnerabilities detected on the systems, and determine their impact and likelihood.

Evaluate and compare the possible risk responses, and select the most suitable and feasible one for each vulnerability.

Define and assign the roles and responsibilities for the risk treatment process, and ensure the accountability and collaboration of the stakeholders.

Monitor and measure the progress and effectiveness of the risk treatment process, and report the results and outcomes to the management.

The other options are not the best course of action, because:

Recommending the business change the application is not a realistic or practical option, as it may be costly, time-consuming, or technically challenging to modify the application to make it compatible with the updated servers. It may also create other issues or risks, such as compatibility problems with other systems, performance degradation, or user dissatisfaction.

Including the risk in the next quarterly update to management is not a proactive or timely option, as it may delay or defer the risk treatment process and increase the exposure or vulnerability of the systems. It may also indicate a lack of urgency or importance of the risk, and undermine the credibility or trust of the management.

Implementing compensating controls is not a sufficient or comprehensive option, as it may not address the root cause or the source of the risk. Compensating controls are alternative or additionalcontrols that are implemented when the primary or preferred controls are not feasible or effective3. They may reduce the impact or likelihood of the risk, but they may not eliminate or resolve the risk.

References =

Risk Treatment Plan - CIO Wiki

Risk Treatment Plan Template - ISACA

Compensating Control - CIO Wiki

Lack of common understanding of the organization’s risk culture is the greatest barrier to achieving the initiative’s objectives, because it hinders the alignment and integration of risk management across the organization. Risk culture is the set of shared values, beliefs, and behaviors that influence how risk is perceived and managed in an organization. A risk universe is a comprehensive and structured representation of all the sources and types of risk that an organization faces. Developing a risk universe requires a common understanding of the organization’s risk culture, as it affects the risk appetite, tolerance, and strategy of the organization. Lack of cross-functional risk assessment workshops, lack of quantitative methods to aggregate the total risk exposure, and lack of an integrated risk management system are all challenges that may affect thedevelopment of a risk universe, but they are not the greatest barrier, as they can be overcome with appropriate tools and techniques. References = Risk and Information Systems Control Study Manual, Chapter 2, Section 2.2.1, page 44

Determining the business purpose of the application is the first thing that a risk practitioner should do when a shadow IT application is identified in a business owner’s business impactanalysis (BIA), because it helps to understand the rationale and value of the application, and the potential risks and issues that it may introduce or affect. A shadow IT application is an IT system or application that is used by the business units or employees without the knowledge or approval of the IT department or management. A shadow IT application may offer benefits such as convenience, efficiency, or innovation, but it may also pose risks such as security breaches, data loss, compatibility issues, or regulatory non-compliance. A BIA is a process of analyzing the potential impact of disruption to the critical business functions or processes, and identifying the recovery priorities and requirements. A BIA may reveal the existence of ashadow IT application, as it may be used to support or enable a critical business function or process. Determining the business purpose of the application is the first thing to do, as it helps to evaluate the necessity and suitability of the application, and to plan the appropriate actions to address the shadow IT application. Including the application in the business continuity plan (BCP), segregating the application from the network, and reporting the finding to management are all possible things to do after determining the business purpose of the application, but they are not the first thing to do, as they depend on the results of the evaluation of the application. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.2.1, page 143

 A risk profile is a summary of the key risks that affect an organization, a business unit, a process, or a project. A risk profile can help stakeholders understand the current and potential exposure to various sources of uncertainty, and prioritize the risk response accordingly. Classification of risk profiles is the process of grouping and categorizing risks based on common characteristics, such as source, impact, likelihood, or response strategy. Classification of risk profiles can help communicate risk assessment results to stakeholders by providing a clear and consistent way of presenting and comparing risks across different domains, levels, or perspectives. Classification of risk profiles can also help identify patterns, trends, and interrelationships among risks, and facilitate the allocation of resources and responsibilities for risk management. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.1: Risk Profile, p. 193-195.

Implementing internal controls to address inadequate third-party controls is a risk mitigation strategy. It reduces risk by enhancing control effectiveness.

A risk mitigation action plan is a document that specifies the actions to be taken to address the identified risks, the resources required, the timelines, the owners, and the expected outcomes. The risk owner is the person who has the authority and accountability to manage the risk and its response. The risk practitioner is the person who supports the risk owner in the risk management process. The best course of action for the risk practitioner when the manager of a risk mitigation action plan is replaced and a new control is implemented is to communicate the decision to the risk owner for approval. This will ensure that the risk owner is aware of the change, agrees with the new control, and approves the modification of the action plan. The other options are not the best course of action, as they may not involve the risk owner, who is ultimately responsible for the risk and its response. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 3, Section 3.1.1.1, pp. 95-96.

The most important concern to address when formulating a social media policy to address information leakage is sharing company information on social media. Information leakage is the unauthorized or unintentional disclosure of confidential or sensitive information to unauthorized parties. Social media is a platform that enables the users to create and share content, such as text, images, videos, or links, with other users or the public. Sharing company information on social media is the most important concern, as it could expose the company’s trade secrets, intellectual property, customer data, financial data, or strategic plans to competitors, hackers, or regulators. Sharing company information on social media could also damage the company’s reputation, trust, or credibility, and result in legal or regulatory penalties, fines, or lawsuits. Therefore, a social media policy should clearly define what constitutes company information, and what are the rules and guidelines for sharing or not sharing company information on social media. A social media policy should also specify the roles and responsibilities of the employees, managers, and the social media team, and the consequences and sanctions for violating the policy. Sharing personal information on social media, using social media to maintain contact with business associates, and using social media for personal purposes during working hours are not as important as sharing company information on social media, as they do not directly involve the leakage of company information, and they may not have significant impact or risk on the company. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 217

When updating a risk register with the results of an IT risk assessment, the risk practitioner should log the known risk scenarios, because they are the risk scenarios that have been identified and assessed in the IT risk assessment process. The risk register should document and track the known risk scenarios, their characteristics, their status, and their responses. The other options are not the ones that should be logged, because:

Option A: High impact scenarios are the risk scenarios that have a high potential impact on the business objectives and processes, but they are not the only ones that should be logged. The risk register should include all the known risk scenarios, regardless of their impact level.

Option B: High likelihood scenarios are the risk scenarios that have a high probability of occurrence, but they are not the only ones that should be logged. The risk register should include all the known risk scenarios, regardless of their likelihood level.

Option C: Treated risk scenarios are the risk scenarios that have been addressed by the risk response actions, but they are not the only ones that should be logged. The risk register shouldinclude all the known risk scenarios, regardless of their treatment status. References = Risk and Information Systems Control Study Manual, 7th Edition, ISACA, 2020, p. 108.

A gap analysis is the process of comparing the current state of the organization’s compliance with the new regulation and the desired state of compliance. It helps to identify the gaps or deficiencies that need to be addressed and prioritize the actions to close them. Performing a gap analysis is the first step to understand the impact of the new regulation and plan the appropriate risk response.

References

•ISACA CRISC Review Manual, 7th Edition, Domain 2: IT Risk Assessment, Section 2.2.3: Gap Analysis

•Regulatory Change: Future of Risk in the Digital Era | Deloitte US

•Gap Analysis: What It Is and How to Perform One | The Blueprint

The most important factor when reporting to senior management on changes in trends related to IT risk is materiality. Materiality is the extent to which the information reported is significant, relevant, and useful for decision-making purposes. Materiality helps to prioritize the most important risks and communicate them effectively to senior management12

1: Integrating KRIs and KPIs for Effective Technology Risk Management - ISACA 2: CRISC Review Manual, 7th Edition, page 271

The most effective way to reduce risk associated with an increase of online transactions on a retailer website is to implement website activity monitoring. Website activity monitoring can help to detect and prevent fraudulent transactions, unauthorized access, data breaches, and other cyber threats that may compromise the security and integrity of the website and its data. Scalable infrastructure, a hot backup site, and transaction limits are other possible ways to reduce risk, but they are not as effective as website activity monitoring. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 7; CRISC Review Manual, 6th Edition, page 202.

Ongoing availability of data is the most important consideration when selecting key risk indicators (KRIs) to monitor risk trends over time, as it ensures that the KRIs can provide timely and reliable information on the current and future risk status and performance. KRIs are metrics that measure the level of risk exposureand the effectiveness of risk response strategies, and they should be aligned with the enterprise’s risk appetite and objectives. Ongoing availability ofdatameans that the data sources and collection methods for the KRIs are consistent, accessible, and sustainable, and that the data quality and integrity are maintained and verified. Ability to aggregate data, ability to predict trends, and availability of automated reporting systems are not the most important considerations, as they do not affect the validity and usefulness of the KRIs, but rather the presentation and analysis of the KRI data. References = CRISC Certified in Risk and Information Systems Control – Question213; ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 213.

Ensuring that database changes are correctly applied is the primary reason for monitoring activities performed in a production database environment, as it helps to maintain the integrity, availability, and performance of the database and the applications that depend on it. Database changes are any modifications made to the database structure, configuration, data, or code, such as adding or deleting tables, columns, indexes, or triggers, updating or inserting data, or altering stored procedures or functions. Database changes can have significant impacts on the database functionality and behavior, and may introduce errors, inconsistencies, or vulnerabilities if not applied correctly. Therefore, monitoring database changes is essential to verify that the changes are implemented as intended, comply with the design specifications and standards, and do not cause any adverse effects or conflicts with the existing database or application components.

The other options are not the primary reasons for monitoring activities performed in a production database environment. Enforcing that changes are authorized is an important aspect of database change management, but it is not the main purpose of database monitoring. Database change management is the process of planning, reviewing, approving, and implementing database changes in a controlled and consistent manner. Database change management helps to ensure that the changes are authorized by the appropriate stakeholders, aligned with the business requirements and objectives, and documented and communicated to the relevant parties. Database monitoring can support database change management by providing information and feedback on the change implementation and performance, but it does not enforce the change authorization. Deterring illicit actions of database administrators is a possible benefit of database monitoring, but it is not the primary reason for it. Database administrators are the users who have the highest level of access and privilege to the database, and they are responsible for managingand maintaining the database operations and security. Database monitoring can help to deter illicit actions of database administrators by tracking and auditing their activities and actions on the database, and alerting or escalating any suspicious or malicious behavior. However, database monitoring is not the only or the most effective way to prevent or detect illicit actions of database administrators. Other measures, such as implementing the principle of least privilege, segregating duties, enforcing password policies, and encrypting data, are also necessary to protect the database from unauthorized or improper access or manipulation by database administrators or other users. Preventing system developers from accessing production data is apossible benefit of database monitoring, but it is not the primary reason for it. System developers are the users who design, develop, and test the applications that interact with the database. System developers should not have access to the production data, as it may contain sensitive or confidential information that could be compromised or misused by the developers. System developers should only use test or dummy data for their development and testing purposes. Database monitoring can help to prevent system developers from accessing production data by controlling and restricting their access and privilege to the database, and logging and reporting any unauthorized or inappropriate access attempts. However, database monitoring is not the only or the most effective way to prevent system developers from accessing production data. Other measures, such as implementing access control policies, masking or anonymizing data, and isolating development and production environments, are also necessary to safeguard the production data from system developers or other users. References = Database Monitoring: Basics & Introduction | Splunk, IT Risk Resources | ISACA, Best Practices for Database Performance Monitoring

The best way to mitigate the security risk associated with the inappropriate use of enterprise applications on the BYOD devices is to implement BYOD mobile device management (MDM) controls. MDM controls are software tools or services that allow the organization to remotely manage, monitor, and secure the BYOD devices and the enterprise applications and data on them. MDM controls can help to enforce security policies, restrict unauthorized access, encrypt sensitive data, wipe data in case of loss or theft, and update or patch applications. The other options are not as effective as implementing MDM controls, as they are related to the review, awareness, or recovery of the BYOD devices and applications, not the prevention or protection of the security risk. References = Risk and Information Systems Control Study Manual, Chapter 3: IT Risk Response, Section 3.3: IT Risk Response Implementation, page 145.

A good IT risk scenario must be aligned with a business objective. This alignment ensures that the risk scenario is relevant to the organization’s goals and can be effectively integrated into its risk management processes.

Alignment to Business Objective (Answer C):

Importance: Aligning risk scenarios with business objectives ensures that they are relevant and support the organization’s overall strategy.

Impact: This alignment helps in prioritizing risk management efforts and resources toward areas that directly affect the organization’s success.

Outcome: It leads to more effective risk management by focusing on risks that could impact key business outcomes.

Comparison with Other Options:

A. The scenario is aligned to business control processes:

Purpose: Control processes are important but secondary to business objectives.

B. The scenario is aligned to the organization’s risk appetite and tolerance:

Purpose: Important for overall risk management but not the primary characteristic of a good risk scenario.

D. The scenario is aligned to known vulnerabilities in information technology:

Purpose: While addressing vulnerabilities is important, the primary focus should be on how these vulnerabilities affect business objectives.

The vendor must host data in a specific geographic location to ensure that the data is protected by the applicable data protection laws of the EU or the country where the data originates. This is especially important for SaaS customers who transfer personal data from the EU to third countries, as they need to comply with the GDPR and the new Standard Contractual Clauses (SCCs) that regulate such transfers. The vendor must also provide adequate security measures and guarantees to protect the data from unauthorized access, disclosure, or loss. References = Risk and Information Systems Control Study Manual, Chapter 5: IT Risk Mitigation, Section 5.3: IT Risk Mitigation Strategies and Approaches, Page 253; Data Protection – New EU Standard Contractual Clauses - Bodle Law.

The percent of patches implemented within established timeframe is the best metric to demonstrate the effectiveness of an organization’s patch management process, as it measures how well the organization meets its patching objectives and reduces its exposure to vulnerabilities. This metric reflects the timeliness, completeness, and quality of the patching process, and can be compared against the organization’s patch management policy and standards. A high percent of patches implemented within established timeframe indicates that the organization has a mature and efficient patch management process that minimizes the risk of security breaches or operational disruptions due to unpatched systems.

A key risk indicator (KRI) is a metric that measures the level and trend of a risk that may affect the organization’s objectives, operations, or performance1. A KRI threshold is a predefined value or range that indicates the acceptable or tolerable level of risk for the organization2. Theorganization’s risk appetite is the amount and type of risk that it is willing to take in order to meet its strategic goals3. Therefore, the most likely reason for senior management’s response is that the KRI threshold needs to be revised to better align with the organization’s risk appetite. This means that the current threshold is either too low or too high, resulting in false alarms or missed signals. By adjusting the threshold to reflect the organization’s risk appetite, senior management can ensure that the KRI provides relevant and actionable information for risk management and decision making. The other options are not the most likely reasons for senior management’s response, as they imply that the KRI is faulty, irrelevant, or misunderstood. The underlying data source for the KRI is using inaccurate data and needs to be corrected. This option assumes that the KRI is based on erroneous or unreliable data, which would affect its validity and reliability. However, this is not the most likely reason, as senior management would be expected to verify the data quality and accuracy before using the KRI for risk monitoring and reporting. The KRI is not providing useful information and shouldbe removed from the KRI inventory. This option assumes that the KRI is not aligned with the organization’s objectives, strategies, or risk profile, which would affect its usefulness and value. However, this is not the most likely reason, as senior management would be expected to review and update the KRI inventory periodically to ensure that the KRIs are relevant and meaningful for risk management. Senior management does not understand the KRI and should undergo risk training. This option assumes that senior management lacks the knowledge or skills to interpret and use the KRI for risk management, which would affect their competence and confidence. However, this is not the most likely reason, as senior management would be expected to have sufficient risk awareness and education to understand and apply the KRI for risk management. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 2, Section 2.1.4, Page 53.

IT risk scenarios are hypothetical situations that describe the sources, causes, and consequences of IT-related risks, and the potential impacts on the organization’s objectives, performance, and value creation12.

A corporate risk register is a document that records and tracks the significant risks that the organization faces, and the responses and actions that are taken to address them34.

The greatest benefit of incorporating IT risk scenarios into the corporate risk register is that exposure is integrated into the organization’s risk profile, which is a comprehensive and integrated representation of the risks that may affect the organization’s objectives, performance, and value creation56.

Exposure is integrated into the organization’s risk profile means that the organization has a complete and consistent view of the IT risk landscape, and the potential impacts andinterdependencies of IT risks on other types of risks, such as financial, operational, strategic, or reputational risks56.

Exposure is integrated into the organization’s risk profile also means that the organization can make informed and balanced decisions on the risk responses and actions, and allocate the appropriate resources and priorities to the IT risk management and control processes56.

The other options are not the greatest benefit, but rather possible outcomes or consequences of incorporating IT risk scenarios into the corporate risk register. For example:

Corporate incident escalation protocols are established is an outcome of incorporating IT risk scenarios into the corporate risk register that indicates the organization has defined and implemented the procedures and mechanisms for reporting and resolving IT-related incidents,and for escalating them to the appropriate authorities or levels when necessary78. However, this outcome does not measure or reflect the exposure or the risk profile of the organization, which may depend on other factors such as the frequency, severity, or complexity of the incidents78.

Risk appetite cascades to business unit management is a consequence of incorporating IT risk scenarios into the corporate risk register that indicates the organization has communicated and aligned the risk appetite, which is the amount and type of risk that the organization is willing to accept or pursue, to the business unit management, who are responsible for executing the risk strategy and objectives at the operational level . However, this consequence does not indicate or imply the exposure or the risk profile of the organization, which may vary depending on the context, environment, or stakeholder expectations .

The organization-wide control budget is expanded is an outcome of incorporating IT risk scenarios into the corporate risk register that indicates the organization has increased the amount of resources and funds that are allocated to the control processes, which are the procedures and activities that aim to ensure the effectiveness and efficiency of the organization’s operations, the reliability of its information, and the compliance with its policies and regulations . However, this outcome does not affect or determine the exposure or the risk profile of the organization, which is independent of the control budget . References =

1: IT Risk Scenarios - Morland-Austin3

2: Risk Scenarios Toolkit, ISACA, 2019

3: Risk Register Template and Examples | Prioritize and Manage Risk1

4: Risk Register Examples for Cybersecurity Leaders4

5: Risk IT Framework, ISACA, 2009

6: IT Risk Management Framework, University of Toronto, 2017

7: Security Incident Reporting and Response, University of Toronto, 2017

8: Security Incident Reporting and Response, ISACA, 2019

Risk Appetite: Linking Strategy, Risk and Performance, ISACA, 2012

Risk Appetite and Tolerance, ISACA Journal, Volume 4, 2013

The Control Process | Principles of Management2

Control Management: What it is + Why It’s Essential | Adobe Workfront5

 Strong authentication is the most effective measure against external threats to an organization’s confidential information. Confidential information is any data or information that is sensitive, proprietary, or valuable to the organization, and that should not be disclosed to unauthorized parties1. External threats are malicious actors outside the organization who attempt to gain unauthorized access to the organization’s networks, systems, and data, using various methods such as malware, hacking, or social engineering2. Strong authentication is a method of verifying the identity and legitimacy of a user or device before granting access to the organization’s resources or data3. Strong authentication typically involves the use of multiple factors or methods of authentication, such as passwords, tokens, biometrics, orcertificates4. Strong authentication can prevent or reduce the risk of external threats to the organization’s confidential information, by making it more difficult and costly for the attackers to compromise the credentials or devices of the authorized users, and by limiting the access to the data or resourcesthat are relevant and necessary for the users’ roles and responsibilities5. The other options are not the most effective measures against external threats to the organization’s confidential information, as they are either less secure or less relevant than strong authentication. Single sign-on is a method of allowing a user to access multiple systems or applications with a single set of credentials, without having to log in separately for each system or application6. Single sign-on can improve the user experience and convenience, as well as reduce the administrative burden and cost of managing multiple accounts and passwords. However, single sign-on is not the most effective measure against external threats to the organization’s confidential information, as it can also increase the risk of credential compromise or misuse, and create a single point of failure or attack for the attackers to access multiple systems or data. Data integrity checking is a method of ensuring that the data or information is accurate, complete, and consistent, and that it has not been altered or corrupted by unauthorized parties or processes. Data integrity checking can involve the use of techniques such as checksums, hashes, digital signatures, or encryption. Data integrity checking can enhance the quality and reliability of the data or information, as well as detect and prevent any unauthorized or malicious changes or tampering. However, data integrity checking is not the most effective measure against external threats to the organization’s confidential information, as it does not prevent or reduce the risk of data theft or leakage, and it does not verify the identity or legitimacy of the users or devices accessing the data. Intrusion detection system is a system that monitors the network or system activities and events, and detects and alerts any suspicious ormalicious behaviors or anomalies that may indicate an attempted or successful breach or attack. Intrusion detection system can help to identify and respond to external threats to the organization’s networks, systems, and data, by providing visibility and awareness of the network or system status and activities, and by enabling timely and appropriate actions or countermeasures. However, intrusion detection system is not the most effective measure againstexternal threats to the organization’s confidential information, as it is a reactive or passive system that does not prevent or block the attacks, and it may generate false positives or negatives that can affect its accuracy and efficiency. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 4, Section 4.2.1, Page 189.

The main reason for documenting the performance of controls is to provide accurate risk reporting. Risk reporting is a process that communicates and discloses the relevant and reliable information about the risks and their management to the stakeholders and decision makers. Risk reporting is an essential component of the risk management process, as it helps to monitor and evaluate the effectiveness and efficiency of the risk identification, assessment, response, and monitoring activities, as well as to support and inform the risk governance and oversight functions. Documenting the performance of controls is a technique that records and tracks the results and outcomes of the controls that are implemented to address the risks, such as the control objectives,

Whenever there is a change in sourcing strategy, such as moving from cloud to internal hosting, the first step is to reassess the effectiveness and completeness of existing risk responses and confirm that they still mitigate the risks appropriately.

CRISC emphasizes:

“When transitioning services or changing control environments, practitioners should reassess risk responses and validate that previously identified risks and vulnerabilities remain properly addressed.”

Only after reassessment should the practitioner proceed to update registers, controls, and audit plans.

Hence, A is the correct answer.

CRISC Reference: Domain 3 – Risk Response and Mitigation, Topic: Managing Control Changes.

Comprehensive and Detailed Explanation (aligned to ISACA CRISC guidance)

In the three lines model (formerly three lines of defense), the second line provides risk management, compliance oversight, and specialized support to the first line (operational management). One of its key responsibilities is monitoring the risk environment and alerting operational management to emerging issues—such as new regulatory requirements, changes in risk levels, and control weaknesses—while advising on appropriate responses. Implementing corrective actions is primarily the responsibility of the first line, which owns the processes. Owning risk scenarios and bearing loss consequences are first-line management responsibilities. Performing duties independently to provide assurance is the role of the third line (internal audit), which maintains organizational independence. Thus, the function of monitoring and advising, including escalation of emerging issues, aligns directly with the mandate of the second line.

The recovery time objective (RTO) is a metric that defines the maximum acceptable time frame for restoring a system or service after a disruption. The RTO is determined by the business impact and requirements of the system or service, as well as the risk appetite and tolerance of the organization. The calculation of the RTO is necessary to determine the priority of restoration,which means the order and urgency of recovering the systems or services based on their criticality and dependency. The priority of restoration helps to optimize the use of resources and minimize the downtime and losses during a disaster recovery. The other options are not the correct answers, as they are not the main purpose of calculating the RTO. The time required to restore files is a factor that affects the RTO, but it is not the outcome of the RTO calculation. The point of synchronization is the point in time to which the data must be restored to ensure consistency and accuracy. The point of synchronization is related to the recovery point objective (RPO), not the RTO. The annual loss expectancy (ALE) is a measure of the expected loss peryear due to a specific risk or threat. The ALE is calculated by multiplying the single loss expectancy (SLE) by the annualized rate of occurrence (ARO). The ALE is not directly related to the RTO, although it may influence the RTO determination. References = Recovery Time Objective (RTO) - What Is It, Examples, Calculation; CRISC Review Manual, pages 197-1981; CRISC Review Questions, Answers & Explanations Manual, page 842

When allocating scarce resources for overdue audit corrective actions, risk impact is the main prioritization criterion.

CRISC guidance dictates that corrective actions should first address risks posing the greatest potential harm to the enterprise’s objectives—whether financial, reputational, operational, or compliance-related.

Supporting extract (CRISC study materials):

“Prioritization of treatment options for numerous risk scenarios will be most effective when based on the likelihood of compromise and subsequent impact.” (Slide 311).

Thus, the level of risk impact determines:

Which issues could cause the most damage if unaddressed.

Which corrective actions are most urgent.

The most effective allocation of resources for mitigation.

While cost-benefit and control indicators are valuable supplementary factors, impact severity always takes precedence in a risk-based prioritization model.

Hence, the correct answer is A. Level of risk impact.

The primary reason for tracking the status of risk mitigation plans is to ensure that the proposed controls are implemented as scheduled, as this can help to reduce the risk exposure of the organization and to achieve the desired risk objectives. Tracking the status of risk mitigation plans can also help to monitor and evaluate the performance and effectiveness of the risk controls, and to identify and address any issues or gaps that may arise during the implementation.Tracking the status of risk mitigation plans can also provide feedback and information to the risk owners and stakeholders, and enable them to adjust the risk strategy and response actions accordingly. References = CRISC: Certified in Risk & Information Systems Control Sample Questions, Question 251. CRISC Sample Questions 2024, Question 251. ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, Question 251. CRISC by Isaca Actual Free Exam Q&As, Question 9.

According to the CRISC Review Manual (Digital Version), monitoring key access control performance indicators is the best way to provide an early warning that network access of terminated employees is not being revoked in accordance with the service level agreement (SLA), as it measures the effectiveness and efficiency of the access control process and its alignment with the SLA objectives and requirements. The SLA is a contract that defines the expectations and responsibilities of the service provider and the service recipient in terms of the quality, availability, and scope of the service. Monitoring key access control performance indicators helps to:

Evaluate the extent to which the access control process has met the SLA targets and standards

Identify and report any deviations, errors, or breaches in the access control process and its compliance with the SLA

Recommend and implement corrective actions or improvement measures to address the issues or findings in the access control process

Communicate and coordinate the monitoring results and recommendations with the relevant stakeholders, such as the service provider, the service recipient, and the senior management

References = CRISC Review Manual (Digital Version), Chapter 4: IT Risk Monitoring and Reporting, Section 4.1: IT Risk Monitoring, pp. 217-2181

A control deficiency is a weakness or flaw in the design or implementation of a control that reduces its effectiveness or efficiency in achieving its intended objective or mitigating the risk that it is designed to address. A control deficiency may be caused by various factors, such as human error, system failure, process inefficiency, resource limitation, etc.

When determining which control deficiencies are most significant, the most useful information would be the risk analysis results, which are the outcomes or outputs of the risk analysis process that measures and compares the likelihood and impact of various risk scenarios, and prioritizes them based on their significance and urgency. The risk analysis results can help to determine which control deficiencies are most significant by providing the following information:

The level and priority of the risks that are associated with the control deficiencies, and the potential consequences or impacts that they may cause for the organization if they materialize.

The gap or difference between the current and desired level of risk, and the extent or degree to which the control deficiencies contribute to or affect the gap or difference.

The cost-benefit or feasibility analysis of the possible actions or plans to address or correct the control deficiencies, and the expected or desired outcomes or benefits that they may provide for the organization.

The other options are not the most useful information when determining which control deficiencies are most significant, because they do not provide the same level of detail and insight that the risk analysis results provide, and they may not be relevant or actionable for the organization.

An exception handling policy is a policy that defines and describes the procedures and guidelines for dealing with the situations or circumstances that deviate from the normal or expected operation or functionality of a control, and that may require special or alternative actions or measures to address or resolve them. An exception handling policy can provide useful information on how to handle or manage the control deficiencies, but it is not the most usefulinformation when determining which control deficiencies are most significant, because it does not indicate the level and priority of the risks that are associated with the control deficiencies, and the potential consequences or impacts that they may cause for the organization.

A vulnerability assessment is an assessment that identifies and evaluates the weaknesses or flaws in the organization’s assets, processes, or systems that can be exploited or compromised by the threats or sources of harm that may affect the organization’s objectives or operations. A vulnerability assessment can provide useful information on the existence and severity of the control deficiencies, but it is not the most useful information when determining which control deficiencies are most significant, because it does not indicate the likelihood and impact of the risk scenarios that are associated with the control deficiencies, and the potential consequences or impacts that they may cause for the organization.

A benchmarking assessment is an assessment that compares and contrasts the organization’s performance, practices, or processes with those of other organizations or industry standards, and identifies the strengths, weaknesses, opportunities, or threats that may affect the organization’s objectives or operations. A benchmarking assessment can provide useful information on the best practices or improvement areas for the organization, but it is not the most useful information when determining which control deficiencies are most significant, because it does not indicate the level and priority of the risks that are associatedwith the control deficiencies, and the potential consequences or impacts that they may cause for the organization. References =

ISACA, CRISC Review Manual, 7th Edition, 2022, pp. 19-20, 23-24, 27-28, 31-32, 40-41, 47-48, 54-55, 58-59, 62-63

ISACA, CRISC Review Questions, Answers & Explanations Database, 2022, QID 176

CRISC Practice Quiz and Exam Prep

 IT risk management is the process of identifying, assessing, and mitigating the risks related to the use of information technology (IT) in the organization. IT risk management aims to ensure the confidentiality, integrity, and availability of IT resources and information, and to support the IT governance and strategy of the organization1.

The best indicator of the effectiveness of IT risk management processes is the time between when IT risk scenarios are identified and the enterprise’s response. This indicator can help to measure how quickly and efficiently the organization can detect and respond to the IT risks, and how well the organization can prevent or minimize the negative impacts of the IT risks. The time between when IT risk scenarios are identified and the enterprise’s response can include:

The time taken to identify and report the IT risk scenarios, using various methods and sources, such as risk assessments, audits, monitoring, alerts, or incidents

The time taken to analyze and evaluate the IT risk scenarios, using various tools and techniques, such as risk matrices, risk registers, risk indicators, or risk models

The time taken to select and implement the IT risk responses, using various strategies and controls, such as avoidance, mitigation, transfer, or acceptance

The time taken to review and improve the IT risk management processes, using various feedback and learning mechanisms, such as lessons learned, best practices, or benchmarks23

The other options are not the best indicators of the effectiveness of IT risk management processes, but rather some of the inputs or outputs of IT risk management processes. Percentage of business users completing risk training is an indicator of the awareness and competence of the IT users and providers, which can affect the IT risk management performance, but it does not measure the IT risk management processes directly. Percentage of high-risk scenarios for which risk action plans have been developed is an indicator of the completeness and coverage of the IT risk management activities, which can affect the IT risk management outcomes, but it does not measure the IT risk management processes directly. Number of key risk indicators (KRIs) defined is an indicator of the scope and complexity of the IT risk management objectives, whichcan affect the IT risk management resources and capabilities, but it does not measure the IT risk management processes directly. References =

IT Risk Management - ISACA

Risk Management Process - ISACA

Risk Response - ISACA

[CRISC Review Manual, 7th Edition]

Multi-factor authentication (MFA)significantly reduces the risk of account compromise by requiring multiple forms of verification, such as a password and a one-time code, enhancing security beyond single-factor authentication methods.

The risk practitioner’s best recommendation when one of an organization’s key IT systems cannot be patched because the patches interfere with critical business application functionalities is to identify additional mitigating controls, as they may reduce the likelihood or impact of the vulnerabilities being exploited, and align the residual risk with the risk tolerance and appetite of the organization. The other options are not the best recommendations, as they may not address the risk adequately, or may introduce unacceptable consequences, such as disrupting the businessoperations, changing the risk strategy, or accepting excessive risk. References = CRISC Review Manual, 7th Edition, page 111.

 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 interdependenciesand 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 andtolerance, 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]

Using the risk management process will best ensure that controls adequately support business goals and objectives, as it involves identifying, assessing, responding, and monitoring the risks that may affect the achievement of the business goals and objectives, and designing and implementing controls to mitigate those risks. Enforcing strict disciplinary procedures in case of noncompliance, reviewing results of the annual company external audit, and adopting internationally accepted controls are also good practices, but they are not the best, as they do not necessarily align the controls with the business goals and objectives. References = CRISC Review Manual, 7th Edition, page 146.

Determining the value of data is essential when implementing a DLP system. Understanding data value helps prioritize protection efforts, allocate resources effectively, and ensure that critical information assets are adequately safeguarded against loss or unauthorized access.

The most likely justification for risk acceptance of an exception to a security control is when the business benefits exceed the loss exposure. Risk acceptance is a risk response strategy that involves acknowledging and tolerating the risk, without taking any action to reduce or transfer the risk. An exception to a security control is a deviation or non-compliance from the established security policy or standard, due to a valid business reason or circumstance. Risk acceptance of an exception to a security control may be justified when the business benefits exceed the loss exposure, which means that the value or advantage of the exception outweighs the potential cost or harm of the risk. For example, an exception to a security control may enable faster or easier access to the system or data, which may improve the productivity, efficiency, or satisfaction of the users or customers, and generate more revenue or profit for the business. The business benefits of the exception may exceed the loss exposure of the risk, which may be low or negligible, or may be mitigated by other controls or factors. Therefore, risk acceptance of an exception to a security control may be a reasonable and rational decision, based on the cost-benefit analysis of the exception and the risk. Automation cannot be applied to the control, the end-user license agreement has expired, and the control is difficult to enforce in practice are not the most likely justifications for risk acceptance of an exception to a security control, as they are either irrelevant or insufficient reasons, and they do not consider the business benefits or the loss exposure of the exception and the risk. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 50.

The most important objective of establishing an enterprise risk management (ERM) function within an organization is to have a unified approach to risk management across the organization. An ERM function is a centralized and coordinated function that oversees and supports the risk management activities of the organization, such as risk identification, assessment, response, monitoring, and reporting. An ERM function helps to ensure that the risk management process is consistent, comprehensive, and integrated with the organization’s strategy, objectives, and culture. An ERM function also helps to align the risk management activities with the organization’s risk appetite and tolerance, and to provide a holistic view of the organization’s risk profile and exposure. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 1, Section 1.1.1, page 131

A BIA identifies critical processes and interdependencies, enabling prioritization of recovery efforts based on business impact.

 A recovery time objective (RTO) is the maximum acceptable time that a business process or function can be disrupted or unavailable before it causes significant damage or loss to the organization. A business continuity plan (BCP) is a document that describes how the organization will resume its critical business operations in the event of a disaster or disruption. A disaster recovery plan (DRP) is a document that describes how the organization will restore its IT systems and infrastructure in the event of a disaster or disruption. The RTO defined in the BCP and the DRP should be consistent and aligned, as they both support the continuity and recovery of the business. If the RTO defined in the BCP is shorter than the RTO defined in the DRP, it means that the BCP expects the business process or function to be restored faster than the DRP can provide. This can create a gap or a conflict between the BCP and the DRP, and can compromise the effectiveness and efficiency of the continuity and recovery efforts. Therefore, the best way for the risk practitioner to address this concern is to communicate the discrepancy to the DR manager for follow-up, meaning that the risk practitioner should report the issue and its implications to the DR manager, who is responsible for developing and maintaining the DRP. The DR manager should review the discrepancy and determine whether it is justified or not, and whether it requires any adjustment or alignment of the RTOs in the BCP and the DRP. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.4.2, p. 206-207

 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

 According to the CRISC Review Manual (Digital Version), an effective control environment is best indicated by controls that manage risk within the organization’s risk appetite, as this reflects the alignment of thecontrol objectives and activities with the organization’s strategic goals and risk preferences. The risk appetite is the amount and type of risk that the organization is willing to accept in pursuit of its objectives. Managing risk within the organization’s risk appetite helps to:

Balance the potential benefits and costs of risk-taking and risk response

Optimize the use of the organization’s resources and capabilities

Enhance the value and performance of the organization

Foster a risk-aware culture that supports the organization’s vision and mission

References = CRISC Review Manual (Digital Version), Chapter 2: IT Risk Assessment, Section 2.3: IT Risk Assessment Process, pp. 93-941

Key risk indicators (KRIs) are metrics that provide information about the level of exposure to a specific risk or a group of risks.

Reviewing KRIs is the most helpful way to determine the effectiveness of an organization’s IT risk mitigation efforts. This means that the organization monitors and evaluates the actual results and outcomes of the risk responses, compares them with the risk appetite and tolerance of the organization, identifies any deviations or breaches that may require attention or action, and reports them to the appropriate parties for decision making or improvement actions.

The other options are not the most helpful ways to determine the effectiveness of an organization’s IT risk mitigation efforts. They are either secondary or not essential for risk management.

The references for this answer are:

Risk IT Framework, page 15

Information Technology & Security, page 9

Risk Scenarios Starter Pack, page 7

A risk register is a tool that records and tracks the identified risks, their causes, impacts, probabilities, responses, and owners. It is a living document that should be updated regularly to reflect the changes in therisk environment and the status of the risk responses12. The best way to improve a risk register is to ensure that it is updated based upon significant events, such as:

New risks are identified or existing risks are eliminated

Risk probabilities or impacts change due to internal or external factors

Risk responses are implemented or modified

Risk owners or stakeholders change

Risk incidents or issues occur

Risk thresholds or appetite change

Risk reporting or communication requirements change

Updating the risk register based upon significant events can help to:

Maintain the accuracy and relevance of the risk information

Enhance the risk awareness and accountability of the risk owners and stakeholders

Support the risk monitoring and reporting activities

Facilitate the risk evaluation and decision-making processes

Improve the risk management performance and maturity

References =

Risk Register - Project Management Knowledge

How to Create a Risk Register: A Step-by-Step Guide - ProjectManager.com

The risk practitioner’s primary consideration when participating in development of a new IT risk strategy should be the risk culture of the organization. Risk culture is the set of values, beliefs, attitudes, and behaviors that shape how the organization perceives, manages, and responds to risks. Risk culture influences the organization’s risk appetite, risk objectives, risk policies, risk processes, and risk performance. The risk practitioner should consider the risk culture whendeveloping a new IT risk strategy, because it helps to align the IT risk strategy with the organization’s mission, vision, values, and strategy, and to ensure that the IT risk strategy is supported and accepted by the organization’s stakeholders, such as the board, management, employees, customers, regulators, etc. The risk practitioner should also consider the risk culture when developing a new IT risk strategy, because it helps to identify and addressany gaps, issues, or challenges that may affect the implementation and effectiveness of the IT risk strategy, such as lack of awareness, communication, coordination, or accountability. The other options are not the primary consideration for the risk practitioner, although they may be related to the IT risk strategy. Scale of technology, risk indicators, and proposed risk budget are all factors that could affect the feasibility and sustainability of the IT risk strategy, but they do not necessarily reflector influence the organization’s risk culture. References = Risk and Information Systems Control Study Manual, Chapter 1, Section 1.2.1, page 1-9.

According to the CRISC Review Manual (Digital Version), the next course of action when a risk practitioner finds the IT department’s recovery time objective (RTO) for a key system does not align with the enterprise’s business continuity plan (BCP) is to consult with the IT department to update the RTO. The RTO is the maximum acceptable time that an application, computer, network, or system can be down after an unexpected disaster, failure, or comparable event takes place. The RTO should be aligned with the BCP, which is a set of policies, procedures, and resources that enable the organization to continue or resume its critical business functions in the event of a disruption. Consulting with the IT department to update the RTO helps to:

Ensure that the RTO reflects the current business requirements and expectations for the availability and recovery of the key system

Evaluate the feasibility and cost-effectiveness of achieving the RTO with the existing IT resources and capabilities

Identify and implement the necessary changes or improvements in the IT infrastructure, processes, and controls to meet the RTO

Test and validate the RTO and the IT recovery procedures and verify their compatibility and consistency with the BCP

Communicate and coordinate the RTO and the IT recovery plan with the relevant stakeholders, such as the business owner, the risk owner, and the senior management

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

Key risk indicators (KRIs) are metrics used by organizations to monitor and assess potential risks that may impact their objectives and performance. KRIs also provide early warning signals that help organizations identify, analyze, and address risks before they escalate into significant issues1. The most importantreason to monitor KRIs is to help management lessen the impact of realized risk, which is the actual or expected negative consequence of a risk event2. By monitoring KRIs, management can gain insight into the current and emerging risk exposures and trends, and evaluate their alignment with the organization’s risk appetite and tolerance3. This enables management to make informed and timely decisions and actions to mitigate or eliminate the risks, and to allocate resources and prioritize efforts where they are most needed. By lessening the impact of realized risk, management can also protect and enhance the organization’s reputation, performance, and value. Identifying early risk transfer strategies, analyzing the chain of risk events, and identifying the root cause of risk events are not the most important reasons to monitor KRIs, as they do not provide the same level of benefit and value as lessening the impact of realized risk. Identifying early risk transfer strategies is a process that involves finding and implementing ways to shift or share the risk or its impact to another party, such as through insurance, outsourcing, or hedging4. Identifying early risk transfer strategies can help to reduce the organization’s risk exposure and liability, but it does not necessarily lessen the impact of realized risk, as the risk or its impact may still occur or affect the organization indirectly. Analyzing the chain of risk events is a process that involves tracing and understanding the sequence and interconnection of the risk events that lead to a specific outcome or consequence5. Analyzing the chain of risk events can help to identify and address the root causes and contributing factors of the risk events, but it does not necessarily lessen the impact of realized risk, as the outcome or consequence may have already occurred or be unavoidable. Identifying the root cause of risk events is a process that involves finding and determining the underlying or fundamental source or reason of the risk events. Identifying the root cause of risk events can help to prevent or correct the recurrence or escalation of the risk events, but it does not necessarily lessen the impact of realized risk, as the impact may have already happened or be irreversible. References = 1: Key Risk Indicators: A Practical Guide | SafetyCulture2: Risk Impact - an overview | ScienceDirect Topics3: KRI Framework for Operational Risk Management | Workiva4: Risk Transfer - an overview | ScienceDirect Topics5: EventChainMethodology - Wikipedia : [Root Cause Analysis - an overview | ScienceDirect Topics] : [Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.1: Key Risk Indicators, pp. 181-185.]

Local laws and regulations should be the primary consideration when assessing the risk of using IoT devices to collect and process PII, because they define the legal obligations and liabilities of the organization and the individuals involved. Non-compliance with local laws and regulations can result in fines, lawsuits, reputational damage, and loss of trust. Therefore, it is essential to understand and adhere to the applicable laws and regulations in the jurisdictions where the IoT devices operate and where the PII is stored, processed, and transferred.

References

•Considerations for Managing Internet of Things (IoT) Cybersecurity and Privacy Risks

•The Internet of Things (IoT) and Digitally Stored PII: Avoidable or Inevitable?

•Security Issues in IoT: Challenges and Countermeasures

A business impact analysis (BIA) is a process that identifies and assesses the effects that accidents, emergencies, disasters, and other unplanned, negative events could have on a business. The BIA (sometimes also called business impact assessment) predicts how a business will be affected by everything from a hurricane to a labor strike1.

One of the data that would be used when performing a BIA is the expected costs for recovering the business. This data can help to estimate the amount of resources and funds that would be needed to restore the normal operations and functions of the business after a disruption. The expected costs for recovering the business can include:

The costs of repairing or replacing damaged or lost assets, such as equipment, inventory, or facilities

The costs of hiring or training additional staff, or outsourcing some tasks or services

The costs of implementing alternative or backup systems or processes, such as cloud computing or manual procedures

The costs of communicating and coordinating with customers, suppliers, partners, regulators, and other stakeholders

The costs of complying with legal or contractual obligations, or paying fines or penalties

The costs of mitigating or preventing further losses or damages, such as insurance premiums or security measures23

The expected costs for recovering the business can help to determine the priority and urgency of the recovery activities, and to allocate the available resources and funds accordingly. The expected costs for recovering the business can also help to evaluate the cost-effectiveness and feasibility of the recovery strategies and options, and to justify the investment in the business continuity planning and management4.

The other options are not the data that would be used when performing a BIA, but rather the data that would be used for other purposes or processes. A cost-benefit analysis of running the current business is a data that would be used to compare the advantages and disadvantages of different business decisions or alternatives, such as launching a new product or service, or expanding to a new market. A cost-benefit analysis can help to assess the profitability and viability of the current business, but it does not measure the impact of a disruption on the business5. A cost of regulatory compliance is a data that would be used toestimate the amount of resources and funds that would be required to meet the rules and standards set by the authorities or agencies that govern the business, such as laws, regulations, or policies. A cost of regulatory compliance can help to ensure the legality and accountability of the business, but it does not measure the impactof a disruption on the business. A projected impact of current business on future business is a data that would be used to forecast the potential outcomes and consequences of the current business activities or strategies on the future business performance and growth, such as sales, revenue, market share, or customer satisfaction. A projected impact of current business on future business can help to plan and optimize the future business, but it does not measure the impact of a disruption on the current business. References =

Business Impact Analysis | Ready.gov

Business Impact Analysis Toolkit | Smartsheet

Business Impact Analysis (BIA): Prepare for Anything [2023] • Asana

How To Conduct Business Impact Analysis in 8 Easy Steps - G2

Cost Benefit Analysis - ISACA

[Regulatory Compliance - ISACA]

[Impact Analysis - ISACA]

[CRISC Review Manual, 7th Edition]

The best way to enable a risk practitioner to understand management’s approach to organizational risk is to know the risk appetite and risk tolerance of the organization. Risk appetite is the amount and type of risk that an organization is willing to pursue, retain, or take in order to achieve its objectives. Risk tolerance is the amount and type of risk that an organization is willing to accept in relation to specific performance measures, such as availability, reliability, or security. Risk appetite and risk tolerance reflect the management’s attitude, preferences, and expectations towards risk, and guide the risk management process, such as risk identification, assessment, response, and monitoring. The other options are not as effective as knowing the risk appetite and risk tolerance, although they may provide some input or context for understanding the management’s approach to organizational risk. References = Risk and Information Systems Control Study Manual, Chapter 1, Section 1.2.1, page 1-8.

The best input for conducting a review of emerging risk is the annual threat reports. Emerging risk is the risk that arises from new or evolving sources, or from existing sources that have not been previously considered or recognized. Emerging risk may have significant impact on the organization’s objectives, strategies, operations, or reputation, and may require new or different risk responses. Annual threat reports are the reports that provide information and analysis on the current and future trends, developments, and challenges in the threat landscape, such as cyberattacks, natural disasters, geopolitical conflicts, or pandemics. Annual threat reports can help to identify and assess the emerging risk, as they can provide insights into the sources, drivers, indicators, and scenarios of the emerging risk, as well as the potential impact and likelihood of the emerging risk. Annual threat reports can also help to benchmark and compare the organization’s risk exposure and preparedness with the industry and the peers, and to prioritize and respond to the emerging risk. Audit reports, industry benchmarks, and financial forecasts are not as useful as annual threat reports, as they do not focus on the emerging risk, and may not capture the latest or future changes in the threat landscape. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 50.

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 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

User recertification is the most effective control to ensure user access is maintained on a least-privilege basis, as it involves a periodic review and validation of user access rights and privileges by the appropriate authority. User recertification helps to identify and remove any unnecessary, excessive, or obsolete access rights and privileges that may pose a security risk or violate the principle of least privilege. User recertification also helps to ensure that user access rights and privileges are aligned with the current business needs, roles, and responsibilities of the users.

The other options are not the most effective controls to ensure user access is maintained on a least-privilege basis. User authorization is the process of granting or denying access rights and privileges to users based on their identity, role, and credentials, but it does not verify or update the existing access rights and privileges of the users. Change log review is the process of examining and analyzing the records of changes made to the system, configuration, or data, but it does not directly address the user access rights and privileges. Access log monitoring is the process of tracking and auditing the user activities and actions on the system or network, but it does not validate or modify the user access rights and privileges. References = What Is the Principle of Least Privilege and Why is it Important?, Principle of Least Privilege: Definition, Methods & Examples, IT Risk Resources | ISACA

 The most important information to include when reporting the effectiveness of risk management to senior management is the changes in residual risk levels against acceptable levels, as it indicates how well the risk management process and activities have reduced the risk exposure and impact to the level that is aligned with the risk tolerance and appetite of the organization. The other options are not the most important information, as they are more related to thedrivers,factors, or outcomes of risk management, respectively, rather than the effectiveness or value of risk management. References = CRISC Review Manual, 7th Edition, page 109.

The risk owner should be someone who has the authority, responsibility, and knowledge to manage the risk effectively and align it with the organizational strategy and objectives. The risk owner should also be able to communicate the impact of the risk on the business operations and the value proposition of the risk response. Understanding the effect of loss events on business operations is a key criterion for assigning risk owners, as it helps to prioritize and mitigate the risks that matter most to the organization.

References

•Why Assigning a Risk Owner is Important and How to Do It Right

•How to Write Strong Risk Scenarios and Statements - ISACA

•What Everybody Ought To Know About Project Risk Owners

Reviewing configuration settings is the best way for an organization to ensure that servers are compliant to security policy, because it helps to check and verify that the servers are configured and maintained according to the established security standards and guidelines, and that any deviations or violations are identified and corrected. A configuration setting is a parameter or option that defines the behavior or functionality of a server, such as a system, an application, or aservice. A security policy is a document that outlines the security objectives, principles, and rules that the organization and its employees must follow, and the consequences of non-compliance. Reviewing configuration settings is the best way, as it helps to ensure that the servers are secure and compliant, and that any security risks or issues are detected and resolved. Reviewing change logs, server access logs, and anti-malware compliance are all possible ways to ensure that servers are compliant to security policy, but they are not the best way, as they do not provide a comprehensive and consistent view of the configuration settings and their compliance status. References = Risk and Information Systems Control Study Manual, Chapter 5, Section 5.3.2, page 200

The primary concern for a risk practitioner in adopting innovative big data analytics is the potential re-identification of individuals from previously anonymized data. Advanced analytics techniques can inadvertently combine datasets in ways that reveal personal identities, leading to privacy breaches and regulatory non-compliance. This risk is heightened when data from multiple sources are aggregated, increasing the chance of re-identification.

Data processing is the activity of collecting, organizing, transforming, and analyzing data to produce useful information for decision making or other purposes12.

The role of the internal IT team in this situation is data processors, which are the people or entities that process data on behalf of the data controllers, who are the people or entities that determine the purposes and means of the data processing34.

Data processors are the role of the internal IT team because they are responsible for managing information through the applications that are used by the organization, and they act under the instructions and authority of the organization, which is the data controller34.

Data processors are also the role of the internal IT team because they have to comply with the data protection laws and regulations that apply to the data processing, and they have to ensure the security and confidentiality of the data34.

The other options are not the role of the internal IT team, but rather possible roles or terms that are related to data processing. For example:

Data custodians are the people or entities that have physical or logical control over the data, and they are responsible for implementing and maintaining the technical and administrative safeguards to protect the data56. However, this role is not the role of theinternal IT team because it is a subset or function of the data processor role, and it does not reflect the full scope of the data processing activities that the internal IT team performs56.

Data owners are the people or entities that have legal rights or authority over the data, and they are responsible for defining and enforcing the policies and rules for the data access, use, and quality . However, this role is not the role of the internal IT team because it is a different or separate role from the data processor role, and it does not reflect the relationship or agreement between the organization and the internal IT team . References =

1: Data Processing - Wikipedia1

2: Data Processing: Definition, Steps, and Types2

3: Data Controller vs Data Processor: What’s the Difference?3

4: Data controller vs data processor: What are the differences and responsibilities?4

5: Data Custodian - Wikipedia5

6: Data Custodian: Definition, Role & Responsibilities6

Data Owner - Wikipedia

Data Owner: Definition, Role & Responsibilities

 According to the Risk and Information Systems Control Study Manual, the main reason for analyzing risk scenarios is to identify additional risk scenarios that may not have been considered in the initial risk identification process. Risk scenarios are hypothetical situations that describe how, where, and why adverse events can occur. By analyzing risk scenarios, the risk manager can gain a better understanding of the relationships between assets, processes, threats, vulnerabilities, and other factors that may affect the organization’s objectives. Analyzing risk scenarios can also help to evaluate the likelihood and impact of the potential risks, as well as the effectiveness of the existing controls and the need for additional controls. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 5, Section 5.2.1, Page 215. How to write good risk scenarios and statements

Effective risk communication best benefits an organization by helping personnel make better-informed decisions. Risk communication is the process of exchanging information and opinions among stakeholders about the nature, magnitude, significance, or control of a risk. By communicating risk information clearly and consistently, the organization can enhance the understanding and awareness of the risk, and enable the personnel to make decisions that are aligned with the risk appetite and objectives of the organization. Assisting the development of a risk register, improving the effectiveness of IT controls, and increasing participation in the risk assessment process are other possible benefits, but they are not as important as helping personnel make better-informed decisions. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 12; CRISC Review Manual, 6th Edition, page 215.

According to the Guide to Implementing an IT Risk Management Framework, the first activity that should be performed when establishing IT risk management processes is to assess the goals and culture of the organization. This is because the goals and culture of the organization define the context and scope of the IT risk management process, and influence the risk appetite and tolerance of the organization. By assessing the goals and culture of the organization, the IT risk manager can align the IT risk management process with the organization’s strategy, vision, mission, values, and objectives. The IT risk manager can also identify the key stakeholders, roles, and responsibilities involved in the IT risk management process, and ensure that they have the necessary skills, knowledge, and resources to perform their tasks effectively. Additionally, the IT risk manager can establish the communication and reporting mechanisms for the IT risk management process, and ensure that they are consistent with the organization’s culture and expectations. References = Guide to Implementing an IT Risk Management Framework, An Overview of the Risk Management Process

After migrating a key financial system to a new provider, it was discovered that a developer could gain access to the production environment. This indicates that there is a risk of unauthorized access, use, disclosure, modification, or destruction of sensitive data, such as financial records, transactions, reports, etc.

A control that could mitigate this risk is to remove the developer’s access to the production environment. This means that the developer would not be able to alter the source code or configuration of the financial system without proper authorization or approval.

The other options are not the best ways to mitigate the risk in this situation. They are either irrelevant or less effective than removing the developer’s access.

The references for this answer are:

Risk IT Framework, page 14

Information Technology & Security, page 8

Risk Scenarios Starter Pack, page 6

Social engineering attacks are attempts to manipulate or deceive people into revealing confidential or personal information, such as passwords, account numbers, or security codes. Customer service representatives are often targeted by social engineering attacks, as they have access to sensitive customer data and may be pressured to provide quick and satisfactory service. Therefore, it is most important to include in a risk awareness training session for the customer service department how to identify and prevent social engineering attacks, such as phishing, vishing, baiting, or impersonation.

References

•The role of customer service in cybersecurity - Security Intelligence

•How to Improve Risk Awareness in the Workplace [+ Template] - AlertMedia

•Top 4 Risks For Customer Service Teams | Resolver

The risk practitioner’s first course of action when an assessment of information security controls has identified ineffective controls should be A. Determine whether the impact is outside the risk appetite1

According to the CRISC Review Manual, risk appetite is the amount and type of risk that an organization is willing to accept in pursuit of its objectives. Risk appetite reflects the organization’s risk culture, strategy, and values2

When an assessment of information security controls has identified ineffective controls, it means that the controls are not providing the expected level of protection or assurance for the information assets or processes. This may result in increased exposure or vulnerability to threats, or reduced ability to achieve objectives. Therefore, the risk practitioner should first determine whether the impact of the ineffective controls is outside the risk appetite, as this would indicate the need for urgent action or escalation3

The other options are not the first course of action when an assessment of information security controls has identified ineffective controls, because:

•B. Requesting a formal acceptance of risk from senior management may be appropriate if the impact of the ineffective controls is within the risk appetite, and the organization decides to accept the risk as it is. However, this should not be the first course of action, as it may not address the root cause of the ineffective controls, or the potential consequences or opportunities for improvement4

•C. Reporting the ineffective control for inclusion in the next audit report may be part of the risk communication and reporting process, but it should not be the first course of action, as it may delay the resolution or mitigation of the issue, or the implementation of corrective actions. Moreover, the next audit report may not be timely or relevant for the decision-makers or stakeholders who need to be informed of the ineffective controls5

•D. Deploying a compensating control to address the identified deficiencies may be a possible risk response option, but it should not be the first course of action, as it may require further analysis, evaluation, and approval. Moreover, deploying a compensating control may not be the most effective or efficient solution, as it may introduce additional complexity, cost, or risk.

1: CRISC Review Questions, Answers & Explanations Database, Question ID: 100003 2: CRISC Review Manual, 7th Edition, page 28 3: CRISC Review Manual, 7th Edition, page 223 4: CRISC Review Manual, 7th Edition, page 224 5: CRISC Review Manual, 7th Edition, page 225 : CRISC Review Manual, 7th Edition, page 226

The primary reason for prioritizing risk scenarios is to facilitate risk response decisions. Risk scenarios are hypothetical situations that describe the possible causes, events, and consequences of a risk. Prioritizing risk scenarios is the process of ranking the risk scenarios according to their level of importance, urgency, or impact. Prioritizing risk scenarios helps to facilitate risk response decisions, which are the choices made to address the risks, such as avoiding, transferring, mitigating, or accepting the risks. Prioritizing risk scenarios helps to allocate the resources and efforts to the most significant or critical risk scenarios, and to select the most appropriate and effective risk responses. Prioritizing risk scenarios also helps to communicate and justify the risk response decisions to the stakeholders, and to monitor and report the risk status and performance. Providing an enterprise-wide view of risk, supporting risk response tracking, and assigning risk ownership are not the primary reasons for prioritizing risk scenarios, as they are either theinputs or the outputs of the risk prioritization process, and they do not address the primary need of responding to the risks. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 50.

Key Control Indicators (KCIs) are metrics used to monitor the performance of controls. Their primary benefit is the early detection of control degradation, allowing organizations to take corrective actions before issues escalate into significant problems.

Risk assessment is a key process that identifies, analyzes, and evaluates the risks associated with the implementation of an emerging technology. It helps to determine the potential impact and likelihood of the risks, as well as the appropriate risk responses and controls. Lack of risk assessment can lead to poor decision making, inadequate risk mitigation, and unexpected consequences. Therefore, it should be of greatest concern to a risk practitioner reviewing the implementation of an emerging technology. References = Risk and Information Systems Control Study Manual, Chapter 5, Section 5.2.1, p. 226-227

 The ultimate goal of conducting a privacy impact analysis (PIA) is to identify gaps in data protection controls, as it involves assessing the privacy risks and impacts of collecting, using, storing, and disclosing personally identifiable information (PII), and determining the adequacy and effectiveness of the existing or proposed controls to mitigate those risks and impacts. Developing a customer notification plan, identifying PII, and determining gaps in data identification processes are possible steps or outcomes of conducting a PIA, but they are not the ultimate goal, as they do not address the root cause or solution of the privacy issues. References = CRISC Review Manual, 7th Edition, page 155.

When likelihood is unknown, range-based estimates from subject-matter experts provideinformed and realistic insights into potential risk exposure. This approach helps approximate the inherent risk based on experience and expertise, supporting effective decision-making.

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.

An IT risk management framework is a set of principles, processes, and practices that guide and support the identification, analysis, evaluation, treatment, monitoring, and communication of IT-related risks within an organization12.

The primary advantage of implementing an IT risk management framework is the establishment of a reliable basis for risk-aware decision making, which enables the organization to balance the potential benefits and adverse effects of using IT, and to allocate resources and prioritize actions accordingly12.

A reliable basis for risk-aware decision making consists of the following elements12:

A common language and understanding of IT risk, its sources, impacts, and responses

A consistent and structured approach to IT risk identification, analysis, evaluation, and treatment

A clear and transparent governance structure and accountability for IT risk management

A comprehensive and up-to-date IT risk register and profile that reflects the organization’s risk appetite and tolerance

A regular and effective IT risk monitoring and reporting process that provides relevant and timely information to stakeholders

A continuous and proactive IT risk improvement process that incorporates feedback and lessons learned

The other options are not the primary advantage, but rather possible outcomes or benefits of implementing an IT risk management framework. For example:

Compliance with relevant legal and regulatory requirements is an outcome of implementing an IT risk management framework that ensures the organization meets its obligations and avoids penalties or sanctions12.

Improvement of controls within the organization and minimized losses is a benefit of implementing an IT risk management framework that reduces the likelihood and impact of IT-related incidents and events12.

Alignment of business goals with IT objectives is a benefit of implementing an IT risk management framework that ensures the IT strategy and activities support the organization’s mission and vision12. References =

1: Risk IT Framework, ISACA, 2009

2: IT Risk Management Framework, University of Toronto, 2017