CRISC Exam Dumps - Isaca Certification Questions and Answers

The MOST important thing to review when determining whether a potential IT service provider’s control environment is effective is an independent audit report, because it provides an objective and reliable assessment of the service provider’s controls and compliance with standards and regulations. The other options are not as important as an independent audit report, because:

Option B: Control self-assessment is a subjective and voluntary process that may not reflect the actual effectiveness of the service provider’s controls.

Option C: This option is incomplete and irrelevant to the question.

Option D: Service level agreements (SLAs) are contractual agreements that specify the expected performance and availability of the service provider, but they do not necessarily indicate the effectiveness of the service provider’s controls. References = Risk and Information Systems Control Study Manual, 7th Edition, ISACA, 2020, p. 195.

Data biasin machine learning algorithms can lead to inaccurate predictions or decisions, as biases in training data are amplified in the output. Addressing bias is essential for ethical and reliable algorithm performance.

 A risk practitioner’s best course of action when a business manager wants to leverage an existing approved vendor solution from another area within the organization is to assess the risk associated with the new use case. This is because the new use case may introduce different or additional risks that were not considered or addressed in the original approval. For example, the new use case may involve different data types, volumes, or sensitivities; different business processes, functions, or objectives; different regulatory or contractual requirements; or different technical or operational dependencies. Therefore, the risk practitioner should perform a vendor risk assessment (VRA) to identify, evaluate, and mitigate the potential risks of the new use case and ensure that the vendor solution meets the organization’s riskappetite and tolerance12. Recommending allowing the new usage based on prior approval is not the best course of action, as it may overlook or underestimate the risks of the new use case and expose the organization to unacceptable levels of risk. Requesting a new third-party review is not the best course of action,as it may be unnecessary or redundant if the vendor solution has already been reviewed and approved for another use case within the organization. Requesting revalidation of the original use case is not the best course of action, as it may not address the specific risks of the new use case and may also delay or disrupt the existing use case. References = Risk and Information SystemsControl Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.2: Risk Monitoring, pp. 189-191.

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

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

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

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

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

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

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

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

1: Database Security: Attacks and Solutions | SpringerLink2

2: Unauthorised Modification of Data With Intent to Cause Impairment3

3: Database Activity Monitoring - Wikipedia4

4: Database Activity Monitoring (DAM) | Imperva5

5: Database Access Control - Wikipedia6

6: Database Access Control: Best Practices for Database Security7

7: Data Reconciliation - Wikipedia8

8: Data Reconciliation and Gross Error Detection9

9: Edit Check - Wikipedia

Edit Checks: A Data Quality Tool

Senior management involvement is a critical driver for the success of any risk management program. Without their engagement, there is a lack of strategic oversight, resource allocation, and prioritization of risk management initiatives, directly impacting the organization's ability to meet risk objectives. This is emphasized in theGovernance Principlesof CRISC.

The best risk response for an identified high probability risk scenario involving a critical, proprietary business function with an annualized cost of control higher than the annual loss expectancy is to accept the risk. Accepting the risk means acknowledging the risk but choosing not to take any specific action to address it. This strategy is suitable when the cost of implementing controls exceeds the potential loss, as in this scenario. The organization recognizes the risk, but the cost-benefit analysis suggests that the potential loss is acceptable given the higher cost of control. The other options are not the best risk responses, as they may not befeasible, practical, or cost-effective in this scenario. Mitigating the risk means reducing the risk by implementing controls or measures to minimize its potential impact, but this would increase the cost of control, which is already higher than the annual loss expectancy. Transferring the risk means shifting the risk to another party, typically through insurance or contracts, but this may not be possible or advisable for a critical, proprietary business function, and it may also increase the overall cost burden. Avoiding the risk means eliminating the risk entirely by not engaging in the activity that poses the risk, but this may disrupt essential business operations and potentially result in other adverse consequences. References = CRISC Exam:Best Risk Response for High Probability Risk Scenario; Risk Response Plan in Project Management: Key Strategies & Tips; Chapter 19: Summarizing Risk Management Concepts

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.

A business case will BEST communicate the importance of risk mitigation initiatives to senior management, because it provides a clear and concise justification of the objectives, benefits, costs, and risks of the proposed initiatives. A business case helps to align the risk mitigation initiatives with the enterprise’s strategy and goals, and to obtain the necessary approval and support from senior management. The other options are not as effective as a business case, because:

Option B: A balanced scorecard is a tool to measure and monitor the performance of the enterprise across four perspectives: financial, customer, internal process, and learning and growth. It does not communicate the importance of risk mitigation initiatives, but rather the outcomes and impacts of them.

Option C: Industry standards are benchmarks or best practices that define the minimum requirements or expectations for a certain domain or activity. They do not communicate the importance of risk mitigation initiatives, but rather the compliance or alignment of them with the external environment.

Option D: A heat map is a tool to visualize and prioritize the risks based on their likelihood and impact. It does not communicate the importance of risk mitigation initiatives, but rather the severity and distribution of the risks. References = Risk and Information Systems Control Study Manual, 7th Edition, ISACA, 2020, p. 118.

According to the CRISC Review Manual1, risk tolerance is the acceptable level of variation that management is willing to allow for any particular risk as it pursues its objectives. Risk tolerance provides a helpful reference point when communicating the results of a risk assessment to stakeholders, as it helps to compare the current level of risk exposure with the desired level of risk exposure, and to prioritize and allocate resources for risk response. Risk tolerance also helps to align the risk assessment results with the stakeholder expectations and preferences, and to facilitate risk-based decision making. References = CRISC Review Manual1, page 192.

A risk profile is a summary of the key risks that an organization faces, along with the corresponding risk responses, risk owners, and risk indicators1. A risk profile is a useful tool for communicating and reporting the risk status and performance to the management and other stakeholders2. When developing a risk profile for management approval, the most useful information to include is the residual risk and the risk appetite, because:

Residual risk is the level of risk that remains after the implementation of risk responses3. It indicates the degree of exposure or uncertainty that the organization still faces, and the potential impact or consequences of the risk events. Residual risk helps the management to evaluate the effectiveness and adequacy of the risk responses, and to decide whether to accept, reduce, transfer, or avoid the risk4.

Risk appetite is the amount and type of risk that the organization is willing to accept or pursue in order to achieve its objectives5. It reflects the organization’s risk culture, strategy, and priorities, and provides a basis for setting risk thresholds and targets. Risk appetite helps the management to align the risk profile with the organizational goals and values, and to ensure that the risk responses are consistent and proportional to the risk level6.

The other options are not the most useful information when developing a risk profile for management approval, because:

Strength of detective and preventative controls is a measure of how well the controls can identify or prevent the occurrence or impact of the risk events7. It is a part of the risk response information, but it does not provide a comprehensive or holistic view of the risk profile. It does not show the residual risk or the risk appetite, which are more relevant and important for the management approval.

Effectiveness and efficiency of controls is a measure of how well the controls achieve their intended objectives and how well they use the available resources8. It is a part of the risk performance information, but it does not provide a complete or balanced view of the risk profile.It does not show the residual risk or the risk appetite, which are more significant and meaningful for the management approval.

Inherent risk and risk tolerance are related but different concepts from residual risk and risk appetite. Inherent risk is the level of risk that exists before the implementation of risk responses3. Risk tolerance is the acceptable variation or deviation from the risk appetite or the risk objectives5. They are useful for the risk assessment and analysis, but they do not provide the current or desired state of the risk profile. They do not show the residual risk or the risk appetite, which are more critical and valuable for the management approval.

References =

Risk Profile - CIO Wiki

Risk Profile: Definition, Example, and How to Create One

Residual Risk - CIO Wiki

What is Residual Risk? - Definition from Techopedia

Risk Appetite - CIO Wiki

Risk Appetite: What It Is and Why It Matters - Gartner

Preventive and Detective Controls - CIO Wiki

Control Effectiveness and Efficiency - CIO Wiki

 Understanding Business Impact Analysis (BIA):

BIA is a process used to identify and evaluate the potential effects (impact) of interruptions to critical business operations as a result of a disaster, accident, or emergency.

It helps quantify the potential loss impact of cyber risks by assessing the financial and operational consequences of disruptions.

 Quantifying Loss Impact:

BIA involves determining the value of business processes and the impact of their loss. This includes evaluating factors such as revenue loss, additional operational costs, legal penalties, and reputational damage.

By analyzing the criticality of business functions and their dependencies, BIA provides a detailed understanding of potential impacts, aiding in the development of risk mitigation strategies.

 Comparing Other Techniques:

Cost-Benefit Analysis:Useful for evaluating the cost-effectiveness of controls but does not provide a comprehensive assessment of potential loss impacts.

Penetration Testing:Identifies vulnerabilities but does not quantify the business impact of exploiting those vulnerabilities.

Security Assessment:Evaluates security controls but is not focused on the broader business impact of potential disruptions.

 References:

The CRISC Review Manual emphasizes the role of BIA in assessing the impact of risks on business operations and quantifying potential losses (CRISC Review Manual, Chapter 2: IT Risk Assessment, Section 2.7 Business Impact Analysis)​​.

Embedding Risk Management:

Integrated Approach: Embedding risk management in business activities ensures that risk considerations are part of everyday decision-making processes and operations.

Cultural Shift: Promotes a risk-aware culture where all employees understand their role in managing risk, leading to more proactive and effective risk management practices.

Comparison with Other Options:

Communicating Risk Awareness Materials: Important for education but less impactful than embedding risk management in daily activities.

Establishing KRIs: Useful for monitoring but does not ensure risk management practices are integrated into all business processes.

Minimizing Inherent Risk: This is an outcome of effective risk management rather than a method to ensure its effectiveness.

Best Practices:

Training and Awareness: Provide ongoing training to employees to embed risk management practices in their roles.

Policy and Procedures: Develop and enforce policies and procedures that integrate risk management into all business activities.

Leadership Support: Ensure strong support from leadership to promote and sustain a risk-aware culture.

A threat risk assessment will best quantify the risk associated with malicious users in an organization, because it focuses on identifying and evaluating the potential sources of harm or damage to the organization’s assets, such as data, systems, or networks. A malicious user is a person who intentionally and unauthorizedly accesses, modifies, destroys, or steals the organization’s information or resources, for personal gain, revenge, espionage, or sabotage. A threat risk assessment can help the organization to estimate the likelihood and impact of malicious user attacks, based on factors such as the user’s motivation, capability, opportunity, and access level. A threat risk assessment can also help the organization to determine the appropriate risk response strategies, such as prevention, detection, mitigation, or transfer, to reduce the risk exposure and impact of malicious user attacks. References = Risk IT Framework, ISACA, 2022, p. 141

 The best way to facilitate the development of effective IT risk scenarios is to utilize a cross-functional team. A cross-functional team is a group of people with different skills, expertise, and perspectives who work together to achieve a common goal. A cross-functional team can help to create realistic, comprehensive, and relevant IT risk scenarios by bringing diverse knowledge, experience, and insights from various domains and functions. A cross-functional team can alsohelp to identify and address the interdependencies, interactions, and impacts of IT risks across the organization. The other options are not the best ways to facilitate the development of effective IT risk scenarios, although they may be useful or necessary depending on the context and nature of the IT risks. Participation by IT subject matter experts is important, but it is notsufficient, as IT risks may affect or be affected by non-IT factors and stakeholders. Integration of contingency planning is a part of the risk response process, which follows the risk scenario development process, but it is not the same as creating the risk scenarios. Validation by senior management is a quality assurance step that ensures the accuracy and completeness of the risk scenarios, but it is not the same as facilitating the development of the risk scenarios. References = Six Steps to Using Risk Scenarios for Improved Risk Management, IT Risk Scenarios - Morland-Austin, IT Risk Resources | ISACA

The most effective way to mitigate the risk of unintentional data disclosure through the use of social media sites is to conduct user awareness training. User awareness training is a process of educating and informing the users about the security policies, procedures, and practices that are relevant and applicable to their roles and responsibilities. User awareness training can help to increase the knowledge, understanding, and compliance of the users regarding the data protection and privacy requirements, and the potential risks and consequences of data disclosure through social media sites. User awareness training can also help to influence the behavior, attitude, and culture of the users toward data security and privacy. The other options are not as effective as conducting user awareness training, as they are related to the technical, procedural, or contractual measures to mitigate the risk, not the human or behavioral measures to mitigate the risk. References = Risk and Information Systems Control Study Manual, Chapter 3: IT Risk Response, Section 3.3: IT Risk Response Implementation, page 145.

A security incident handling process is a set of procedures and activities that aim to identify, analyze, contain, eradicate, recover from, and learn from security incidents that affect the confidentiality, integrity, or availability of information assets12.

The maturity of a security incident handling process is the degree to which the process is defined, managed, measured, controlled, and improved, and the extent to which it meets the organization’s objectives and expectations34.

The best key performance indicator (KPI) to measure the maturity of a security incident handling process is the number of recurring security incidents, which is the frequency or rate of security incidents that are repeated or reoccur after being resolved or closed56.

The number of recurring security incidents is the best KPI because it reflects the effectiveness and efficiency of the security incident handling process, and the ability of the process to prevent or reduce the recurrence of security incidents through root cause analysis, corrective actions, and continuous improvement56.

The number of recurring security incidents is also the best KPI because it is directly related to the organization’s objectives and expectations, such as minimizing the impact and cost of security incidents, enhancing the security posture and resilience of the organization, and complying with the relevant standards and regulations56.

The other options are not the best KPIs, but rather possible metrics that may support or complement the measurement of the maturity of the security incident handling process. For example:

The number of security incidents escalated to senior management is a metric that indicates the severity or complexity of security incidents, and the involvement or awareness of the seniormanagement in the security incident handling process56. However, this metric doesnot measure the effectiveness or efficiency of the process, or the ability of the process to prevent or reduce security incidents56.

The number of resolved security incidents is a metric that indicates the output or outcome of the security incident handling process, and the performance or productivity of the security incident handling team56. However, this metric does not measure the quality or sustainability of the resolution, or the ability of the process to prevent or reduce security incidents56.

The number of newly identified security incidents is a metric that indicates the input or demand of the security incident handling process, and the capability or capacity of the security incident detection and identification mechanisms56. However, this metric does not measure the effectiveness or efficiency of the process, or the ability of the process to prevent or reduce security incidents56. References =

1: Computer Security Incident Handling Guide, NIST Special Publication 800-61, Revision 2, August 2012

2: ISO/IEC 27035:2016 Information technology — Security techniques — Information security incident management

3: Capability Maturity Model Integration (CMMI) for Services, Version 1.3, November 2010

4: COBIT 2019 Framework: Introduction and Methodology, ISACA, 2018

5: KPIs for Security Operations & Incident Response, SecurityScorecard Blog, June 7, 2021

6: Key Performance Indicators (KPIs) for Security Operations and Incident Response, DFLabs White Paper, 2018

According to the Risk Appetite vs. Risk Tolerance: What is the Difference? article, risk tolerance is the acceptable level of variation that an organization is willing to accept around a specific objective. Risk tolerance is usually expressed as a range or a limit, and it helps to guide the decision making and risk taking of the organization. The best way to promote adherence to the risk tolerance level set by management is to define the expectations in the enterprise risk policy, which is a document that establishes the organization’s risk management framework, principles, and objectives. By defining the expectations in the enterprise risk policy, the organization can communicate the risk tolerance level to all the relevant stakeholders, and ensure that they understand and follow the risk management guidelines and standards. This can help to create aconsistent and coherent risk culture across the organization, and to avoid any deviations or violations of the risk tolerance level. References = Risk Appetite vs. Risk Tolerance: What is the Difference?

The greatest concern associated with the transmission of healthcare data across the internet is unencrypted data, as this exposes the data to unauthorized access, interception, modification, or disclosure, which may compromise the confidentiality, integrity, and availability of the data. Healthcare data is sensitive and personal information that may include medical records, diagnoses, treatments, prescriptions, insurance claims, and biometric data. Healthcare data is subject to various legal and regulatory requirements, such as the Health Insurance Portability and Accountability Act (HIPAA) in the United States, that mandate the protection and privacy of the data. Encryption is a method of transforming the data into an unreadable format that can only be accessed or restored by authorized parties who have the decryption key. Encryption helps to prevent or reduce the risk of data breaches, identity theft, fraud, or other malicious attacks. The other options are not the greatest concerns associated with the transmission of healthcare dataacross the internet, although they may pose some challenges or issues. Lack of redundant circuits is a concern for the reliability and continuity of the data transmission, but it does notaffect the security or privacy of the data. Low bandwidth connections is a concern for the speed andefficiency of the data transmission, but it does not affect the security or privacy of the data. Data integrity is a concern for the accuracy and completeness of the data, but it does not necessarily depend on the encryption of the data. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk Response, page 156.

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 most useful input to the parent company’s risk practitioner when developing risk scenarios for the post-acquisition phase is the risk registers of both companies. The risk register is a document that records the details of the risks, such as their sources, causes, consequences, likelihood, impact, and responses. By reviewing the risk registers of both companies, the risk practitioner can identify the existing and potential risks that may affect the post-acquisition integration, performance, and value. The risk management framework, the IT balancedscorecard, and the most recent internal audit findings are other possible inputs, but they are not as useful as the risk registers. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 11; CRISC Review Manual, 6th Edition, page 144.

A recovery time objective (RTO) is the maximum acceptable time or duration that a business process or function can be disrupted or unavailable due to a disaster or incident, before it causes unacceptable or intolerable consequences for the organization. It is usually expressed in hours, days, or weeks, and it is aligned with the organization’s business continuity and disaster recovery objectives and requirements.

The primary factor in determining a RTO is the cost of downtime due to a disaster, which is the estimated loss or damage that the organization may suffer if a business process or function is disrupted or unavailable for a certain period of time. The cost of downtime can be expressed in terms of financial, operational, reputational, or legal consequences, and it can help the organization to assess the impact and urgency of the disaster, and to decide on the appropriate recovery strategy and resources.

The other options are not the primary factors in determining a RTO, because they do not address the fundamental question of how long the organization can tolerate the disruption or unavailability of a business process or function.

The cost of offsite backup premises is the cost of acquiring, maintaining, or using an alternative or secondary location or facility that can be used to resume or continue the business process or function in case of a disaster or incident. The cost of offsite backup premises is important to consider when selecting or implementing a recovery strategy, but it is not the primary factor in determining a RTO, because it does not indicate the impact or urgency of the disaster, and it may not reflect the organization’s business continuity and disaster recovery objectives and requirements.

The cost of testing the business continuity plan is the cost of conducting, evaluating, or improving the tests or exercises that are performed to verify or validate the effectiveness and efficiency of the business continuity plan, which is the document that describes the actions and procedures that the organization will take to recover or restore the business process or function in case of a disaster or incident. The cost of testing the business continuity plan is important to consider when developing or updating the business continuity plan, but it is not the primary factor in determining a RTO, because it does not indicate the impact or urgency of the disaster, and it may not reflect the organization’s business continuity and disaster recovery objectives and requirements.

The response time of the emergency action plan is the time or duration that it takes for the organization to initiate or execute the emergency action plan, which is the document that describes the immediate actions and procedures that the organization will take to protect the life, health, and safety of the people, and to minimize the damage or loss of the assets,in case of adisaster or incident. The response time of the emergency action plan is important to consider when preparing or reviewing the emergency action plan, but it is not the primary factor in determining a RTO, because it does not indicate the impact or urgency of the disaster, and it may not reflect the organization’s business continuity and disaster recovery objectives and requirements. References =

ISACA, CRISC Review Manual, 7th Edition, 2022, pp. 62-63, 66-67, 70-71, 74-75, 78-79

ISACA, CRISC Review Questions, Answers & Explanations Database, 2022, QID 165

CRISC Practice Quiz and Exam Prep

According to the CRISC Review Manual, activity logging and monitoring is the best way to manage the risk associated with malicious activities performed by database administrators (DBAs), because it enables the detection and prevention of unauthorized or inappropriate actions on the database. Activity logging and monitoring involves capturing and reviewing the activities of the DBAs, such as the commands executed, the data accessed or modified, the privileges used,and the time and duration of the sessions. Activity logging and monitoring can also provide an audit trail for accountability and forensic purposes. The other options are not the best ways to manage the risk, because they do not directly address the malicious activities of the DBAs. Periodic access review is a control that verifies the appropriateness of the access rights granted to the DBAs, but it does not monitor their actual activities. Two-factor authentication is a control that enhances the security of the authentication process, but it does not prevent the DBAs from performing malicious activities once they are authenticated. Awareness training and background checks are controls that aim to reduce the likelihood of the DBAs engaging in malicious activities, but they do not guarantee their compliance or behavior. References = CRISC Review Manual, 7th Edition, Chapter 4, Section 4.1.3, page 166.

 Emerging risk is a risk that is new or evolving, and has the potential to significantly affect the enterprise’s objectives, performance, or reputation. Emerging risk can arise from changes in the internal or external environment, such as technological innovations, regulatory developments, or social trends. The best way to support communication of emerging risk is to include it on the next enterprise risk committee agenda. The enterprise risk committee is a group of senior executives who oversee the enterprise-wide risk management program, and provide guidance and direction to the risk owners and practitioners. By including the emerging risk on the agenda, the risk practitioner can ensure that the enterprise risk committee is aware of the risk, its causes, impacts, and likelihood, and can decide on the appropriate risk response strategy and actions. The other options are not the best way to support communication of emerging risk, as they involve different aspects of the risk management process:

Update residual risk levels to reflect the expected risk impact means that the risk practitioner adjusts the risk levels after considering the existing or planned risk responses. This may not befeasible or accurate for emerging risk, as the risk responses may not be defined or implemented yet, or may not be effective for the new or evolving risk.

Adjust inherent risk levels upward means that the risk practitioner increases the risk levels before considering any risk responses. This may not reflect the true nature or magnitude of the emerging risk, as the inherent risk levels are based on the assumptions and estimates of the risk practitioner, and may not account for the uncertainties or complexities of the emerging risk.

Include it in the risk register for ongoing monitoring means that the risk practitioner records and tracks the emerging risk, its causes, impacts, likelihood, responses, and owners. This is an important step in the risk management process, but it does not necessarily support communication ofthe emerging risk, as the risk register may not be accessible or visible to all the relevant stakeholders, or may not be updated or reviewed frequently enough to capture the changes in the emerging risk. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 1, Section 1.2.2.2, pp. 21-22.

A baseline assessment is the first step in assessing the maturity of an organization’s internal control environment. A baseline assessment is a comprehensive evaluation of the current state of the internal control structure, processes, and activities across the organization. A baseline assessment helps to identify the strengths and weaknesses of the existing internal controls, as well as the gaps and opportunities for improvement. A baseline assessment also provides a reference point for measuring the progress and effectiveness of the internal control improvement initiatives. The other options are not the first steps in assessing the maturity of an internal control environment, although they may be part of the subsequent steps. Validating control process execution is a technique to verify that the internal control activities are performed as designed and intended. Determining if controls are effective is a process to evaluate the adequacy and efficiency of the internal controls in achieving the desired outcomes and mitigating the risks. Identifying key process owners is a task to assign the roles and responsibilities for the internal control design, implementation, and monitoring to the appropriate individuals or groupswithin theorganization. References = CRISC Review Manual, pages 153-1541; CRISC Review Questions, Answers & Explanations Manual, page 742

A security awareness training program is an educational program that aims to equip the organization’s employees with the knowledge and skills they need to protect the organization’s data and sensitive information from cyber threats, such as hacking, phishing, or other breaches12.

A risk-aware culture is a culture that values and promotes the understanding and management of risks, and encourages the behaviors and actions that support the organization’s risk objectives and strategy34.

The best indication of an improved risk-aware culture following the implementation of a security awareness training program for all employees is an increase in the number of incidents reported, which is the frequency or rate of security incidents that are detected and communicated by the employees to the appropriate authorities or channels56.

An increase in the number of incidents reported is the best indication because it shows that the employees have gained the awareness and confidence to recognize and report the security incidents that may affect the organization, and that they have the responsibility and accountability to contribute to the organization’s risk management and security posture56.

An increase in the number of incidents reported is also the best indication because it enables the organization to respond and recover from the security incidents more quickly and effectively, and to prevent or reduce the recurrence or escalation of similar incidents in the future56.

The other options are not the best indication, but rather possible outcomes or consequences of an improved risk-aware culture or a security awareness training program. For example:

A reduction in the number of help desk calls is an outcome of an improved risk-aware culture or a security awareness training program that indicates the employees have become more self-reliant and proficient in solving or preventing the common or minor IT issues or problems . However, this outcome does not measure the employees’ awareness or reporting of security incidents, which may be more serious or complex .

An increase in the number of identified system flaws is a consequence of an improved risk-aware culture or a security awareness training program that indicates the employees have become more vigilant and proactive in finding and reporting the vulnerabilities or weaknesses in the IT systems or processes . However, this consequence does not measure the employees’ awareness or reporting of security incidents, which may exploit or leverage the system flaws .

A reduction in the number of user access resets is an outcome of an improved risk-aware culture or a security awareness training program that indicates the employees have become more careful and responsible in managing and protecting their user credentials or accounts . However, this outcome does not measure the employees’ awareness or reporting of security incidents, which may compromise or misuse the user access . References =

1: Security Awareness Training - Cybersecurity Education Online | Proofpoint US5

2: What Is Security Awareness Training and Why Is It Important? - Kaspersky6

3: Risk IT Framework, ISACA, 2009

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

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

6: Security Incident Reporting and Response, ISACA, 2019

IT Help Desk Best Practices, ISACA Journal, Volume 2, 2018

IT Help Desk Best Practices, ISACA Now Blog, February 12, 2018

System Flaw Reporting and Remediation, University of Toronto, 2017

System Flaw Reporting and Remediation, ISACA, 2019

User Access Management and Control, University of Toronto, 2017

User Access Management and Control, ISACA, 2019

The most useful information for a risk practitioner when planning response activities after risk identification is the risk priorities. Risk priorities are the order or ranking of the risks based on their level of importance or urgency. Risk priorities help the risk practitioner to focus on the most critical risks, and allocate the resources and efforts accordingly. Risk priorities are usuallydetermined by using a combination of factors, such as the likelihood and impact of the risks, the risk appetite and tolerance of the organization, and the cost and benefit of the risk responses. Theother options are not as useful as the risk priorities, although they may provide some input or context for the risk response planning. The risk register is the document that records the details of all identified risks, but it does not necessarily indicate the risk priorities. The risk appetite is the amount and type of risk that the organization is willing to pursue, retain, or take, but it does not specify the risk priorities. The risk heat maps are graphical tools that display the risk level of each risk based on the likelihood and impact, but they do not show the risk priorities. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.3.1, page 4-23.

The most important factor to include in the analysis of the policy exception is the risk associated with the inability to implement the multi-factor authentication requirement. A policy exception is a temporary orpermanent deviation from the established policies or standards of the organization, due to various reasons, such as budget constraints, technical limitations, or business needs. A policy exception must be submitted and approved by the appropriate authority, and it must include a clear and comprehensive analysis of the rationale, impact, and mitigation of the exception. The risk associated with the inability to implement the multi-factor authentication requirement is the most important factor to include in the analysis, because it evaluates the probability and severity of potential threats or incidents that could exploit the lack of multi-factor authentication, such as unauthorized access, data breach, or identity theft. The risk analysis also helps to justify the need and urgency of the policy exception, and to propose alternative or compensating controls to reduce or transfer the risk, such as password policies, access restrictions, or encryption. The other options are not the most important factor, although they may be relevant or supportive to the policy exception analysis. Sections of the policy that may justify not implementing the requirement are the clauses or provisions in the policy that allow or enable the policy exception, such as exemptions, waivers, or variances. These sections can help to validate the legitimacy and feasibility of the policy exception, but they do not assess the risk or the impact of the exception. Budget justification to implement the new requirement during the current year is the explanation and evidence of the financial resources and constraints that affect the implementation of the multi-factor authentication requirement. This justification can help to demonstrate the cost-benefit and return on investment of the requirement, but it does not measure the risk or the mitigation of the exception. Industry best practices with respect to implementation of the proposed control are the proven methods and standards that are adopted by the leading organizations in a specific field or sector for implementing the multi-factor authentication requirement. These best practices can help to benchmark and improve the quality and effectiveness of the requirement, but they do not quantify the risk or the impact of the exception. References = Policy Exception Management - ISACA, Multi-Factor Authentication Policy - University of Arkansas, Common Conditional Access policy: Require MFA for all users

Cyber risk insurance is a type of insurance policy that provides coverage against losses and damages caused by cyber incidents such as data breaches, hacking, and other cyber attacks. When an organization decides to purchase cyber risk insurance, it transfers the risk of financial loss due to a cyber incident to the insurance company. In the scenario described in the question, the organization allowed its cyber risk insurance to lapse while seeking a new insurance provider. This means that the organization is currently not covered by any cyber risk insurance policy and is therefore exposed to financial losses due to cyber incidents. The risk practitioner should report to management that the risk has been accepted. Accepting risk means that the organization is aware of the potential consequences of the risk and has decided not to take any action to mitigate, transfer, or avoid it. The other options are not correct because they do not reflect the current situation of the organization. The organization has not transferred the risk to another party, as it has no cyber risk insurance policy in place. The organization has not mitigated the risk, as it has not implemented anycontrols or measures to reduce the likelihood or impact of the risk. The organization has not avoided the risk, as it has not eliminated the source or cause of the risk or changed its activities to prevent the risk from occurring. References = CRISC Review Manual, pages 32-331; CRISC Review Questions, Answers & Explanations Manual, page 752

An IT risk register is a document that records and tracks the IT-related risks that an organization faces, as well as the information and actions related to those risks, such as the risk description, assessment, response, status, and owner. An IT risk register is a valuable tool for managing andcommunicating IT risks and their impact on the organization’s objectives and operations. However, an IT risk register may also contain sensitive or confidential information that should not be disclosed or shared with unauthorized or irrelevant parties, as it may compromise the security, privacy, or reputation of the organization or its stakeholders. Therefore, the risk manager’s best approach to the request from the head of a business operations department to review the entire IT risk register is to determine the purpose of the request before sharing the register. This is a technique to understand and evaluate the reason and the need for the request, as well as the scope and the level of access that the requester requires or expects. By determining the purpose of therequest, the risk manager can ensure that the request is legitimate, appropriate, and relevant, and that the requester has a clear and valid interest or stake in the IT risk register. The risk manager can also ensure that the request is aligned with the organization’s policies, procedures, and standards for IT risk management and information sharing. The risk manager can also use the purpose of the request to decide what and how much information to share with the requester, and what conditions or restrictions to apply, such as confidentiality, accuracy, or timeliness. The other options are not the best approaches to the request from the head of a business operations department to review the entire IT risk register, as they may be premature, unnecessary, or ineffective. Escalating to senior management is a technique to involve or inform the higher-level authorities or decision makers about the request, which may be useful or required in some cases, but it may not be the first or the best step to take, as it may delay or complicate the process, or undermine the risk manager’s authority or responsibility. Requiring a nondisclosure agreement is a technique to protect the confidentiality and integrity of the information in the IT risk register by legally binding the requester to not disclose or misuse the information. However, a nondisclosure agreement may not be needed or appropriate in every case, and it may not prevent or address other issues or risks related to the information sharing, such as relevance, accuracy, or timeliness. Sanitizing portions of the register is a technique toremove or redact the sensitive or confidential information from the IT risk register before sharing it with the requester, which may be necessary or prudent in some cases, but it may not be sufficient or satisfactory, as it may affect the completeness, usefulness, or validity of the information, or raise questions or concerns from the requester.

A risk treatment plan is a document that outlines the actions and resources required to implement the chosen risk response for a specific risk1. A risk response is a strategy or action that is taken or planned tomitigate or eliminate the risk, such as avoiding, transferring, reducing, or accepting the risk2. A risk owner is a person or entity that has the authority and accountability for a risk and its management3. If the implementation of a risk treatment plan will exceed the resources originally allocated for the risk response, the risk owner’s next action should be to escalate to senior management, which is the group of senior leaders who have the authority and accountability for the organization’s performance and governance4. By escalating to senior management, the risk owner can inform and consult them about the situation and the implications, and seek their guidance and approval for the necessary adjustments or alternatives. Escalating to senior management can also help to ensure that the risk treatment plan is aligned with the organization’s strategy, vision, and mission, and that the risk response is consistent with the organization’s risk appetite and tolerance5. Performing a risk assessment, accepting the risk of not implementing, and updating the implementation plan are not the best choices for the risk owner’s next action, as they do not provide the same level of communication and consultation as escalating to senior management. Performing a risk assessment is a process that involves identifying, analyzing, and evaluating the risks and their potential impacts on the organization’s objectives and performance6. Performing a risk assessment can help to update and validate the risk information and the risk treatment plan, but it does not address the issue of the resource shortfall or the stakeholder expectations. Acceptingthe risk of not implementing is a decision that involves acknowledging and tolerating the risk or its impact without taking anyaction to reduce or eliminate it7. Accepting the risk of not implementing can help to avoid the additional cost and effort of the risk treatment plan, but it does not consider the potential consequences or the stakeholder interests. Updating the implementation plan is a process that involves revising and modifying the plan for executing the risk treatment plan, such as the scope,schedule, budget, or quality8. Updating the implementation plan can help to reflect the changes and updates in the risk treatment plan, but it does not resolve the problem of the resource gap or the stakeholder approval. References = 1: Risk Treatment and Response Plans - UNECE2: Risk Response Strategy and Contingency Plans - ProjectManagement.com3: [Risk Ownership - Risk Management] 4: [Senior Management - Definition, Roles and Responsibilities] 5: [Risk Appetite and Tolerance - ISACA] 6: [Risk Assessment - an overview | ScienceDirect Topics] 7: [Risk Acceptance - an overview | ScienceDirect Topics] 8: [Implementation Plan - an overview | ScienceDirect Topics] : [Risk and Information Systems Control Study Manual, Chapter 3: Risk Response, Section 3.1: Risk Response Options, pp. 113-115.] : [Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.2: Risk Monitoring, pp. 189-191.] : [Risk and Information Systems Control Study Manual, Chapter 5: Information Systems Control Design and Implementation, Section 5.1: Control Design, pp. 233-235.] : [Risk and Information Systems Control Study Manual, Chapter 5: Information Systems Control Design and Implementation, Section 5.2: Control Implementation, pp. 243-245.] : [Risk and Information Systems Control Study Manual, Chapter 5: Information Systems Control Design and Implementation, Section 5.3: Control Monitoring and Maintenance, pp. 251-253.]

The main purpose of implementing controls is to reduce risk to an acceptable level. Reviewing the effectiveness of the new tool post-implementation ensures the control objective has been achieved.

When preparing a risk status report for periodic review by senior management, it is most important to ensure the report includes risk exposure in business terms. Risk exposure is the potential loss or harm that may result from a risk event. Expressing risk exposure in business terms can help senior management to understand the impact and significance of the risk on the organization’s objectives, performance, and value. A detailed view of individual risk exposures, a summary of incidents that have impacted the organization, and recommendations by an independent risk assessor are other possible contents of the report, but they are not as important as risk exposure in business terms. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 10; CRISC Review Manual, 6th Edition, page 140.

According to ISACA, a risk register is a tool to record and track the identified risks, their ratings, responses, and status. The primary purpose of a risk register is to provide a centralized view of risk for the organization, as it enables the consolidation, communication, and reporting of risk information across different levels, units, and functions. A risk register can also support the risk management process, such as risk identification, assessment, treatment, monitoring, and review.

The most helpful input to develop risk scenarios associated with hosting an organization’s key IT applications in a cloud environment is conducting a risk workshop with key stakeholders. A risk workshop is a facilitated session that involves brainstorming, discussing, and analyzing the potential risks and opportunities related to a specific topic or project. A risk workshop helps to identify and prioritize the most relevant and significant risk scenarios, as well as to explore the possible causes, impacts, and responses. A risk workshop also helps to engage and align the key stakeholders, such as the business owners, IT managers, cloud providers, and risk experts, and to leverage their knowledge, experience, and perspectives. The other options are not as helpful as conducting a risk workshop, although they may provide some inputor information for the risk scenario development. Reviewing the results of independent audits, performing a site visit to the cloud provider’s data center, and performing a due diligence review are all activities that can help to assess the current state and performance of the cloud environment, but they do not necessarily generate or evaluate the risk scenarios. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.2.1, page 4-13.

Fraudulent transactions are those that involve deception, manipulation, or misrepresentation of information or data to obtain an unauthorized or improper benefit or advantage1. Fraudulenttransactions can pose significant risks and losses for an organization, such as financial damages, legal liabilities, reputational damages, or operational disruptions2.

Enterprise resource planning (ERP) systems are integrated software applications that support the core business processes and functions of an organization, such as accounting, finance, human resources, supply chain, inventory, or customer relationship management3. ERP systems can facilitate the efficiency, accuracy, and security of business transactions, but they can also be vulnerable to fraudulent transactions, such as:

Creating fake vendors or customers and processing false invoices or payments

Manipulating or falsifying financial or accounting data or reports

Changing or deleting critical or sensitive information or records

Abusing or misusing access privileges or credentials

Bypassing or compromising the system controls or security measures4

The design of procedures to prevent fraudulent transactions within an ERP system should be based on the control environment. The control environment is the set of standards, processes, and structures that provide the basis for carrying out internal control across the organization. The control environment comprises the following elements:

The tone at the top, which reflects the leadership’s commitment and attitude towards internal control and ethical conduct

The organizational structure, which defines the roles and responsibilities, reporting lines, and authority levels for internal control

The human resource policies and practices, which ensure that the staff have the appropriate skills, competencies, and incentives for internal control

The risk assessment process, which identifies and evaluates the potential risks and threats to the organization’s objectives and transactions

The control activities, which are the specific policies, procedures, and mechanisms that prevent, detect, or correct errors or fraud in transactions

The information and communication systems, which provide reliable and timely data and information for internal control and decision-making

The monitoring and evaluation activities, which measure and report the performance and effectiveness of internal control and ensure continuous improvement

By basing the design of procedures to prevent fraudulent transactions within an ERP system on the control environment, the organization can:

Ensure that the procedures are aligned with the organization’s objectives, values, and expectations regarding internal control and fraud prevention

Provide clear and consistent guidance and instructions for the staff and stakeholders involved in the transactions and the ERP system

Implement adequate and appropriate controls and safeguards to mitigate the risks and vulnerabilities of the transactions and the ERP system

Monitor and evaluate the compliance and effectiveness of the procedures and the ERP system, and identify and address any issues or gaps

References = What is Fraud?, Fraud Risk Management - AICPA, What is ERP?, ERP Fraud: How to Prevent It - ERP Focus, [COSO – Control Environment - Deloitte], [How to use COSO to assess IT controls - Journal of Accountancy]

Risk culture encompasses the values, beliefs, and attitudes towards risk within an organization. It significantly influences how risk appetite is defined and communicated. Understanding the organization's risk culture ensures that the established risk appetite aligns with stakeholder expectations and supports effective risk management practices.

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

TheRecovery Point Objective (RPO)specifies the maximum tolerable period in which data might be lost due to an incident. In this case, the organization is indicating that it cannot afford to lose more than three hours of data, defining its RPO.

The best input to assess the inherent risk impact of leakage of customer data is the number of customer records held. Inherent risk impact is a measure of the potential severity or consequence of a risk event, before considering the existing controls. Inherent risk impact can be based on quantitative or qualitative factors, such as financial, operational, reputational, or legal factors.The number of customer records held is the best input, because it directly reflects the amount and type of data that could be leaked, and the potential harm or loss that could result from the leakage. The number of customer records held can also help to estimate the probability and frequency of the leakage, as well as the effectiveness and efficiency of the controls. The more customer records the organization holds, the higher the inherent risk impact of leakage, and the more controls the organization needs to implement and maintain. The other options are not the best input, although they may be related or influential to the inherent risk impact. The number of databases that host customer data is a measure of the complexity or diversity of the data storage and management systems, but it does not directly indicate the amount or type of data that could be leaked, or the potential harm or loss that could result from the leakage. The number of databases that host customer data may also vary depending on the design and configuration of the systems, which may not reflect the inherent risk impact. The number of encrypted customer databases is a measure of the security or protection of the data storage and management systems, but it is not an input to the inherent risk impact, rather it is an output or a result of the control implementation. The number of encrypted customer databases may also depend on the quality and reliability of the encryption methods and keys, which may not indicate the inherent risk impact. The number of staff members having access to customer data is a measure of the exposure or vulnerability of the data to internal threats, such as unauthorized or malicious actions by the staff members. The number of staff members having access to customer data can affect the inherent risk impact, but it is not the best input, as it does not account for the external threats, such as hackers or competitors, or the amount or type of data that could be leaked, or the potential harm or loss that could result from the leakage. References = What is Inherent Risk? You Could Be at Risk of a Data Breach | UpGuard, Data leakage: A data leak is an unintentional exposure of sensitive data on the internet. For example, an employee might upload customer data files to an unsecured server. Lack of encryption: This is the storing, sending, or transferring information without converting it into ciphertext first.

The most concerning factor for a risk practitioner reviewing risk action plans for documented IT risk scenarios is that many action plans were discontinued after senior management accepted the risk. Risk action plans are documents that define the roles, responsibilities, procedures, and resources for implementing the risk responses and strategies for the IT risk scenarios. Risk action plans help to reduce, transfer, avoid, or accept the IT risks, and to monitor and report on the IT risk performance and improvement. Discontinuing risk action plans after senior management accepted the risk is a major concern, because it may indicate that the risk acceptance decision was not based on a proper risk analysisor evaluation, or that the risk acceptance decision was not communicated or coordinated with the relevant stakeholders, such as the board, management, business units, and IT functions. Discontinuing risk action plans after senior management accepted the risk may also create challenges or risks for the organization, such as compliance, legal, reputational, or operational risks, or conflicts or inconsistencies with the organization’s risk appetite, risk objectives, or risk policies. The other options are not as concerning as discontinuing risk action plans after senior management accepted the risk, although they may also pose some difficulties or limitations for the risk management process. Individuals outside IT managing action plans for the risk scenarios, target dates for completion missing from some action plans, and senior management approving multiple changes to several action plans are all factors that could affect the quality and timeliness of the risk management process, but they donot necessarily indicate a lack of risk management accountability or oversight. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.4.1, page 4-32.

The type of control that has been applied when an organization provides legal text explaining the rights and expected behavior of users accessing a system from geographic locations that have strong privacy regulations is directive. A directive control is a control that guides or instructs the users or the staff on the policies, procedures, or standards that they need to follow or comply with when performing their tasks or activities. A directive control can help to prevent or reduce the risk of non-compliance, errors, or violations, by ensuring that the users or the staff are aware and informed of the expectations and requirements of the organization or the system. A directive control can also help to enforce the accountability and responsibility of the users or the staff, and to support the audit and monitoring of their actions and behaviors. Providing legal text explaining the rights and expected behavior of users accessing a system from geographic locations that have strong privacy regulations is an example of a directive control, as it informs the users of the legal obligations and consequences of using the system, and instructs them on how to protect their privacy and the privacy of others. Detective, preventive, and compensating are not the correct types of control, as they do not match the definition or the purpose of the control that has been applied. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 217.

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

The best course of action when a recent regulatory requirement has the potential to affect an organization’s use of a third party to supply outsourced business services is to conduct a gap analysis, as it involves comparing the current and desired states of compliance, and identifying any gaps or discrepancies that need to be addressed. Terminating the outsourcing agreement, identifying compensating controls, and transferring risk to the third party are not the best courses of action, as they may not be feasible, effective, or appropriate, respectively, and may require the prior knowledge of the compliance gaps and risks. References = CRISC Review Manual, 7th Edition, page 111.

The main benefit of using key risk indicators (KRIs) for an organization is that they provide an early warning that a risk threshold is about to be reached. KRIs are metrics that measure the likelihood and impact of risks, and help monitor and prioritize the most critical risks. KRIs also help to trigger timely and appropriate risk responses, before the risk becomes unmanageable orunacceptable. The other options are not the main benefit of using KRIs, although they may be secondary benefits or outcomes. KRIs signal that a change in the control environment has occurred, provide a basis to set the risk appetite for an organization, and assist in the preparation of the organization’s risk profile. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.4.1, page 4-36.

The risk associated with an asset after controls are applied can be expressed as a function of the likelihood and impact, as it helps to measure and quantify the residual risk level and exposure. Residual risk is the risk that remains after the implementation of controls or risk treatments. Residual risk can be calculated by multiplying the likelihood and impact of a risk event, where likelihood is the probability or frequency of the risk event occurring, and impact is the consequence or severity of the risk event on the asset or objective. Residual risk can be expressed as:

ResidualRisk=Likelihood×Impact

Expressing the risk associated with an asset after controls are applied as a function of the likelihood and impact helps to provide the following benefits:

It enables a data-driven and evidence-based approach to risk assessment and reporting, rather than relying on subjective or qualitative judgments.

It facilitates a consistent and standardized way of measuring and communicating risk levels and exposure across the organization and to the external stakeholders.

It supports the alignment of risk management and control activities with the organizational strategy and objectives, and helps to evaluate the achievement of the desired outcomes.

It helps to identify and prioritize the areas for improvement and enhancement of the risk management and control processes, and guide the development and implementation of corrective or preventive actions.

It provides feedback and learning opportunities for the risk management and control processes, and helps to foster a culture of continuous improvement and innovation.

The other options are not the best ways to express the risk associated with an asset after controls are applied. A function of the cost and effectiveness of controls is a measure of the inputs or outputs of therisk management and control processes, but it does not indicate the risk level or exposure. The likelihood of a given threat is a component of the risk calculation, but it does not reflect the impact or consequence of the threat. The magnitude of an impact is a component of the risk calculation, but it does not reflect the likelihood or probability of the risk event.References=Risk Assessment and Analysis Methods: Qualitative and Quantitative,IT Risk Resources | ISACA,Residual Risk: Definition, Formula & Management - Video & Lesson …

 According to the CRISC Review Manual1, single sign-on (SSO) is a method of authentication that allows a user to access multiple systems or applications with a single set of credentials. SSO can improve user convenience and productivity, but it also introduces some security risks. The greatest concern as a result of a single sign-on implementation is that unauthorized access may be gained to multiple systems, as this can compromise the confidentiality, integrity, and availability of the data and resources stored on those systems. If an attacker obtains the SSO credentials of a user, either by phishing, malware, or other means, they can Laccess all the systems or applications that the user is authorized for, without any additional authentication or verification. This can expose the organization to various threats, such as data leakage, theft, loss, corruption, manipulation, or misuse2345. References = CRISC Review Manual1, page 240, 253.

The principle of least privilege is a key concept in information security that aims to provide users with the minimum level of access—or permissions—necessary to perform their job functions. Byensuring that users only have the access they need, organizations can significantly reduce the risk associated with excessive access by authorized users.

Understanding Least Privilege

The principle of least privilege restricts access rights for users to the bare minimum permissions they need to perform their work. This minimizes the potential damage from accidents or malicious activities.

Least privilege should be applied to all user accounts, including administrative and service accounts.

Implementation

Implementing least privilege involves a detailed analysis of job functions and the necessary access required for each role.

Regularly review and update access permissions to ensure they remain aligned with current job responsibilities and organizational needs.

Mitigating Risk

By limiting access to only what is necessary, organizations can prevent users from having permissions that could be exploited, intentionally or unintentionally, to cause harm.

This also includes revoking unnecessary privileges when users change roles or no longer need access.

Comparison with Other Options

A. Monitoring user activity using security logs: While monitoring can detect inappropriate activity, it does not prevent it.

B. Revoking access for users changing roles: This is a necessary practice but does not address the initial allocation of excessive privileges.

D. Conducting periodic reviews of authorizations granted: Periodic reviews are important but are reactive rather than proactive.

References

Sybex-CISSP-Official-Study-Guide-9-Edition.pdf, p. 641, discussing the principle of least privilege and its implementation​​.

The risk owner is the person who should be accountable for any related losses to the organization, because they are the person who has the authority and responsibility to manage the risk and its associated controls.The risk owner is also the person who accepts the risk and its residual level, and who monitors and reports on the risk status and performance. The IT risk manager, the server administrator, and the risk practitioner are all involved in the riskmanagement process, but they are not the person who should be accountable for the risk and its outcomes, as they do not have the ultimate decision-making power and accountability for therisk. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.1.1, page 79

 Purpose of a Risk Register:

A risk register consolidates all identified risks, their status, and mitigation actions in one place. It serves as a tool for tracking and managing risks systematically.

 Facilitating Risk Management Functions:

By documenting risk scenarios, a risk register provides a comprehensive view of potential threats and their impact on the organization.

It enables effective communication and review of these scenarios with stakeholders, ensuring that all relevant parties are aware of and understand the risks.

 Engaging Stakeholders:

Reviewing the risk register with stakeholders helps in validating the risks, assessing their impact, and determining appropriate responses.

It fosters collaboration and ensures that risk management activities are aligned with the stakeholders' expectations and the organization's objectives.

 Comparing Other Functions:

Analyzing Risk Appetite:While important, this is not the primary function of a risk register.

Influencing Risk Culture:The risk register contributes to risk culture but is primarily a tracking and communication tool.

Articulating Senior Management's Intent:This is more related to policy and strategy documents, whereas the risk register is a practical tool for managing specific risks.

 References:

The CRISC Review Manual highlights the role of the risk register in consolidating risk information and facilitating stakeholder engagement (CRISC Review Manual, Chapter 2: IT Risk Assessment, Section 2.6 Risk Register)​​ .