CRISC Exam Dumps - Isaca Certification Questions and Answers

 Risk appetite is the most important factor to consider first when creating a comprehensive IT risk register, as it defines the amount and type of risk that the organization is willing to accept in pursuit of its objectives, and guides the identification, assessment, response, and monitoring of the IT risks. The other options are not the most important factors, as they are more related to theresources, actions, or methods of the IT risk management, respectively, rather than the strategy or direction of the IT risk management. References = CRISC Review Manual, 7th Edition, page 109.

Business Impact Analysis (BIA):

Purpose: A BIA is a systematic process to evaluate the potential effects of an interruption to critical business operations as a result of a disaster, accident, or emergency.

Identification of Consequences: It identifies critical resources and the consequences of their loss, allowing an organization to determine the operational and financial impacts of such losses.

Steps Involved in BIA:

Identify Critical Functions: Determine which business functions and processes are essential to the organization's operations.

Assess Impact: Evaluate the impact of losing these functions on the organization’s ability to operate.

Estimate Downtime Tolerance: Determine the maximum allowable downtime for critical functions before significant harm occurs.

Identify Dependencies: Document dependencies between systems, processes, and resources to understand how disruptions to one part affect the whole.

Comparison with Other Options:

Risk Management Action Plans: These are detailed plans developed to address identified risks but do not specifically focus on the impact of losing critical resources.

What-if Technique: This is a brainstorming technique used to explore potential risks and their impacts but is not as structured as a BIA.

Tabletop Exercise Results: These exercises simulate disaster scenarios to test response plans but do not provide the comprehensive impact analysis that a BIA does.

Best Practices:

Regular Updates: Regularly update the BIA to reflect changes in the business environment and operational dependencies.

Integration with DR/BC Plans: Ensure that findings from the BIA are integrated into disaster recovery (DR) and business continuity (BC) plans to enhance overall preparedness.

When proposing a risk acceptance framework for an organization, the most important consideration for the risk practitioner is to clearly define the individuals or roles authorized to approve risk acceptance. This ensures that the process is controlled, accountable, and aligned with the organization’s risk management policies.

Risk Acceptance Framework:

Purpose:A risk acceptance framework provides structured criteria and processes for deciding whether to accept a risk. This includes evaluating the risk against the organization's risk appetite and tolerance.

Authorization:Identifying who has the authority to accept risk is critical. This ensures that only those with the appropriate knowledge, experience, and understanding of the organization's risk appetite and strategic objectives can make these decisions.

Importance of Authorized Individuals:

Accountability:Clearly defined roles for risk acceptance ensure accountability. It is essential that those making the decisions are accountable for the outcomes and understand the potential impact of their decisions.

Consistency:By defining specific roles, the organization ensures consistency in risk acceptance decisions, reducing the likelihood of ad-hoc or inconsistent risk management practices.

Alignment with Strategy:Authorized individuals are typically those who understand the strategic objectives of the organization, ensuring that risk acceptance aligns with these goals.

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.

A service level agreement (SLA) is a contract between a SaaS vendor and a customer that defines the quality and availability of the SaaS service, as well as the responsibilities and obligations of both parties. An SLA is most important to include in a SaaS vendor agreement because it sets the expectations and standards for the SaaS service, provides a mechanism for measuring and monitoring the serviceperformance, and establishes the remedies and penalties for service failures or breaches. An SLA can also help to mitigate the risks and liabilities associated with SaaS delivery, such as data security, privacy, compliance, and disaster recovery. The other options are not the most important to include in a SaaS vendor agreement, although they may be beneficial or desirable depending on the context and nature of the SaaS service. An annual contract review is a process of evaluating and revising the SaaS vendor agreement to reflect the changing needs and circumstances of the customer and the vendor, but it is not a mandatory or essential element of the agreement. A requirement to adopt an established risk managementframework is a way of ensuring that the SaaS vendor follows the best practices and standards for identifying, assessing, and mitigating the risks related to the SaaS service, but it is not a specific or measurable term of the agreement. A requirement to provide an independent audit report is a way of verifying and validating the SaaS vendor’s compliance with the SLA and other contractual obligations, but it is not a direct or primary component of the agreement. References = SaaS Agreements: Key Contractual Provisions, SaaS Agreement: Everything You Need to Know, Essential checklist for SaaS agreement negotiations, KeyClauses To Understand and Evaluate in SaaS Contracts, SaaS Reseller Agreement: Everything You Need to Know

Introducing recovery control procedures is the best way to address the risk of an outage of the fraud detection system for an online payment processor, because it helps to restore the functionality and availability of the system as quickly and effectively as possible, and to minimize the impact and disruption to the business operations and customers. A fraud detection system is a system that monitors and analyzes the transactions and activities of an online payment processor, and detects and prevents any fraudulent or suspicious behavior, such as identity theft, money laundering, or chargebacks. An outage is a situation where the system is unavailable or inaccessible, due to factors such as technical failure, human error, or malicious attack. An outage of the fraud detection system may have severe consequences for the online payment processor, such as financial losses, reputational damage, customer dissatisfaction, or regulatory penalties. A recovery control procedure is a procedure that defines the steps and actions to be taken to recover the system from an outage, such as identifying the root cause, isolating the affected components, restoring the data and functionality, testing the system, and reporting the incident. Introducing recovery control procedures is the best way to address the risk, as it helps to ensure that the system is back online and operational as soon as possible, and that the risk exposure and impact are reduced and contained. Implementing continuous control monitoring, communicating the risk to management, and documenting a risk response plan are all possible ways to address the risk, but they are not the best way, as they do not directly address the recovery of the system from an outage, and they may not be sufficient or effective to mitigate the risk. References = Risk and Information Systems Control Study Manual, Chapter 5, Section 5.4.1, page 208

Key control indicators are designed to measure the operational effectiveness of controls, specifically their contribution to defense-in-depth strategies. This helps assess if controls are functioning as intended to mitigate identified risks, aligning withControl Effectiveness Monitoring.

Project risk register: A document that records the identified risks, their likelihood, impact, and mitigation strategies for a project1.

Project steering committee: A group of senior stakeholders and experts who oversee and support a project from a higher level2.

Risk mitigation actions: The measures taken to prevent, reduce, or transfer the risks that may affect a project3.

The most important objective of regularly presenting the project risk register to the project steering committee is to track the status of risk mitigation actions. Tracking the status of risk mitigation actions can help the project steering committee to:

Monitor and measure the performance and effectiveness of the risk management process and controls

Evaluate the progress and outcomes of the risk mitigation actions against the project goals and objectives

Identify and resolve any issues, challenges, or gaps in the risk mitigation actions

Provide guidance, feedback, and support to the project manager and the project team

Adjust or revise the risk mitigation actions as needed to reflect the changes in the project scope, schedule, budget, or environment

The other options are not the most important objective of regularly presenting the project risk register to the project steering committee, although they may be relevant or beneficial. Allocating budget for resolution of risk issues, which means assigning financial resources to address and resolve the risks that may affect a project, may be a part of the risk management process, but it is not the primary purpose of presenting the project risk register, which is more focused on tracking and reporting the risk status and actions. Determining if new risk scenarios have been identified, which means finding out if there are any additional or emerging risks that may impact a project, may be a useful outcome of presenting the project risk register, but it is not the main objective, which is more concerned with tracking and reporting the existing risk status and actions. Ensuring the project timeline is on target, which means verifying that the project is progressing according to the planned schedule and milestones, may be a benefit of presenting the project risk register, but it is not the key objective, which is more related to tracking and reporting the risk status and actions.

References = Risk Register: A Project Manager’s Guide with Examples [2023] • Asana, Project Steering Committee: Roles, Best Practices, Challenges, Risk Mitigation: Definition, Strategies, and Examples

According to the CRISC Review Manual (Digital Version), the organization’s culture is the most important factor affecting risk management in an organization, as it influences the riskawareness, risk attitude, risk behavior and risk communication of all stakeholders. The organization’s culture is defined as the shared values, beliefs, norms and expectations that guide the actions and interactions of the members of the organization. The organization’s culture affects how risk management is perceived, supported, implemented and integrated within the organization. A strong risk culture is one that:

Aligns with the organization’s vision, mission, strategy and objectives

Promotes a common understanding of risk and its implications for the organization

Encourages the identification, assessment, response and monitoring of risks at all levels

Fosters a proactive, collaborative and transparent approach to risk management

Empowers and rewards the stakeholders for taking ownership and accountability of risks

Enables continuous learning and improvement of risk management capabilities and maturity

References = CRISC Review Manual (Digital Version), Chapter 1: IT Risk Identification, Section 1.3: IT Risk Culture, pp. 23-251

The risk practitioner shouldfirst review the methodology of the BIAbecause the BIA identifies critical processes and the impacts of disruptions. This ensures that any identified risks are grounded in reliable, updated business impact data.

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According to the CRISC Review Manual1, the application owner is the person who has the authority and accountability for the achievement of the application objectives and the management of the associated risks. The application owner is responsible for defining the level of resiliency needed for the application, which is the ability of the application to recover from disruptions and continue to operate. The application owner is also responsible for accepting or rejecting the residual risks after the implementation of the disaster recovery controls, which are the measures to restore the application functionality and data in the event of a disaster. Therefore, the risk owner in this scenario is the application owner, as they are the ones who will be affected by the potential impact of the disaster on the application and its objectives. References = CRISC Review Manual1, page 194.

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 application owner must formally approve changes after reviewing impact—per ISACA's change management and governance frameworks that assign control over operational fallouts to functional owners .

Architecture is the design and structure of a system or a process, such as an IT system or a business process. Architecture documentation is the document that describes and explains the architecture, such as its components, functions, relationships, requirements, constraints, orstandards. Architecture documentation can help to understand, communicate, and improve the system or the process1.

An environment that lacks documentation of the architecture faces a great risk of unknown vulnerabilities, which are the weaknesses or flaws in the system or the process that could be exploited by threats or attackers, but are not identified or addressed by the organization. Unknown vulnerabilities can pose a serious risk to the organization, because they can:

Compromise the confidentiality, integrity, and availability of the system or the process, and the information or resources that it handles or supports

Cause financial, operational, reputational, or legal damages or losses to the organization, such as data breaches, fraud, errors, delays, or fines

Remain undetected or unresolved for a long time, and increase the exposure or impact of the risk over time

Require more resources or efforts to mitigate or recover from the risk, and reduce the efficiency or effectiveness of the risk management process23

Lack of documentation of the architecture can increase the risk of unknown vulnerabilities, because it can:

Prevent or hinder the identification and assessment of the vulnerabilities, and the evaluation and prioritization of the risks

Impede or delay the implementation and enforcement of the controls or safeguards to prevent or reduce the vulnerabilities, and the monitoring and reporting of the risk status and progress

Obstruct or limit the communication and coordination among the stakeholders, and the awareness and accountability of the risk owners and users

Restrict or hamper the review and improvement of the system or the process, and the learning and feedback of the risk management4

The other options are not the greatest risks associated with an environment that lacks documentation of the architecture, but rather some of the possible causes or consequences of it.Legacy technology systems are outdated or obsolete systems that are still in use by the organization, but are no longer supported or maintained by the vendors or developers. Legacy technology systems can be a cause of lack of documentation of the architecture, as they may have been developed or acquired without proper documentation, or the documentation may have been lost or discarded over time. Network isolation is the separation or segregation of a network or a system from other networks or systems, either physically or logically, to prevent or limit the access or communication between them. Network isolation can be a consequence of lack of documentation of the architecture, as it may result from the inability or difficulty to integrate or connect the system or the process with other systems or processes. Overlapping threats are threats that affect more than one system or process, or have similar or related sources or causes, such as natural disasters, cyberattacks, or human errors. Overlapping threats can be a consequence of lack of documentation of the architecture, as they may arise from the lack of understanding or coordination of the system or the process with other systems or processes. References =

Architecture Documentation - ISACA

Vulnerability - ISACA

The Risks of Not Having a Vulnerability Management Program

The Importance of Architecture Documentation - ISACA

[The Risk of Poor Document Control - ComplianceBridge]

[CRISC Review Manual, 7th Edition]

Information systems control deficiencies are the weaknesses or flaws in the design or implementation of the controls that are intended to ensure the confidentiality, integrity, availability, and reliability of the information systems and resources. Information systems control deficiencies may reduce the effectiveness or efficiency of the controls, and expose the organization to various risks, such as unauthorized access, data loss, system failure, etc.

Reviewing results from control self-assessment (CSA) is the best way to identify information systems control deficiencies, because CSA is a process of evaluating and verifying the adequacy and effectiveness of the information systems controls, using the input and feedback from the individuals or groups that are involved or responsible for the information systems activities or functions. CSA can help the organization to identify and document the information systems control deficiencies, and to align them with the organization’s information systems objectives and requirements.

CSA can be performed using various techniques, such as questionnaires, surveys, interviews, workshops, etc. CSA can also be integrated with the organization’s governance, risk management, and compliance functions, and aligned with the organization’s policies and standards.

The other options are not the best ways to identify information systems control deficiencies, because they do not provide the same level of detail and insight that CSA provides, and they may not be relevant or actionable for the organization.

Vulnerability and threat analysis is a process of identifying and evaluating the weaknesses or flaws in the organization’s assets, processes, or systems that can be exploited or compromised by the potential threats or sources of harm that may affect the organization’s objectives or operations. Vulnerability and threat analysis can help the organization to assess and prioritize the risks, and to design and implement appropriate controls or countermeasures to mitigate or prevent the risks, but it is not the best way to identify information systems control deficiencies, because it does not indicate whether the existing information systems controls are adequate and effective, and whether they comply with the organization’s policies and standards.

Control remediation planning is a process of selecting and implementing the actions or plans to address or correct the information systems control deficiencies that have been identified,analyzed, and evaluated. Control remediation planning involves choosing one ofthe following types of control responses: mitigate, transfer, avoid, or accept. Control remediation planning can help the organization to improve and optimize the information systems controls, and to reduce or eliminate the information systems control deficiencies, but it is not the best way to identify information systems control deficiencies, because it is a subsequent or follow-up process that depends on the prior identification of the information systems control deficiencies.

User acceptance testing (UAT) is a process of verifying and validating the functionality and usability of the information systems and resources, using the input and feedback from the endusers or customers that interact with the information systems and resources. UAT can help the organization to ensure that the information systems and resources meet the user or customer expectations and requirements, and to identify and resolve any issues or defects that may affect the user or customer satisfaction, but it is not the best way to identify information systems control deficiencies, because it does not focus on the information systems controls, and it may not cover all the relevant or significant information systems control deficiencies that may exist or arise. 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 186

CRISC Practice Quiz and Exam Prep

 Masking data before being transferred to the test environment is the best recommendation to address the situation where sensitive data from the production environment is required for testing purposes in non-production environments. Data masking is a technique that replaces sensitive data elements with realistic but fictitious data, preserving the format, structure, and meaning of the original data. Data masking ensures that the test data is sufficiently anonymized and de-identified, while still maintaining its functionality and validity for testing purposes. Data masking also reduces the risk of data leakage, exposure, or breach in the test environment, which may have lower security controls than the production environment. The other options are not the best recommendations, as they do not adequately protect the sensitive data or meet the testingrequirements. Enabling data encryption in the test environment may protect the data from unauthorized access, but it does not prevent the data from being decrypted by authorized users who may misuse or mishandle it. Implementing equivalent security in the test environment may be costly, complex, or impractical, and it may not be feasible to replicate the same level of security controls as in the production environment. Preventing the use of production data for test purposes may not be possible or desirable, as production data may be required to ensure the accuracy, reliability, and quality of the testing results. References = P = NP: Cloud dataprotection in vulnerable non-production environments …; Data masking secures sensitive data in non-production environments …; CRISC EXAM TOPIC 2 LONG Flashcards | Quizlet

Risk likelihood is most likely to be reassessed as a result of implementing a machine learning-based solution to monitor IT usage and analyze user behavior in an effort to detect internal fraud, as it may change the probability of fraud occurrence or detection, and affect the risk assessment and response. Risk culture, risk appetite, and risk capacity are not the most likely to be reassessed, as they are more stable and strategic aspects of risk management, and are not directlyinfluenced by the implementation of a specific solution. References = CRISC Review Manual, 7th Edition, page 108.

The best way to test the operational effectiveness of a data backup procedure is to perform a complete restoration of every file to a clean system and verify that there has not been any data corruption or loss. This will ensure that the backup procedure can successfully recover the data in the event of a disaster or incident. The other options are not sufficient to test the operational effectiveness of a data backup procedure, as they do not involve actually restoring the data and verifying its integrity and usability. References = How to review and test backup procedures to ensure data restoration; HOW TO TEST DATA BACKUPS: A BRIEF GUIDE; How to Test a Database Backup

The most important factor for an organization to consider when developing its IT strategy is the organizational goals and objectives. The organizational goals and objectives are the statements that define the purpose, direction, and desired outcomes of the organization. The organizational goals and objectives help to align the IT strategy with the organization’s mission, vision, values, and strategy, and to ensure that the IT strategy supports and enables the organization’s performance and improvement. The organizational goals and objectives also help to communicate and coordinate the IT strategy with the organization’s stakeholders, such as the board, management, business units, and IT functions, and to facilitate the IT decision-making and reporting processes. The other options are not as important as the organizational goals and objectives, although they may be related to the IT strategy. IT goals and objectives, the organization’s risk appetite statement, and legal and regulatory requirements are all factors that could affect the feasibility and sustainability of the IT strategy, but they do not necessarily reflect or influence the organization’s purpose, direction, and desired outcomes. References = Risk and Information Systems Control Study Manual, Chapter 1, Section 1.2.1, page 1-9.

The best way to ensure that access remains appropriate for an organization that practices the principle of least privilege is to review user access rights on a regular basis by obtaining an access control matrix and approval from the user’s manager. An access control matrix is a table that shows the access rights and permissions of each user or role for each resource or function. An access control matrix helps to verify that the users have the minimum level of access required to perform their duties, and to identify any unauthorized or excessive access rights. Approval from the user’s manager helps to confirm that the user’s access rights are consistent with their current role and responsibilities, and to authorize any changes or exceptions as needed. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 3, Section 3.2.2, page 1281

 Following a significant change to a business process, the risk practitioner should advise the risk owner to first conduct a risk analysis to evaluate the current level of risk exposure and compare it with the previous level. This will help to verify whether the change has indeed reduced the risk, and by how much. The risk analysis will also help to identify any new or residual risks that may have emerged as a result of the change. The other options are not the first actions to take, but rather the subsequent steps after conducting a risk analysis. Reviewing the key risk indicators, updating the risk register, and reallocating risk response resources are all important activities, but they depend on the outcome of the risk analysis. References = CRISC EXAM TOPIC 2 LONG; CRISC Q&A Domain 1; Managing Change Risk - Oliver Wyman

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

The best way to mitigate the risk to IT infrastructure availability is to establish a disaster recovery plan (DRP), because a DRP is a document that defines the procedures and resources needed to restore the IT infrastructure and resume the critical business functions in the event of a disaster or disruption. A DRP helps to minimize the downtime, data loss, and financial impact of a disaster, and ensures the continuity of operations and services. The other options are not the best ways to mitigate the risk to IT infrastructure availability, although they may also be helpful in supporting the DRP. Establishing recovery time objectives (RTOs), maintaining a current list of staff contact details, and maintaining a risk register are examples of planning or monitoring activities that aim to define the requirements, roles, and responsibilities for the disaster recovery process, but they do not address the actual implementation or execution of the DRP. References = CRISC: Certified in Risk & Information Systems Control Sample Questions

Residual riskrefers to the risk that remains after mitigation measures have been applied. It represents the exposure that an organization decides to accept, transfer, or further address, aligning with its risk appetite and tolerance.

 The next step after determining that a key control does not meet design expectations is to document the finding in the risk register, because this helps to record and track the information about the identified risk, such as its description, likelihood, impact, response, and status. A key control is a control that addresses a significant risk or supports a critical business process or objective. A control design expectation is a criterion or requirement that defines how the control should operate or perform to achieve its objective. If a key control does not meet its design expectation, it means that there is a gap, weakness, or deficiency in the control that may compromise its effectiveness or efficiency, and increase the risk exposure or impact. By documenting the finding in the risk register, the risk practitioner can communicate and report the risk issue to the relevant stakeholders, such as the risk owner, the management, or the auditor, and initiate the appropriate risk response actions, such as modifying the design of the control, implementing a compensating control, or accepting the risk. The other options are not the best next steps after determining that a key control does not meet design expectations. Invoking the incident response plan is a reactive measure that is triggered when a risk event occurs or is imminent, and requires immediate action to contain, mitigate, or recover from the incident. However, in this case, the risk event has not occurred yet, and there may be time to prevent or reduce it by improving the control design. Re-evaluating key risk indicators is a monitoring activity that measures and evaluates the level and impact of risks, and provides timely signals that something may be going wrong or needs urgent attention. However, in this case, the risk practitioner has already identified the risk issue, and needs to document and address it, rather than re-evaluate it. Modifying the design of the control is a possible risk response action that may be taken to improve the control and reduce the risk, but it is not the next step after determining that the key control does not meet design expectations. The next step is to document the finding in the risk register, and then decide on the best risk response action, which may or may not be modifying the design of the control, depending on the cost-benefit analysis, the risk assessment, and the risk response strategy. References = Risk IT Framework, ISACA, 2022, p. 13

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.

 Risk Appetite:

Risk appetite is the amount and type of risk that an organization is willing to take in order to meet its objectives. It reflects the organization’s risk tolerance and guides decision-making at all levels.

 Impact of Market Changes:

A change in the market situation can alter the risk landscape, potentially affecting the organization’s ability to achieve its objectives. This might necessitate a reassessment of what level of risk is acceptable.

Senior management needs to ensure that the risk appetite remains aligned with the new market conditions and organizational goals.

 Reevaluation Process:

Reevaluating the risk appetite involves assessing the organization's capacity to bear risk and determining if the current acceptable risk levels are still appropriate.

This might involve more conservative or aggressive risk-taking strategies based on the new market dynamics.

 Other Considerations:

Risk Classification:This categorizes risks but does not directly address changes in acceptable risk levels.

Risk Policy:While important, the policy outlines the approach to managing risk and is influenced by the risk appetite.

Risk Strategy:This defines how risks are managed but should be aligned with the risk appetite.

 References:

The CRISC Review Manual emphasizes the importance of aligning risk appetite with the organization’s strategic objectives and market conditions (CRISC Review Manual, Chapter 1: Governance, Section 1.10 Risk Appetite, Tolerance, and Capacity) .

The risk practitioner’s most important responsibility in managing risk acceptance that exceeds risk tolerance is to verify authorization by senior management. Risk acceptance is a risk response strategy that involves acknowledging and agreeing to bear the risk and its potential consequences. Risk tolerance is the acceptable or allowable level of variation or deviation from the expected or desired outcomes or objectives. When the risk acceptance exceeds the risk tolerance, it means that the organization is taking on more risk than it can handle or afford. Therefore, the risk practitioner should verify that the risk acceptance is authorized by senior management, who have the authority and accountability for making risk management decisions and ensuring that they are aligned with the organizational strategy and objectives. The other options are not as important as verifying authorization by senior management, as they are related to the adjustments, conditions, or documentation of the risk acceptance, not the approval or validation of the risk acceptance. References = Risk and Information Systems Control Study Manual, Chapter 3: IT Risk Response, Section 3.2: IT Risk Response Options, page 133.

An IT risk register is a document that records and tracks the IT risks that have been identified and assessed by the risk practitioner. It contains information such as the risk description, the risk owner, the risk level, the risk response, the risk status, and the risk monitoring and reporting activities. An IT risk register is a dynamic document that needs to be updated regularly to reflect the changes in the IT environment and the risk landscape. When a software upgrade renders an existing key control ineffective, the risk practitioner should update the IT risk register to indicate the new risk level, the new risk response, and the new risk monitoring and reporting activities. This will ensure that the IT risk register remains accurate, relevant, and useful for IT risk management. Updating the IT risk register is more important than updating the audit engagement letter, the risk profile, or the change control documentation, because the IT risk register is the primary source of information and guidance for managing IT risks. The audit engagement letter is a formal agreement between the auditor and the auditee that defines the scope, objectives, and terms of the audit. The risk profile is a summary of the organization’s risk appetite, risk tolerance, and risk exposure. The change control documentation is a record of the changes that have been made to the IT systems and processes. These documents are important for IT risk management, but they are not as critical as the IT risk register for updating when a key controlbecomes ineffective. References = Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Assessment, Section 2.4: Risk Register, pp. 69-711

Residual risk is the risk that remains after applying risk responses, such as avoidance, mitigation, transfer, or acceptance. It represents the level of exposure that the organisation is willing to tolerate or assume. Residual risk should be aligned with the organisation’s risk appetite and risk tolerance, which are determined by senior management. Therefore, the best way to obtain senior management support for investment in a control implementation would be to articulate the reduction in residual risk that the control would achieve. This would demonstrate how the control would help the organisation meet its riskobjectives and reduce the likelihood or impact of adverse events. References = ISACA CRISC Review Manual, 7th Edition, Chapter 1, Section 1.3.2, page 25.

An incident is an unplanned event that disrupts or degrades the normal operation or performance of an IT service, system, or network1. An incident can cause various negative impacts, such as service outages, data losses, security breaches, or customer dissatisfaction2. An incident can recur if the underlying cause or problem of the incident is not properly identified and resolved3.

The best course of action to help reduce the probability of an incident recurring is to perform root cause analysis. Root cause analysis is a systematic process of finding and eliminating the fundamental cause or problem that led to the incident4. Root cause analysis can help to:

Prevent or minimize the recurrence of the incident by addressing the source of the problem, not just the symptoms or effects

Identify and implement corrective or preventive actions that can effectively resolve or mitigate the problem

Learn from the incident and improve the IT service, system, or network quality and reliability

Enhance the incident management and problem management processes and capabilities5

References = What is an Incident?, Incident Management - Wikipedia, Problem Management - Wikipedia, Root Cause Analysis - Wikipedia, Root Cause Analysis: A Guide for Business Leaders

Strategic decisions on risk management are the decisions that involve setting the direction, objectives, and priorities for risk management within an organization, as well as aligning them with the organization’s overall strategy, vision, and mission1. Strategic decisions on riskmanagement also involve defining the organization’s risk appetite and tolerance, which are the amount and level of risk that the organization is willing and able to accept to achieve its goals2. The responsibility for strategic decisions on risk management should belong to the executive management team, which is the group of senior leaders who have the authority and accountability for the organization’s performance and governance3. The executive management team has the best understanding of the organization’s strategic context, environment, and stakeholders, and can make informed and balanced decisions that consider the benefits and costsof risk-taking4. The executive management team also has the ability and responsibility to communicate and cascade the strategic decisions on risk management to the rest of the organization, and to monitor and evaluate their implementation and outcomes5. The chief information officer (CIO), the audit committee, and the business process owner are not the best choices for being responsible for strategic decisions on risk management, as they do not have the same level of authority and accountability as the executive management team. The CIO is the senior leader who oversees the organization’s information andtechnology strategy, resources, and systems6. The CIO may be involved in providing input and feedback to the executive management team on the strategic decisions on risk management, especially those related to IT risk, but they do not have the final say or the overall responsibility for them. The audit committee is a subcommittee of the board of directors that oversees the organization’s financial reporting, internal controls, and external audits7. The audit committee may be involved in reviewing and approving the strategic decisions on risk management, as well as ensuring their compliance with the relevant laws and standards, but they do not have the authority or the expertise to make or implement them. The business process owner is the person who has the authority and accountability for a business process that supports or enables the organization’s objectives and functions. The business process owner may be involved in executing and reporting on the strategic decisions on risk management, as well as identifying and mitigating the risks related to their business process, but they do not have the perspective or the influence to make or communicate them. References = 1: Strategic Risk Management: Complete Overview (With Examples)2: [Risk Appetite and Tolerance - ISACA] 3: [Senior Management - Definition, Roles andResponsibilities] 4: Stanford Strategic Decision and Risk Management | Stanford Online5: A 7-Step Process for Strategic Risk Management — RiskOptics - Reciprocity6: [Chief Information Officer (CIO) - Gartner ITGlossary] 7: [Audit Committee - Overview, Functions, and Responsibilities] : [Business Process Owner - Gartner IT Glossary] : [Business Process Owner - Roles and Responsibilities] : [Risk and Information Systems Control Study Manual, Chapter 1: IT Risk Identification, Section 1.1: IT Risk Concepts, pp. 17-19.]

Biased recommendations from AI models pose significant risks to decision-making and organizational ethics. Such biases can propagate systemic issues and impact regulatory compliance, emphasizing the need for robust controls in AI development and deployment underEmerging Technology Risks.

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

A change management process is a set of procedures and activities that aim to ensure that changes in an organization’s IT systems and services are implemented in a controlled and coordinated manner. The effectiveness of a change management process can be measured by how well it reduces the risks and costs associated with changes, and how well it supports the business objectives and customer expectations. One of the best metrics to demonstrate the effectiveness of a change management process is the percent of unauthorized changes. Unauthorized changes are changes that are made without following the established change management process, such as obtaining approval, documenting the change, testing the change, and communicating the change. Unauthorized changes can introduce errors, defects, security breaches, and disruptions to the IT systems and services, and can negatively affect the business performance and customer satisfaction. Therefore, a low percent of unauthorized changes indicates that the change management process is effective in ensuring that changes are properly planned, approved, executed, and monitored. The other options are not the best metrics to demonstrate the effectiveness of a change management process, as they do not directly reflect the quality and control of the changes. An increase in the frequency of changes may indicate that the organization is agile and responsive to the changing business needs and customer demands, but it does not necessarily mean that the changes are well-managed and beneficial. An increase in the number of emergency changes may indicate that the organization is able to handle urgent and critical situations, but it may also suggest that the organization is reactive and lacks proper planning and analysis of the changes. The average time to complete changes may indicate the efficiency and speed of the change management process, but it does not measure the effectiveness and value of the changes. References = CRISC Review Manual, pages 156-1571; CRISC Review Questions, Answers & Explanations Manual, page 712

Optimizing resource utilization is the main reason for prioritizing IT risk responses, as it helps to allocate resources to the most critical and urgent risks. The other options are not the main reasons for prioritizing IT risk responses, although they may be related to the process.

 A risk portfolio is a collection of risks that an organization faces or may face in the future. Analyzing trends in key control indicators (KCIs) best enables a risk practitioner to proactively identify impacts on an organization’s risk portfolio, as KCIs measure and monitor the performance and effectiveness of the risk controls that are implemented to mitigate the risks. By analyzing the trends in KCIs, a risk practitioner can assess the current and potential risk exposure of the organization, and identify any changes or emerging risks that may affect the risk portfolio. Analyzing trends in KCIs can also help to evaluate the cost and benefit of the risk controls, and to determine the need for enhancing, modifying, or implementing new controls. References = CRISC: Certified in Risk & Information Systems Control Sample Questions, Question 246. Most Asked CRISC Exam Questions and Answers, Question 10. ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, Question 246. CRISC by Isaca Actual Free Exam Q&As, Question 9.

The most appropriate key risk indicator (KRI) for backup media that is recycled monthly is the percentage of failed restore tests. A KRI is a metric that measures the likelihood or impact of a risk, and provides an early warning signal of a potential risk event. The percentage of failed restore tests is a KRI that reflects the quality and reliability of the backup media, and indicates the possibility of data loss or corruption. A high percentage of failed restore tests would suggest that the backup media is not functioning properly, and that the risk of data unavailability is increasing. Therefore, this KRI would help the risk practitioner to monitor the risk and take corrective actions as needed. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 5, Section 5.2.2, page 235.

The control owner is the person who is responsible for designing, implementing, monitoring, and maintaining a control. The control owner is best suited to determine whether a new control properly mitigates data loss risk within a system, as they have the most knowledge and authority over the control. The control owner should also evaluate the effectiveness and efficiency of the control and report any issues or gaps to the risk owner.

The other options are not the best suited to determine whether a new control properly mitigates data loss risk within a system. The data owner is the person who has the accountability and authority over the data and its classification. The data owner may not have the technical expertise or access to evaluate the new control. The risk owner is the person who has the accountability and authority to manage a specific risk. The risk owner may not have the detailed knowledge orinvolvement in the new control. The system owner is the person who has the accountability and authority over the system and its operation. The system owner may not have the direct responsibility or oversight of the new control. References = CRISC TOPIC 3 EXAM SHORT Flashcards, CRISC-1-50 topic3 Flashcards, CRISC Certified in Risk and Information Systems Control – Question609

According to the FIC Article by FSCA, accountable institutions remain fully accountable, responsible and liable for any compliance failures that may result from or be associated with an outsourcing arrangement and as such, liability and/or culpability for non-compliance with the FIC Act obligations cannot be transferred to a third-party service provider2. Therefore, even if a business process is outsourced to a cloud service provider, the organization still has the ultimate responsibility and accountability for the risk associated with the outsourced process. The other options are not correct, as they imply that the cloud service provider can take over the accountability or responsibility for the risk, or that the organization can mitigate the risk by acquiring insurance, which is not the case.

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

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

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

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

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

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

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

The most important benefit of key risk indicators (KRIs) is providing an early warning to take proactive actions, because this helps organizations to prevent or mitigate potential risks that may impact their operations, objectives, or performance. KRIs are specific metrics that measure the level and impact of risks, and provide timely signals that something may be going wrong or needs urgent attention. By monitoring and analyzing KRIs, organizations can identify and assess emerging or existing risks, and initiate appropriate risk responses before the risks escalate intosignificant issues. This can enhance the organization’s resilience, competitiveness, and value creation. The other options are less important benefits of KRIs. Assisting in continually optimizing risk governance is a benefit of KRIs, but it is not the most important one. Risk governance is the framework and process that defines how an organization manages its risks, including the roles, responsibilities, policies, and standards. KRIs can help to evaluate and improve the effectiveness and efficiency of risk governance, but they are not the only factor that influences it. Enabling the documentation and analysis of trends is a benefit of KRIs, but it is not the most important one. Documenting and analyzingtrends can help organizations to understand the patterns, causes, and consequences of risks, and to learn from their experiences. However, this benefit is more relevant for historical or retrospective analysis, rather than for proactive action. Ensuring compliance with regulatory requirements is a benefit of KRIs, but it is not the most important one. Compliance is the adherence to the laws, regulations, and standards that apply to an organization’s activities and operations. KRIs can help to monitor and demonstrate compliance, but they are not the only tool or objective for doing so. References = Why Key Risk Indicators Are Important for Risk Management 1

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 person who should be accountable for resolving the situation where a root cause analysis indicates a major service disruption due to a lack of competency of newly hired IT system administrators is the chief information officer (CIO). The CIO is the senior executive who is responsible for the overall management and governance of the IT function within the organization, including the IT strategy, objectives, policies, processes, and resources. The CIO is also accountable for the performance and value of the IT services and systems, and for ensuring that they meet the needs and expectations of the business and its stakeholders. The CIO should be accountable for resolving the situation, because it involves a major IT service disruption that could affect the organization’s operations and reputation, and because it is related to the IT staff competency and capability, which are under the CIO’s authority and responsibility. The other options are not as accountable as the CIO, although they may have some roles or involvement inthe situation. The HR training director, the business process owner, and the HR recruitment manager are not directly responsible for the IT function or the IT service delivery, and they may not have the authority or the expertise to resolve the situation. References = Risk and Information Systems Control Study Manual, Chapter 2, Section 2.1.1, page 2-3.

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

Identifying risk events is essential for developing realistic and relevant risk scenarios. This step enables the creation of scenarios that reflect actual vulnerabilities and potential disruptions, adhering to the CRISC's focus onRisk Identification.

The best way to ensure ongoing control effectiveness is to measure trends in control performance. This will help to monitor and evaluate how well the controls are achieving their objectives, and to identify any deviations or anomalies that may indicate control failures or weaknesses. Measuring trends in control performance also helps to provide feedback and assurance to the stakeholders and decision makers, and to support continuous improvement andoptimization of the control environment. Establishing policies and procedures, periodically reviewing control design, and obtaining management control attestations are good practices, but they are not the best way to ensure control effectiveness. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 3, Section 3.1.1.2, page 1071

1: ISACA Certified in Risk and Information Systems Control (CRISC®) Exam Guide, Answer to Question 650.

Risk appetite is defined as "the amount of risk that an organization is willing to accept in pursuit of its objectives, before action is deemed necessary to reduce the risk."1 It represents a balance between the potential benefits of innovation and the threats that change inevitably brings. Risk appetite reflects the organization’s risk attitude and its willingness to accept risk in specific scenarios, with a governance model in place for risk oversight. Risk appetite helps to guide the organization’s approach to risk and risk management, and to align its risk decisions with its business objectives and context. The other options are not the best descriptions of risk appetite, as they are either too vague (the effective management of risk and internal control environments), too narrow (acceptable variation between risk thresholds and business objectives), or confusing (the acceptable variation relative to the achievement of objectives). References = Risk Appetite vs. Risk Tolerance: What is the Difference?