CRISC Exam Dumps - Isaca Certification Questions and Answers

A risk response is the action or plan that is taken to address a specific risk that has been identified, analyzed, and evaluated. It can be one of the following types: mitigate, transfer, avoid, or accept.

The highest priority when developing a risk response is to ensure that it aligns with the organization’s risk appetite, which is the amount and type of risk that the organization is willing to accept in pursuit of its goals. The risk appetite is usually expressed as a range or a threshold, and it is aligned with the organization’s strategy and culture.

Aligning the risk response with the organization’s risk appetite ensures that the risk response is consistent, appropriate, and proportional to the level and nature of the risk, and that it supports the organization’s objectives and values. It also helps to optimize the balance between risk and return, and to create and protect value for the organization and its stakeholders.

The other options are not the highest priority when developing a risk response, because they do not address the fundamental question of whether the risk response is suitable and acceptable for the organization.

The risk response addresses the risk with a holistic view means that the risk response considers the interrelationships and dependencies among the risk sources, events, impacts, and responses, and the potential secondary and residual effects of the risk response. This is important to ensure that the risk response is comprehensive and effective, and that it does not create new or unintended risks, but it is not the highest priority when developing a risk response, because it does not indicate whether the risk response is aligned with the organization’s risk appetite.

The risk response is based on a cost-benefit analysis means that the risk response compares the expected costs and benefits of implementing the risk response, and selects the risk response that provides the most favorable net outcome. This is important to ensure that the risk response is efficient and economical, and that it maximizes the return on investment, but it is not the highest priority when developing a risk response, because it does not indicate whether the risk response is aligned with the organization’s risk appetite.

The risk response is accounted for in the budget means that the risk response is included in the financial plan and allocation of resources for the organization or the project. This is important toensure that the risk response is feasible and realistic, and that it has the necessary funding and support, but it is not the highest priority when developing a risk response, because it does not indicate whether the risk response is aligned with the organization’s risk appetite. References =

ISACA, CRISC Review Manual, 7th Edition, 2022, pp. 29-30, 34-35, 38-39, 44-45, 50-51, 54-55

ISACA, CRISC Review Questions, Answers & Explanations Database, 2022, QID 147

The percentage of IT systems routinely running at peak utilization serves as a leading indicator of potential future availability issues. Systems operating at or near full capacity are more susceptible to performance degradation or outages, which can impede their ability to meet service level agreements (SLAs). Monitoring this KRI allows organizations to proactively address capacity constraints before they impact system availability.

Risk mitigation is a proactive business strategy to identify, assess, and mitigate potential threats or uncertainties that could harm an organization’s objectives, assets, or operations1. It entails specific action plans to reduce the likelihood or impact of these identified risks2.

There are several recognized ways to mitigate risk, such as accepting, avoiding, hedging, transferring, or reducing the risk3. Among the options given, only C is an example of risk reduction, which involvesimplementing controls or safeguards to minimize the negative effects of the risk3. Change and configuration management processes are methods to ensure that changes to the IT systems or infrastructure are properly authorized, documented, tested, and implemented, and that the configuration of the IT assets is consistent and accurate. These processes can help prevent or detect errors, defects, or vulnerabilities that could compromise the IT performance, security, or availability.

The other options are not examples of risk mitigation, but rather risk avoidance (A), risk transfer (B), or risk acceptance (D). Risk avoidance means eliminating the risk entirely by not engaging in the activity that causes the risk3. Not providing capability for employees to work remotely could avoid the risk of data breaches or network issues, but it could also limit the productivity and flexibility of the workforce. Risk transfer means shifting the responsibility or burden of the risk to another party, such as a vendor or an insurer3. Outsourcing the IT activities and infrastructure could transfer the risk of IT failures or incidents to the service provider, but it could also introduce new risks such as vendor dependency or loss of control. Risk acceptance means acknowledging the risk and its consequences without taking any action to address it3. Taking out insurance coverage for IT-related incidents could provide some financial compensation in case of a loss, but it does not reduce the likelihood or impact of the risk itself. References =

5 Key Risk Mitigation Strategies (With Examples) | Indeed.com

10 Risk Mitigation techniques you need to know - Stakeholdermap.com

Risk Mitigation Strategies: Types & Examples (+ Free Template)

[Change and Configuration Management - ISACA]

According to the CRISC Review Manual (Digital Version), risk management strategies are primarily adopted to achieve acceptable residual risk levels, which are the remaining risk levels after implementing risk response actions. Residual risk levels should be aligned with the organization’s risk appetite and risk tolerance, which are the amount and type of risk that the organization is willing to accept in pursuit of its objectives and the acceptable variation in outcomes related to specific performance measures linked to objectives. Risk management strategies are the approaches or methods used to address risks, such as avoidance, mitigation, transfer, sharing, or acceptance. Risk management strategies should be based on a cost-benefit analysis of the alternatives available and the value of the assets at risk.

References = CRISC Review Manual (Digital Version), Chapter 3: IT Risk Response, Section 3.3: Risk Response Options, pp. 166-1691

New risk exposures due to changes in the business environment are the possibilities and impacts of new or emerging threats or opportunities that may affect the organization’s objectives, performance, or value creation, as a result of changes in the internal or external factors that influence the organization’s operations, such as technology, competition, regulation, or customer behavior12.

The most helpful tool in identifying new risk exposures due to changes in the business environment is a SWOT analysis, which is a technique that involves identifying and analyzing the strengths, weaknesses, opportunities, and threats (SWOT) that are relevant to the organization’s situation, goals, and capabilities34.

A SWOT analysis is the most helpful tool because it helps the organization to scan and assess the business environment, and to identify and prioritize the new or emerging risk exposures that may arise from the changes in the environment34.

A SWOT analysis is also the most helpful tool because it helps the organization to align and adapt its strategy and actions to the changes in the environment, and to leverage its strengths and opportunities, and mitigate its weaknesses and threats34.

The other options are not the most helpful tools, but rather possible sources or inputs that may be used in a SWOT analysis. For example:

Standard operating procedures are documents that describe the routine tasks and processes that are performed by the organization, and the policies and standards that govern them56. However, these documents are not the most helpful tools because they may not reflect or capture the changes in the business environment, and they may need to be revised or updated to address the new or emerging risk exposures56.

Industry benchmarking is a technique that involves comparing and contrasting the performance and practices of the organization with those of the similar or leadingorganizations in the same or related industry, and identifying the gaps or opportunities for improvement78. However, this technique is not the most helpful tool because it may not provide a comprehensive or holistic view of the business environment, and it may not align with the organization’s specific situation, goals, or capabilities78.

Control gap analysis is a technique that involves assessing and evaluating the adequacy and effectiveness of the controls that are designed and implemented to mitigate the risks, and identifying and addressing the areas or aspects that need to be improved or added . However, this technique is not the most helpful tool because it is reactive rather than proactive, and it may not identify or anticipate the new or emerging risk exposures that may result from the changes in the business environment . References =

1: Risk IT Framework, ISACA, 2009

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

3: SWOT Analysis - ISACA1

4: SWOT Analysis: What It Is and When to Use It2

5: Standard Operating Procedure - Wikipedia3

6: How to Write Effective Standard Operating Procedures (SOP)4

7: Benchmarking - Wikipedia5

8: Benchmarking: Definition, Types, Process, Advantages & Examples6

Control Gap Analysis - ISACA7

Control Gap Analysis: A Step-by-Step Guide8

A root cause analysis is a systematic process of identifying the underlying factors that caused the noncompliant conditions during the review of a control procedure. A root cause analysis can help to prevent the recurrence of the noncompliance, improve the effectiveness of the control procedure, and enhance the risk management process. A root cause analysis can be performed using various tools and techniques, such as the 5 whys, fishbone diagram, Pareto chart, or fault tree analysis. The other options are not as appropriate as a root cause analysis, because they do not address the source of the problem, but rather the symptoms or consequences of the noncompliance. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.3.3, page 130.

The best recommendation for a risk practitioner upon learning that an employee inadvertently disclosed sensitive data to a vendor is to invoke the incident response plan. An incident responseplan is a document that defines the roles, responsibilities, procedures, and resources fordetecting, analyzing, containing, eradicating, recovering, and reporting on security incidents that could affect the organization’s IT systems or data. An incident response plan helps to protect and restore the confidentiality, integrity, and availability of the organization’s information assets, and to comply with the relevant laws, regulations, standards, and contracts. Invoking the incident response plan is the best recommendation, because it helps to respond to and mitigate the security incident, and to minimize the damage and impact of the data disclosure. Invoking the incident response plan also helps to communicate and coordinate the incident response actions and strategies with the internal and external stakeholders, such as the data owners, users, custodians, and regulators, and to report and disclose the incident as required. The other options are not as effective as invoking the incident response plan, although they may be part of or derived from the incident response plan. Enrolling the employee in additional security training, conducting an internal audit, and instructing the vendor to delete the data are all examples of corrective or preventive actions, which may help to prevent or deter the recurrence of the data disclosure, or to verify or validate the data security, but they do not necessarily address or resolve the current security incident. References = Risk and Information Systems Control Study Manual, Chapter 5, Section 5.4.1, page 5-32.

A risk practitioner should evaluate the relevance of the evolving threats to the organization’s industry, as this is the best course of action to understand the current and future risk landscape, and to align the risk management strategy accordingly. By evaluating the relevance of the evolving threats, the risk practitioner can determine the impact and likelihood of the threats affecting the organization’s objectives, assets, and processes, and prioritize the most critical and urgent risks. The risk practitioner can also identify the gaps and weaknesses in the existing controls, and recommend appropriate risk response measures to mitigate the threats. The other options are not as good as evaluating the relevance of the evolving threats, because they do not address the root cause of the rising security incidents, but rather focus on the symptoms or consequences of the incidents. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.2.1, page 85.

The risk owner holds ultimate accountability for risk treatment, as they are responsible for decisions regarding the management and mitigation of the risk. This is a fundamental principle ofRisk Ownership and Accountabilitywithin the CRISC framework.

After entering a large number of low-risk scenarios into the risk register, it is most important for the risk practitioner to analyze changes to aggregate risk. Aggregate risk is the total amount and type of risk that the organization faces or accepts, considering all the individual and interrelated risk scenarios. Aggregate risk helps to measure and monitor the organization’s risk profile, riskappetite, and risk performance, and to support the risk decision-making and reporting processes. Analyzing changes to aggregate risk is important after entering a large number of low-risk scenarios, because even though the individual risk scenarios may have low likelihood or impact, they may still have a significant cumulative or combined effect on the organization’s objectives or operations. Analyzing changes to aggregate risk also helps to identify and prioritize the most critical or relevant risk scenarios, and to select the most appropriate and effective risk responses and strategies. The other options are not as important as analyzing changes to aggregate risk, although they may be part of or derived from the risk analysis process. Preparing a follow-up risk assessment, recommending acceptance of the risk scenarios, and reconfirming risk tolerance levels are all activities that can help to implement or update the risk management process, but they are not the most important after entering a large number of low-risk scenarios. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.3.1, page 4-25.

The main benefit of using a top-down approach to develop risk scenarios is that it establishes the relationship between risk events and organizational objectives. A top-down approach is a method of risk identification and analysis that starts with the organization’s strategic objectives and then identifies the potential risk events that could affect or prevent the achievement of those objectives. A top-down approach helps to establish the relationship between risk events and organizational objectives, because it links the risk scenarios to the organization’s mission, vision, values, and strategy, and it prioritizes the risk scenarios based on their impact and relevance to the organization’s objectives. A top-down approach also helps to align and communicate the risk scenarios with the organization’s stakeholders, such as the board, management, and business units, and to facilitate the risk response and monitoring activities. The other options are not the main benefit of using a top-down approach, although they may be part of or derived from the top-down approach. Describing risk events specific to technology used by the enterprise, using hypothetical and generic risk events specific to the enterprise, and helping management and the risk practitioner to refine risk scenarios are all activities or outcomes that could be performed or achieved by using a top-down approach, but they are not the primary purpose or result of the top-down approach. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.2.1, page 4-13.

 Building Key Risk Indicators (KRIs):

KRIs are metrics used to provide an early signal of increasing risk exposure in various areas of an organization.

 Importance of Representative Data Sets:

To ensure KRIs are accurate and meaningful, it is critical that the data used is representative of the entire population or relevant subset of activities being monitored.

Representative data ensures that the KRIs reflect the true state of risk and are not biased or incomplete.

 Impact on KRIs:

Using representative data sets improves the reliability and validity of KRIs, enabling better risk detection and management.

It ensures that the KRIs provide a realistic view of potential risk trends and patterns.

 Comparing Other Data Sources:

Business Process Owners:While they provide valuable insights, data from them alone may not be representative.

Industry Benchmark Data:Useful for comparisons but not specific to the organization’s unique context.

Data Automation Systems:Helpful for efficiency but must ensure the data is representative.

 References:

The CRISC Review Manual emphasizes the importance of using representative data to build effective KRIs (CRISC Review Manual, Chapter 3: Risk Response and Mitigation, Section 3.11 Data Collection Aggregation Analysis and Validation) ​​.

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

The best metric to verify adherence to the policy that requires critical security patches to be deployed in production within three weeks of patch availability is the maximum time gap between patch availability and deployment, as it measures the longest duration that the organization takes to apply the patches, and ensures that it does not exceed the policy limit. The other options are not the best metrics, as they may not reflect the actual or optimal compliance with the policy, or may not be relevant or measurable for the policy, respectively. References = CRISC Review Manual, 7th Edition, page 110.

The status of identified risk scenarios, because it helps to monitor and track the current level and direction of the IT risks, and to determine whether the risk responses and controls are adequate and effective. An IT riskregister is a document that records and tracks the key IT risks that an organization faces, along with their likelihood, impact, and response strategies. An IT risk scenario is a hypothetical situation or event that describes the source, cause, consequence, and impact of an IT risk. The status of identified risk scenarios is the most important factor, as it reflects the actual and potential outcomes of the IT risks, and the performance and progress of the risk management process. The costs associated with mitigation options, the cost-benefit analysis of each risk response, and the timeframes for risk response actions are all possible factors to review when evaluating the ongoing effectiveness of the IT risk register, but they are not the most important factor, as they do not directly measure and report the status of the IT risk scenarios.

The issue of greatest concern when evaluating existing controls during a risk assessment is the presence of successive assessments with the same recurring vulnerabilities. This indicates that the controls are ineffective or inadequate in addressing the identified risks, and that the risk management process is not functioning properly. Recurring vulnerabilities expose the enterprise to potential losses, breaches, or incidents that could harm its objectives, reputation, or compliance. Therefore, it is essential to identify the root causes of the recurring vulnerabilities, implement corrective actions, and monitor the effectiveness ofthe controls on a regular basis. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 4, Section 4.2.2, page 183.

 A risk heat map is a visualization tool that shows the likelihood and impact of different risks on a matrix, using colors to indicate the level of risk. A risk heat map can help prioritize the risks that need the most attention and resources, and support the decision making and planning process for risk management. Mapping open risk issues to an enterprise risk heat map best facilitates risk response, which is the process of selecting and implementing the appropriate actions to address the risks. Risk response can include strategies such as mitigating, transferring, avoiding, or accepting risks. By mapping open risk issues to a risk heat map, an organization can identify the most suitable risk response for each risk, based on the risk appetite, criteria, and objectives. A risk heat map can also help evaluate the effectiveness and efficiency of the risk response, by showing the change in the level of residual risk after the risk response has been executed. References = What Is a Risk Heat Map & How Can It Help Your Risk Management Strategy, What Is a Risk Heat Map, and How Can It Help Your Risk Management Strategy, Risk Map (Risk Heat Map), How To Use A Risk Heat Map.

The best way to justify the risk mitigation actions recommended in a risk assessment would be to focus on the business drivers, which are the factors that influence the organization’s objectives, performance, and value creation12.

Focusing on the business drivers means aligning the risk mitigation actions with the organization’s strategic goals, priorities, and values, and demonstrating how the actions will support or enhance the organization’s capabilities, opportunities, and competitive advantage12.

Focusing on the business drivers also means communicating the benefits, costs, and trade-offs of the risk mitigation actions to the relevant stakeholders, and showing how the actions will address the organization’s risk appetite, tolerance, and exposure12.

The other options are not the best way to justify the risk mitigation actions, but rather possible sources of information or guidance that may support the justification. For example:

Aligning with audit results is a way to validate the effectiveness and efficiency of the risk mitigation actions, and to identify any gaps or weaknesses that need improvement34. However, audit results may not reflect the organization’s current or future business drivers, and may not capture the full scope or impact of the risk mitigation actions34.

Benchmarking with competitor’s actions is a way to compare the organization’s risk mitigation actions with the best practices or standards of the industry or market, and to identify any areas of improvement or differentiation56. However, competitor’s actions may not be suitable or applicable for the organization’s specific context, needs, or challenges, and may not align with the organization’s business drivers56.

Referencing best practice is a way to adopt the proven or accepted methods or techniques for risk mitigation, and to ensure the quality and consistency of the risk mitigation actions78. However, best practice may not be the most optimal or innovative solution for the organization’s unique situation, and may not address the organization’s business drivers78. References =

1: Risk IT Framework, ISACA, 2009

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

3: IT Audit and Assurance Standards, ISACA, 2014

4: IT Audit and Assurance Guidelines, ISACA, 2014

5: Benchmarking IT Risk Management Practices, ISACA Journal, Volume 4, 2017

6: Benchmarking: A Tool for Improving IT Risk Management, ISACA Now Blog, March 27, 2017

7: IT Risk Management Best Practices, ISACA Journal, Volume 1, 2018

8: IT Risk Management Best Practices, ISACA Now Blog, January 9, 2018

 The best way to mitigate the ongoing risk associated with operating system (OS) vulnerabilities is to document and implement a patching process. A patching process is a set of procedures and guidelines that define how to identify, evaluate, test, apply, and monitor patches for the OS. Patches are updates or fixes that address the known vulnerabilities or bugs in the OS. By documenting and implementing a patching process, the organization can ensure that the OS is regularly updated and protected from the potential exploits or attacks that may exploit the vulnerabilities. The other options are not as effective as documenting and implementing a patching process, as they are related to the temporary, partial, or reactive measures to deal with the OS vulnerabilities, not the proactive and continuous measures to prevent or reduce the OS vulnerabilities. References = Risk and Information Systems Control Study Manual, Chapter 3: IT Risk Response, Section 3.3: IT Risk Response Implementation, page 145.

The first factor that should be considered when assessing risk associated with the adoption of emerging technologies is the organizational strategy. The organizational strategy defines the vision, mission, goals, and objectives of the enterprise, and provides the direction and guidance for its activities and decisions. The adoption of emerging technologies should be aligned with the organizational strategy, and support its achievement and performance. The organizational strategy also helps to determine the risk appetite and tolerance of the enterprise, and the criteria for evaluating the risks and benefits of the emerging technologies. Cost-benefit analysis, control self-assessment, and business requirements are also important factors to consider when assessing risk associated with the adoption of emerging technologies, but they are not the first factor to consider. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 1, Section 1.2.1.1, page 181

1: ISACA Certified in Risk and Information Systems Control (CRISC®) Exam Guide, Answer to Question 656.

 The effectiveness of an employee deprovisioning process can be measured by the number of days taken to remove access after staff separation dates, as this indicates how quickly and completely the organisation can revoke the privileges of former employees and reduce the risk of unauthorized access or data leakage. The number of days taken for IT to remove access after receipt of HR instructions is a measure of the efficiency of the IT department, but not the overall process. The number of termination requests processed per reporting period is a measure of the volume of the process, but not the quality or timeliness. The number of days taken for HR to provide instructions to IT after staff separation dates is a measure of the performance of the HR department, but not the entire process. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk Response, page 152.

 Cost-benefit analysis is the most helpful tool to show risk reduction based on when developing risk treatment alternatives for a business case, because it compares the expected costs and benefits of each alternative and helps to select the most optimal and feasible one. Cost-benefit analysis also helps to justify the investment and resources required for the risk treatment plan and to demonstrate the value and return of the risk reduction. The other options are not the most helpful tools, although they may also be considered when developing risk treatment alternatives. Risk appetite, regulatory guidelines, and control efficiency are examples of factors or criteria that influence the selection of risk treatment alternatives, but they do not show the risk reduction based on the alternatives. References = CRISC: Certified in Risk & Information Systems Control Sample Questions

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

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

References

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

•How to Write Strong Risk Scenarios and Statements - ISACA

•What Everybody Ought To Know About Project Risk Owners

An updatedrisk registerensures that decision-makers have accurate, timely information about current risks, enabling informed, risk-based decisions that align with organizational priorities and changes in the environment.

The best course of action when a risk practitioner identifies a database application that has been developed and implemented by the business independently of IT is to include the application in IT risk assessments. IT risk assessments are the process of identifying, analyzing, and evaluating the IT-related risks that could affect the achievement of the enterprise’s objectives. By including the application in IT risk assessments, the risk practitioner can identify the potential threats, vulnerabilities, and impacts associated with the application, and recommend the appropriatecontrols and mitigation strategies to reduce the risk to an acceptable level. Escalating the concern to senior management, documenting the reasons for the exception, and proposing that the application be transferred to IT are not the best courses of action, as they do not address the risk exposure and impact of the application, and may not be feasible or desirable for the business. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 47.

 The greatest risk associated with the transition of a sensitive data backup solution from on-premise to a cloud service provider is inadequate data encryption. Data encryption is a keysecurity measure that protects the confidentiality and integrity of data, especially when it is stored or transmitted over a network. If the data encryption is inadequate, the data backup solution may be vulnerable to unauthorized access, modification, or disclosure by malicious actors or third parties. This could result in data breaches, regulatory fines, reputational damage, or legal liabilities for the enterprise. More complex test restores, inadequate service level agreement (SLA) with the provider, and more complex incident response procedures are also potential risks associated with the transition, but they are not as great as inadequate data encryption. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 5, Section 5.2.1.1, page 245.

According to the CRISC Review Manual, the greatest benefit of analyzing logs collected from different systems is to detect developing threats earlier, because it helps to identify and correlate the patterns, trends, and anomalies that may indicate a potential attack or compromise. Log analysis is the process of examining and interpreting the log data generated by various systems, such as firewalls, servers, routers, and applications. Log analysis can provide valuable insights into the activities and events that occur on the systems, and can enable the timely detection and response to the emerging threats. The other options are not the greatest benefits of analyzing logs, as they are less proactive or less strategic than detecting developing threats earlier. Maintaining a record of incidents is a benefit of logging, but not of analyzing logs, as it involves storing and preserving the log data for future reference. Facilitating forensic investigations is a benefit of analyzing logs, but it is a reactive and tactical activity that occurs after an incident has happened. Identifying security violations is a benefit of analyzing logs, but it is a specific and operational activity that focuses on the compliance and enforcement of the security policies and standards. References = CRISC Review Manual, 7th Edition, Chapter 5, Section 5.3.2, page 263.

The internal auditor is the best suited to provide objective input when updating residual risk to reflect the results of control effectiveness. The internal auditor is an independent and impartial function that evaluates the adequacy and effectiveness of the internal controls and reports on the findings and recommendations. The internal auditor can provide an unbiased and reliable assessment of the residual risk, which is the risk that remains after the controls are applied. The other options are not as objective as the internal auditor, as they may have vested interests orconflicts of interest in the control environment. References = Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Assessment, Section 2.4: IT Risk Response, page 87.

Performing scenario-based assessments is a proactive approach that allows organizations to anticipate potential future events and assess their impact. This method helps in identifying emerging risks by exploring hypothetical situations and their possible outcomes. It enables organizations to prepare for unforeseen events by understanding how different scenarios could affect their operations and objectives.​

Relationship between Risk Appetite and Risk Tolerance:

Risk Appetite: Defined as the amount of risk an organization is willing to accept in pursuit of its objectives. It is a broad measure that reflects the organization's strategy and goals.

Risk Tolerance: Refers to the acceptable level of variation in performance relative to achieving objectives. It is narrower and can sometimes exceed the risk appetite in specific situations where deviations are permissible.

Contextual Understanding:

Controlled Exceedance: Risk tolerance allows for occasional and controlled exceedance of the risk appetite, typically under specific conditions and for compelling business reasons.

Management Decisions: Decisions to exceed risk appetite should be carefully considered and documented, ensuring they do not threaten the overall risk capacity of the organization.

Comparison with Other Options:

Independent of Each Other: Incorrect, as risk tolerance is related to risk appetite.

Risk Tolerance Determines Risk Appetite: Incorrect, risk appetite is generally broader and set before determining risk tolerance.

Synonymous: Incorrect, they are distinct concepts with risk tolerance providing operational flexibility within the boundaries set by risk appetite.

Best Practices:

Clear Definitions: Clearly define and communicate the organization’s risk appetite and risk tolerance.

Regular Reviews: Regularly review and adjust risk appetite and tolerance to align with changes in business strategy and external environment.

A key risk indicator (KRI) is a metric used to measure and monitor the level of risk associated with a particular process, activity, or system within an organization1. KRIs are typically used in risk management to provide early warning signs of potential risks and to help organizations take proactive steps to mitigate those risks. KRIs are designed to be quantitative and measurable, allowing organizations to track changes in risk levels over time and to identify trends and patterns that may indicate an increased likelihood of risk. A negative security return on investment (ROI) would be most beneficial as a KRI, as it would indicate that the organization is spending more on security than the value it is generating or protecting. A negative security ROI would suggest that the organization is either over-investing in security, under-utilizing its security assets, or facing significant security threats or incidents that erode its security value. A negative security ROI would alert the organization to review its security strategy, budget, and performance, and to adjust them accordingly to optimize its security ROI and reduce its risk exposure2. Current capital allocation reserves are not the most beneficial as a KRI, as they do notdirectly measure the level of risk associated with a particular process, activity, or system. Capital allocation reserves are the amount of capital that an organization sets aside to cover potential losses or liabilities arising from its activities. Capital allocation reserves may reflect the organization’s overall risk appetite and tolerance, but they do not provide specific information on the sources, types, or impacts of risks that the organization faces3. Project cost variances are not the most beneficial as a KRI, as they do not directly measure the level of risk associated with a particular process, activity, or system. Project cost variances are the differences between the actual and planned costs of a project. Project cost variances may indicate the performance or efficiency of a project, but they do not provide specific information on the risks that may affect the project’s objectives, scope, quality, or schedule4. Annualized loss projections are not the most beneficial as a KRI, as they do not directly measure the level of risk associated with a particular process, activity, or system. Annualized loss projections are the estimates of the potential losses that an organization may incur in a year due to various risk events. Annualized loss projections may help the organization to plan and budget for its risk management activities, but they do not provide specific information on the likelihood, frequency, or severity of riskevents that may occur5. References = 1: Key risk indicator - Wikipedia2: What Is A Key Risk Indicator?3: Capital Allocation - Overview, Importance, and Methods4: Project Cost Variance: Definition, Formula, and Examples5: [Annualized Loss Expectancy (ALE) - Definition, Formula, and Example]

•A risk owner is the person or entity that has the authority and responsibility to manage a specific risk1. The risk owner is accountable for the implementation and effectiveness of the risk response strategy and the risk treatment plan2.

•Identifying the risk owner is the first step when a new risk scenario has been identified, because the risk owner is the key stakeholder who will be involved in the subsequent steps of the risk management process, such as risk analysis, risk evaluation, risk treatment, and risk monitoring2.

•Identifying the risk owner also helps to clarify the roles and responsibilities of different parties involved in the risk management process, such as the risk manager, the risk analyst, the risk committee, and the risk auditor3. This can improve the communication, coordination, and collaboration among the risk management team and ensure that the risk is managed effectively and efficiently.

•Estimating the residual risk (option A) is not the first step when a new risk scenario has been identified, because the residual risk is the risk that remains after the risk treatment plan has been implemented2. Therefore, estimating the residual risk requires prior steps such as risk analysis, risk evaluation, and risk treatment.

•Establishing key risk indicators (KRIs) (option B) is not the first step when a new risk scenario has been identified, because KRIs are metrics or data points that provide early warning signals or information about the level or trend of a risk4. Therefore, establishing KRIs requires prior steps such as risk identification, risk analysis, and risk evaluation.

•Designing control improvements (option C) is not the first step when a new risk scenario has been identified, because control improvements are part of the risk treatment plan, which is the set of actions and resources needed to implement the chosen risk response strategy2. Therefore,designing control improvements requires prior steps such as risk analysis, risk evaluation, and risk response selection.

References =

•Risk Owner - Institute of Internal Auditors

•Risk Treatment Plan - ISACA

•Risk Management Roles and Responsibilities - 360factors

•Key Risk Indicators: A Practical Guide | SafetyCulture

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

The most important factor to the effective monitoring of KRIs is determining threshold levels. This means that the acceptable or unacceptable values or ranges of the KRIs are defined and agreed upon by the relevant stakeholders.

Determining threshold levels helps to evaluate the actual performance and impact of the risks, compare them with the risk appetite and tolerance of the organization, identify any deviations or breaches that may require attention or action, and report them to the appropriate parties for decision making or improvement actions.

The other options are not the most important factors to the effective monitoring of KRIs. They are either secondary or not essential for KRIs.

The references for this answer are:

Risk IT Framework, page 15

Information Technology & Security, page 9

Risk Scenarios Starter Pack, page 7

 Risk is inefficiently controlled when the annual cost of the control exceeds the annual loss expectancy (ALE) of the risk, as this means that the organization is spending more on the control than the potential loss that the control is supposed to prevent or reduce. This indicates that the control is not cost-effective or optimal, and that the organization should consider alternative or complementary controls that can lower the cost or increase the benefit of the risk management. Control is ineffective and should be strengthened when the control does not reduce the likelihood or impact of the risk to an acceptable level, regardless of the cost. Risk is efficiently controlled when the annual cost of the control is equal to or less than the annual loss expectancy (ALE) of the risk, as this means that the organization is spending less or equal on the control than the potential loss that the control is supposed to prevent or reduce. Control is weak and should be removed when the control does not provide any benefit or value to the risk management,regardless of the cost. References = CRISC Certified in Risk and Information Systems Control – Question205; ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 205.

The greatest concern for an IT risk practitioner when an employee transfers to another department is that unnecessary access permissions have not been removed. Unnecessary access permissions are the access rights or privileges that are no longer needed, relevant, or appropriate for the employee’s new role or responsibility. If these access permissions are not removed, they may pose a significant security risk, as the employee may be able to access, modify, or delete sensitive or critical data and systems that are not related to their current function. This may result in data leakage, fraud, sabotage, or compliance violations. The other options are not as concerning as unnecessary access permissions, as they are related to the organizational, operational, or knowledge aspects of the employee transfer, not the security or risk aspects of the employee transfer. References = Risk and Information Systems Control Study Manual, Chapter 3: IT Risk Response, Section 3.3: IT Risk Response Implementation, page 145.

The application risk profile should be updated when reviewing functional requirements. This will help to identify and assess the potential risks that may arise from the changes to the application, and to plan and implement appropriate risk responses. Updating the application risk profile at this stage will also help to ensure that the changes are aligned with the organization’s objectives, policies, and standards, and that they meet the stakeholders’ expectations and needs. Updating the application risk profile after user acceptance testing, upon release to production, or during backlog scheduling are not the best points to update the risk profile, as they may be too late or too early to capture the relevant risks and their impacts. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 2, Section 2.1.1.1, page 511

1: ISACA Certified in Risk and Information Systems Control (CRISC®) Exam Guide, Answer to Question 655.

 The performance of a client-facing application is the measure of how well the application meets the expectations and requirements of the clients who use it. The performance of a client-facing application can be affected by various factors, such as functionality, usability, reliability, availability, security, and scalability. Continuously monitoring the performance of a client-facing application is the process of collecting, analyzing, and reporting on the performance data and metrics of the application over time. Continuously monitoring the performance of a client-facing application can help identify and resolve issues, improve quality, optimize resources, and enhance client satisfaction. The most important thing to ensure when continuously monitoring the performance of a client-facing application is that the objectives are confirmed with the business owner. The business owner is the person or entity who has the authority and responsibility for the business value and outcomes of the application. The business owner defines the objectives, goals, and requirements of the application, and sets the performance criteria and targets. Confirming the objectives with the business owner can help ensure that the performance monitoring is aligned with the business needs and expectations, and that the performance data and metrics are relevant, accurate, and meaningful. References = Risk and Information SystemsControl Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.3: Continuous Monitoring, p. 203-205.

Assessing the risk of using production data for testing before making a decision is the best recommendation for the risk practitioner, because it helps to balance the benefits and drawbacks of using real data for the proof of concept (POC) of a security tool. A POC is a demonstration or trial of a proposed solution or product to verify its feasibility, functionality, and value. A security tool is a software or hardware device that helps to protect the IT systems or networks from threats or attacks. Using production data for testing purposes can yield the best results, as it reflects the actual data that the security tool will handle in the operational environment. However, using production data for testing also poses risks, such as data leakage, data corruption, data privacy violation, or regulatory non-compliance. Therefore, assessing the risk ofusing production data for testing before making a decision is the best recommendation, as it helps to identify and evaluate the potential risks and issues, and to determine the appropriate controls or mitigating factors to reduce or eliminate them. Accepting the risk of using the production data, benchmarking against what peer organizations are doing, and denying the request are all possible recommendations, but they are not the best recommendation, as they do not consider the risk assessment process and the trade-offs involved in using production data for testing. References = Risk and Information Systems Control Study Manual, Chapter 5, Section 5.4.1, page 208

A contingency plan is a set of actions and procedures that aim to ensure the continuity of critical business functions in the event of a disruption or disaster. An alternate processing site is a location where the organization can resume its information systems operations in case the primary site is unavailable or damaged. The most important consideration when establishing a contingency plan and an alternate processing site for a company located on a moderate earthquake fault is to ensure that the alternative site does not reside on the same fault, no matter how far apart they are. This is because an earthquake can affect a large area along the fault line, and potentially damage both the primary and the alternative site, rendering them unusable. By choosing an alternative site that is not on the same fault, the company can reduce the risk of losing both sites, and increase the likelihood of restoring its operations quickly and effectively. The other options are not as important as the alternative site location, because they do not address the main threat of an earthquake, but rather focus on specific or partial aspects of the contingency plan, as explained below:

A. The alternative site is a hot site with equipment ready to resume processing immediately is a consideration that relates to the availability and readiness of the alternative site, but it does not ensure that the site is safe and secure from an earthquake. A hot site is a type of alternative site that has the necessary hardware, software, and network components to resume the information systems operations with minimal or no downtime. However, if the hot site is on the same fault asthe primary site, it may not be accessible or functional after an earthquake, and the company may lose both sites and the data stored on them.

B. The contingency plan provides for backup media to be taken to the alternative site is a consideration that relates to the integrity and recoverability of the data, but it does not ensure that the site is safe and secure from an earthquake. Backup media are devices or systems that store copies of the data and information that are essential for the organization’s operations. Taking backup media to the alternative site can help the company to restore its data and resume its operations in case the primary site is damaged or destroyed. However, if the alternative site is on the same fault as the primary site, it may not be accessible or functional after an earthquake, and the company may lose both sites and the backup media.

C. The contingency plan for high priority applications does not involve a shared cold site is a consideration that relates to the performance and reliability of the alternative site, but it does not ensure that the site is safe and secure from an earthquake. A shared cold site is a type of alternative site that has the necessary space and infrastructure to accommodate the information systems operations, but does not have the hardware, software, or network components installed. A shared cold site is shared by multiple organizations, and may not be available or suitable for the company’s high priority applications, which require more resources and customization. However, if the alternative site is on the same fault as the primary site, it may not be accessible or functional after an earthquake, and the company may lose both sites and the ability to resume its high priority applications. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.2.1, page 115. How to conduct a contingency planning process - IFRC, CP-4(2): Alternate Processing Site - CSF Tools - Identity Digital, Information System Contingency Planning Guidance - ISACA

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

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

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

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

The references for this answer are:

Risk IT Framework, page 29

Information Technology & Security, page 23

Risk Scenarios Starter Pack, page 21

Artificial intelligence (AI) is a branch of computer science that aims to create machines or systems that can perform tasks that normally require human intelligence, such as learning, reasoning, decision making, etc.

An organization that is considering adopting AI should be aware of the potential risks and challenges that may arise from using AI, such as ethical, legal, social, technical, operational, or security issues.

The most important course of action for the risk practitioner is to identify applicable risk scenarios. This means that the risk practitioner should analyze the context and objectives of theAI adoption, the stakeholders and their expectations, the data and information sources and quality, the AI models and algorithms and their reliability, the AI outputs and outcomes and their impact, and the AI governance and oversight mechanisms and their effectiveness.

Identifying applicable risk scenarios helps to assess the likelihood and impact of the risks, prioritize the risks, design and implement appropriate risk responses, monitor and evaluate the risk performance, and report and communicate the risk status and issues.

The other options are not the most important courses of action for the risk practitioner. They are either secondary or not essential for AI risk management.

The references for this answer are:

Risk IT Framework, page 24

Information Technology & Security, page 18

Risk Scenarios Starter Pack, page 16

The risk practitioner’s best course of action after identifying risk scenarios related to noncompliance with new industry regulations is to escalate to senior management, as they have the authority and responsibility to decide on the appropriate risk response and allocate the necessary resources. Transferring the risk, implementing monitoring controls, and recalculating the risk are possible risk responses, but they require senior management approval and direction. References = Risk Scenarios Toolkit, page 19; CRISC Review Manual, 7th Edition, page 107.

An effective risk management program is a systematic and consistent process of identifying, analyzing, evaluating, treating, monitoring, and communicating risks that may affect the achievement of the organization’s objectives12.

The best indication of an effective risk management program is that the residual risk, which is the risk remaining after risk treatment, is within the organizational risk appetite, which is the amount and type of risk that the organization is willing to accept in pursuit of its objectives12.

This indicates that the organization has successfully implemented appropriate risk responses that align with its risk strategy and criteria, and that the organization is able to balance the potential benefits and costs of taking risks12.

The other options are not the best indication, but rather components or outcomes of an effective risk management program. For example:

Risk action plans are approved by senior management is an outcome of an effective risk management program that demonstrates the commitment and accountability of the leadership for risk management12.

Mitigating controls are designed and implemented is a component of an effective risk management program that involves reducing the likelihood or impact of a risk event12.

Risk is recorded and tracked in the risk register is a component of an effective risk management program that involves documenting and updating the risk information and status12. References =

1: Risk IT Framework, ISACA, 2009

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

The risk associated with an asset before controls are applied is also known as the inherent risk. It is the level of risk that exists in the absence of any mitigating actions or measures. To express the inherent risk, one needs to consider two factors: the likelihood and the impact of a potential threat. The likelihood is the probability or frequency of a threat occurring, while the impact is the magnitude or severity of the consequences if the threat materializes. The inherent risk can be calculated by multiplying the likelihood and the impact, or by using a risk matrix that assigns a risk rating based on the combination of these two factors. The other options are not correct ways of expressing the inherent risk, as they do not account for both the likelihood and the impact of a threat. The magnitude of an impact is only one component of the risk, and it does not reflect how likely the threat is to happen. The function of the cost and effectiveness of control is related to the residual risk, which is the risk that remains after controls are applied. The likelihood of a given threat is also only one component of the risk, and it does not indicate how severe the impact would be if the threat occurs. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 2, Section 2.1.1, Page 47.

Outsourcing IT security operations is a common practice that can provide benefits such as cost savings, access to specialized skills, and improved service quality12. However, outsourcing also introduces risks such as loss of control, dependency, contractual issues, and service failures12.

When an organization outsources its IT security operations to a third party, it does not transfer the accountability for the risk associated with the outsourced operations. Accountability is the obligation to answer for the execution of one’s assigned responsibilities34.

The organization’s management is ultimately accountable for the risk associated with the outsourced operations, as they are responsible for defining the organization’s risk appetite, strategy, and objectives, and for ensuring that the organization’s IT security operations are aligned with them34.

The organization’s management is also accountable for selecting, contracting, and overseeing the third party, and for ensuring that the third party meets the agreed service levels, standards, and compliance requirements34.

The organization’s management is also accountable for monitoring and reporting the risk associated with the outsourced operations, and for taking corrective actions when necessary34.

The other options are not ultimately accountable, but rather have different roles and responsibilities in relation to the outsourced operations. For example:

The third party’s management is responsible for delivering the IT security services according to the contract, and for managing the risk within their own organization34. They are accountable to the organization’s management, but not to the organization’s stakeholders.

The control operators at the third party are responsible for implementing and operating the IT security controls according to the service specifications, and for reporting any issues orincidents to the organization’s management34. They are accountable to the third party’s management, but not to the organization’s management or stakeholders.

The organization’s vendor management office is responsible for facilitating the relationship between the organization and the third party, and for supporting the organization’s management in the outsourcing process34. They are accountable to the organization’s management, but not for the risk associated with the outsourced operations. References =

1: Outsourcing IT Security: A Risk Management Perspective, ISACA Journal, Volume 2, 2019

2: The Cyber Security Risks Of Outsourcing, Cybersecurity Intelligence, January 4, 2022

3: Accountability for Information Security Roles and Responsibilities, Part 1, ISACA Journal, Volume 5, 2019

4: Risk IT Framework, ISACA, 2009

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