CRISC Exam Dumps - Isaca Certification Questions and Answers

A project sponsor is the person or group who provides the financial, political, or organizational support for a project, and who has the authority to approve or reject the project’s objectives, scope, budget, schedule, and deliverables.

The primary recipient of reports showing the progress of a current IT risk mitigation project should be the project sponsor, because they are ultimately responsible for the success or failure of the project, and they need to be informed of the project’s status, issues, risks, and achievements on a regular basis.

The other options are not the primary recipients of reports showing the progress of a current IT risk mitigation project. They are either secondary or not essential for project reporting.

The references for this answer are:

Risk IT Framework, page 21

Information Technology & Security, page 15

Risk Scenarios Starter Pack, page 13

Centralizing IT systems is a process of consolidating and integrating the IT systems or resources in the organization into a single or unified platform or location. Centralizing IT systems helps to improve risk reporting, because it helps to simplify and standardize the risk management process and activities, and to enhance the visibility and transparency of the IT risks and controls. Centralizing IT systems also helps to improve risk reporting, because it helps to facilitate and automate the risk data collection, analysis, and evaluation, and to provide consistent and comprehensive risk information and insights to the organization’s stakeholders, such as the board, management, business units, and IT functions. The other options are not the greatest benefit of centralizing IT systems, although they may be related to the risk management process. Risk classification, risk monitoring, and risk identification are all activities that can help to support or improve the risk management process, but they do not necessarily benefit from centralizing IT systems

Showing projected residual risk is the most helpful way to respond to the request of explaining how existing risk treatment plans would affect risk posture at the end of the year. Residual risk is the level of risk that remains after the implementation of risk responses1. Projected residual risk is the estimated level of risk that will remain at a future point in time, based on the assumptions and expectations of the risk responses2. By showing projected residual risk, the risk practitioner can:

Demonstrate the effectiveness and efficiency of the risk treatment plans, and how they reduce the risk level from the inherent risk (the risk before the risk responses) to the residual risk3.

Compare the projected residual risk with the risk appetite and tolerance, which are the amount and type of risk that the organization is willing to accept or pursue in order to achieve its objectives4. This can help to determine whether the projected residual risk is acceptable or not, and whether the risk treatment plans are consistent and proportional to the risk level5.

Identify and address any gaps, issues, or challenges that may affect the achievement of the projected residual risk, and recommend and implement appropriate improvement actions or contingency plans6.

The other options are not the most helpful ways to respond to the request, because:

Assessing risk with no controls in place is not the most helpful way, as it does not reflect the current or future risk posture of the organization. Controls are the measures or actions that are implemented to modify the risk, such as prevent, detect, correct, or mitigate the risk7. Assessing risk with no controls in place can help to measure the inherent risk, but it does not show the impact or outcome of the risk treatment plans.

Providing peer benchmarking results is not the most helpful way, as it does not reflect the specific or unique risk profile of the organization. Peer benchmarking is the process ofcomparing the organization’s risk level and performance with its peers or competitors, based on a common set of criteria or indicators8. Providing peer benchmarking results can help to provide a reference or a standard for the risk posture, but it does not show the effect or result of the risk treatment plans.

Assessing risk with current controls in place is not the most helpful way, as it does not reflect the future or projected risk posture of the organization. Assessing risk with current controls in place can help to measure the current residual risk, but it does not show the expected or estimated residual risk at the end of the year.

References =

Residual Risk - CIO Wiki

Projected Residual Risk - CIO Wiki

Risk Treatment Plan - CIO Wiki

Risk Appetite and Tolerance - CIO Wiki

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

Risk Monitoring and Review - The National Academies Press

Control - CIO Wiki

Benchmarking - CIO Wiki

[Risk Treatment - CIO Wiki]

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

Peak bandwidth usage is the most helpful in defining an early-warning threshold associated with insufficient network bandwidth. Peak bandwidth usage is the maximum amount of data that istransferred over a network connection at a given time. It indicates the highest demand and stress on the network resources and capacity. By monitoring the peak bandwidth usage, the organization can identify the potential bottlenecks, slowdowns, and disruptions that may occur due to insufficient network bandwidth. The organization can also plan and allocate the network bandwidth accordingly to meet the peak demand and avoid service degradation. The other options are not as helpful as peak bandwidth usage, as they do not reflect the actual or potential network performance issues that may arise due to insufficient network bandwidth. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.3: Key Risk Indicators, page 197.

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

Project Delta should be deferred by management, as it has the lowest return on investment (ROI) among the four competing projects. ROI is a measure of the profitability or efficiency of a project, calculated by dividing the net benefits by the total costs. Project Delta has a net benefit of $100,000 and a total cost of $200,000, resulting in an ROI of 0.5. The other projects have higher ROIs: Project Alpha has an ROI of 1.0, Project Bravo has an ROI of 0.8, and Project Charlie has an ROI of 0.6. Therefore, Project Delta is the least attractive option for reducingoverall IT risk, and management should prioritize the other projects instead. References = How to Manage Project Risk: A 5-Step Guide; Matching the right projects with the right resources; Risk Types in Project Management

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

Risk management maturity level is the degree to which an organization has developed and implemented a systematic and proactive approach to managing the risks that it faces across its various functions, processes, and activities. Risk management maturity level reflects the organization’s risk culture and capability, and its alignment with its objectives and strategies1.

The best measurement of an organization’s risk management maturity level is the key risk indicators (KRIs), which are metrics or measures that provide information on the current or potential exposure and performance of the organization in relation to specific risks. KRIs can help to:

Monitor and track the changes or trends in the risk level and the risk response over time

Identify and alert the risk issues or events that require attention or action

Evaluate and report the effectiveness and efficiency of the risk management processes and practices

Support and inform the risk decision making and improvement23

KRIs can be classified into different types, such as:

Leading KRIs, which are forward-looking and predictive, and indicate the likelihood or probability of a risk event occurring in the future

Lagging KRIs, which are backward-looking and descriptive, and indicate the impact or consequence of a risk event that has already occurred

Quantitative KRIs, which are numerical or measurable, and indicate the magnitude or severity of a risk event or outcome

Qualitative KRIs, which are descriptive or subjective, and indicate the nature or characteristics of a risk event or outcome4

The other options are not the best measurements of an organization’s risk management maturity level, but rather some of the factors or outcomes of it. Level of residual risk is the level of risk that remains after the risk response has been implemented. Level of residual risk reflects the effectiveness and efficiency of the risk response, and the need for further action or monitoring. The results of a gap analysis are the differences between the current and the desired state of the risk management processes and practices. The results of a gap analysis reflect the completeness and coverage of the risk management activities, and the areas for improvement or enhancement. IT alignment to business objectives is the extent to which IT supports and enables the achievement of the organization’s goals and strategies. IT alignment to business objectives reflects the integration and coordination of the IT and business functions, and the optimization of the IT value and performance. References =

Risk Maturity Assessment Explained | Risk Maturity Model

Key Risk Indicators - ISACA

Key Risk Indicators: What They Are and How to Use Them

Key Risk Indicators: Types and Examples

[CRISC Review Manual, 7th Edition]

The most appropriate action for the risk manager to take after undertaking a risk assessment of a production system is to inform the process owner of the concerns and propose measures to reduce them, as the process owner has the authority and responsibility to manage the production system and its associated risks and controls, and to decide on the optimal risk response. Recommending a program that minimizes the concerns of that production system, informing the IT manager of the concerns and proposing measures to reduce them, and informing the development team of the concerns and together formulating risk reduction measures are not the most appropriate actions, as they may not involve the process owner, who is the key stakeholder and decision maker for the production system and its risks. References = CRISC Review Manual, 7th Edition, page 101.

Software as a service (SaaS) is a cloud computing model that provides software applications over the internet, without requiring the customer to install or maintain them on their own devices1. SaaS applicationscan offer many benefits, such as scalability, accessibility, and cost-efficiency, but they also pose security risks, such as data breaches, unauthorized access, and compliance violations2.

One of the best ways to protect an organization against breaches when using a SaaS application is to use data loss prevention (DLP) tools. DLP tools are software solutions that monitor, detect,and prevent the unauthorized transmission or leakage of sensitive data from an organization’s network or devices3. DLP tools can help an organization to:

Identify and classify sensitive data, such as personal information, intellectual property, or financial records, and apply appropriate policies and controls to protect them

Encrypt data in transit and at rest, and use secure protocols and encryption keys to ensure data confidentiality and integrity

Block or alert on suspicious or malicious data transfers, such as unauthorized uploads, downloads, or sharing of data to external sources or devices

Audit and report on data activities and incidents, and provide evidence for compliance with data protection regulations and standards, such as GDPR, HIPAA, or PCI-DSS4

References = What is SaaS?, Top 7 SaaS Security Risks (and How to Fix Them), What is Data Loss Prevention (DLP)?, Data Loss Prevention (DLP) for SaaS Applications

IT assets are the resources that support the organization’s business processes and objectives, such as hardware, software, data, and information. IT assets are the primary targets of IT risk, as they may be exposed to threats, vulnerabilities, and control deficiencies that could compromise their confidentiality, integrity, availability, or value. Therefore, identifying and classifying IT assets is the first step in developing relevant IT risk scenarios, as it helps to determine the scope, boundaries, and dependencies of the IT risk environment.

The other options are not the first things to review for identifying IT risk scenarios. Technology threats (A) are the potential sources of harm or damage to IT assets, such as natural disasters, cyberattacks, human errors, or sabotage. Technology threats are important to consider, but they are not the starting point for IT risk scenarios, as they depend on the context and characteristics of the IT assets. Security vulnerabilities © are the weaknesses or flaws in IT assets or controls that could be exploited by threats, such as outdated software, misconfigured systems, or insufficient encryption. Security vulnerabilities are also important to identify, but they are not the first thing to review, as they are specific to the IT assets and their configurations. IT risk register (D) is a document that records and tracks the identified IT risks, their analysis, evaluation, and response. IT risk register is a result of the IT risk assessment process, not an input to it.

 The best time to identify the risk associated with a major project to determine a mitigation plan is the project initiation phase. The project initiation phase is the first phase of the project management process, where the project is defined, authorized, and planned. The project initiation phase includes the activities of developing the project charter, identifying the stakeholders, and defining the scope and objectives of the project. The project initiation phase is the best time to identify the risk associated with the project, as it provides the opportunity to understand the project context, requirements, and expectations, and to establish the risk management framework, process, and plan. By identifying the risk early in the project, the mitigation plan can be integrated with the project plan, and the resources, budget, and schedule can be allocated accordingly. The other options are not as optimal as the project initiation phase, as they are related to the execution, closing, or planning of the project, not the definition or authorization of the project. References = Risk and Information Systems Control Study Manual, Chapter 1: IT Risk Identification, Section 1.1: IT Risk Management Process, page 15.

Biased recommendations from AI models can perpetuate or exacerbate organizational risks, especially in decision-making processes, regulatory compliance, and ethical standards. Addressing such concerns is vital under theEmerging Technology Risksdomain in risk management.

A risk practitioner is a person who is responsible for performing risk management activities, such as identifying, analyzing, evaluating, treating, monitoring, and communicating risks. When an organization is implementing a project to automate the purchasing process, including the modification of approval controls, the task that is the responsibility of the risk practitioner is to verify that the existing controls continue to properly mitigate the defined risk. This means thatthe risk practitioner should ensure that the automation and modification of the approval controls do not introduce new risks or change the existing risk profile, and that the controls are still effective and adequate for the purchasing process. The risk practitioner should also monitor the performance and compliance of the controls, and recommend any improvements or adjustments as needed. References = CRISC Review Manual, 7th Edition, page 177.

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

The first step in establishing an ethical governance culture is to create a clear and formal policy outlining acceptable behavior and consequences for violations.

ISACA guidance:

“Developing and approving an enterprise code of ethics or ethical policy establishes the foundation for enforcing ethical conduct and guiding all subsequent training and enforcement activities.”

Training and enforcement follow policy creation.

Therefore, D. Create a policy regarding ethical behavior is correct.

CRISC Reference: Domain 1 – IT Risk Governance, Topic: Ethics and Governance Policies.

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

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

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

Balanced Scorecard Basics - Balanced Scorecard Institute

Using the Balanced Scorecard to Measure and Manage IT Risk

Capability Maturity Model Integration (CMMI) Overview

Internal Audit Planning: The Basics - The IIA

[Control Self-Assessment - ISACA]

When regulatory conflicts arise, the best practice is to conduct a comprehensive risk assessment to understand the impact and develop appropriate mitigation strategies. Immediate termination may be premature without understanding options, and accepting risk without assessment may expose the organization to legal or compliance issues. Prioritizing compliance requires understanding the full scope of risks and controls necessary【5:35, 5:48†CRISC_SentenceinNOTE30.pptx】.

The best approach to mitigate the risk associated with a control deficiency is to implement compensating controls. A control deficiency is a situation where a control is missing, ineffective, or inefficient, and cannot provide reasonable assurance that the objectives or requirements are met. A compensating control is a control that provides an alternative or additional measure of protection when the primary or preferred control is not feasible or effective. A compensating control can help to reduce the likelihood and/or impact of the risk associated with the control deficiency, and maintain the compliance or performance level. The other options are not as effective as implementing compensating controls, as they are related to the analysis, assessment, or provision of the risk, not the mitigation of the risk. References = Risk and Information Systems Control Study Manual, Chapter 3: IT Risk Response, Section 3.3: IT Risk Response Implementation, page 145.

The business application owner is accountable for business impact and must approve any change that affects application availability. ISACA’s CRISC emphasis on ownership roles indicates business owners should approve changes with risk implications.

The result of a control working as desired, but having an annual cost of maintenance that exceeds the expected annual loss exposure, is that the control is inefficient, as it implies that the control is not cost-effective or optimal, and may require a review or adjustment. The other options are not the correct results, as they do not reflect the performance or adequacy of the control, but rather the maturity, effectiveness, or optimization of the control, respectively. References = CRISC Review Manual, 7th Edition, page 154.

Residual risk exceeds acceptable limits, because it indicates that the risk level is higher than the organization’s risk appetite or tolerance, and that the risk responses and controls are insufficient or ineffective. Residual risk is the level of risk remaining in a process or procedure following the implementation of risk controls to limit or remove it. Escalation is a process that increases theawareness and involvement of higher-level stakeholders or authorities in a risk issue or situation. Escalation is appropriate when the risk issue or situation is outside the scope or authority of the current risk owner or manager, and requires the attention or action of the senior management or the board of directors. Residual risk exceeding acceptable limits is the best situation to justify escalation, as it implies that the current risk owner or manager cannot manage the risk within the predefined boundaries or expectations, and that the senior management or the board of directors need to intervene or approve the risk acceptance or transfer.

Residual risk being inadequately recorded, residual risk remaining after controls have been applied, and residual risk equaling current risk are all possible situations that may require escalation, but they are not the best situations, as they do not necessarily indicate that the risk level is higher than the acceptable limits, and that the senior management or the board of directors need to be involved.

A multinational organization that operates in different countries should be aware of the legal and regulatory requirements of each jurisdiction. Some countries may have strict privacy laws that prohibit or limit the collection and use of personal information of employees, such as their criminal records, credit history, or medical conditions. Therefore, implementing standard background checks for all new employees may violate the laws in some countries and expose the organization to legal risks and reputational damage. References = Risk and Information Systems Control Study Manual, Chapter 1: IT Risk Identification, Section 1.4: IT Risk Factors, page 31.

A risk scenario is a hypothetical situation that describes how a risk event could adversely affect an organization’s objectives, assets, or operations. A risk scenario can be used for riskanalysis,which is the process of estimating the likelihood and impact of the risk event, and evaluating the effectiveness and efficiency of the risk response1.

One of the essential components of a risk scenario is the threat type, which is the source or cause of the risk event. The threat type can be classified into various categories, such as natural, human, technical, environmental, or legal. The threat type can help to define the characteristics, motivations, capabilities, and methods of the risk event, and to identify the potential vulnerabilities and exposures of the organization. The threat type can also help to determine the frequency and severity of the risk event, and to select the appropriate risk response strategies and controls23.

The other options are not the components of a risk scenario, but rather the outcomes or inputs of risk analysis. Risk appetite is the amount and type of risk that an organization is willing to accept in pursuit of its objectives. Risk appetite can help to guide the risk analysis by providing a high-level statement of the desired level of risk taking and tolerance4. Risk tolerance is the acceptable variation in the outcomes related to specific objectives or risks. Risk tolerance can help to measure the risk analysis by providing quantitative or qualitative indicators of the acceptable range of risk exposure and performance4. Residual risk is the remaining risk after the risk response has been implemented. Residual risk can help to monitor the risk analysis by providing feedback on the effectiveness and efficiency of the risk response and the need for further action. References =

Risk Analysis - ISACA

Threat - ISACA

Threat Modeling - ISACA

Risk Appetite and Risk Tolerance - ISACA

[Residual Risk - ISACA]

[CRISC Review Manual, 7th Edition]

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

The next step for the risk practitioner after identifying risk owners and responses for newly identified risk scenarios is to update the risk register with the results. The risk register is a document that records the details of the risks, such as their sources, causes, consequences, likelihood, impact, and responses. By updating the risk register with the results of the risk workshop, the risk practitioner can ensure that the risk information is current, accurate, and complete, and that the risk owners and responses are clearly defined and communicated. Developing a mechanism for monitoring residual risk, preparing a business case for the response options, and identifying resources for implementing responses are possible steps that may follow the updating of the risk register, but they are not the next step. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 11; CRISC Review Manual, 6th Edition, page 144.

•Risk acceptance is a status quo risk response, where the risk owner acknowledges the risk exists but accepts it with minimal response1. Risk acceptance may be appropriate when the cost of other risk responses exceeds the value that would be gained, or when the risk is below the risk acceptance criteria2.

•Risk acceptance criteria are the criteria used as a basis for decisions about acceptable risk2. They should be established before conducting a risk assessment, and they may be influenced by factors such as utility, equality, technology, and risk perception2. Different organizations and countries may have different risk acceptance criteria, depending on their context and values3.

•In this scenario, the organization has conducted a risk assessment for regulatory compliance, and has identified only one possible mitigating control. However, the cost of the control is higher than the penalty of noncompliance, which implies that the risk is below the risk acceptancecriteria. Therefore, the best recommendation is to accept the risk with management sign-off, which means that the management agrees to take the risk and is accountable for the consequences.

•Ignoring the risk until the regulatory body conducts a compliance check (option B) is not a good recommendation, as it may expose the organization to legal, financial, or reputational damage. Moreover, ignoring the risk may violate the principle of risk reduction, which states that risks should be reduced wherever practicable2.

•Mitigating the risk with the identified control (option C) is not a good recommendation, as it may not be cost-effective or efficient for the organization. The cost of the control is higher than the penalty ofnoncompliance, which means that the organization would spend more resources than necessary to reduce the risk. Moreover, mitigating the risk may not be aligned with the principle of utility, which states that resources should be used as efficiently as possible for the society as a whole2.

•Transferring the risk by buying insurance (option D) is not a good recommendation, as it may not be feasible or beneficial for the organization. Transferring the risk means that the organization shifts the responsibility or burden of the risk to another party, such as an insurer, a contractor, or a partner1. However, transferring the risk does not eliminate the risk, and it may incur additional costs or complications for the organization. Moreover, transferring the risk may not be possible or acceptable for some types of regulatory compliance risks, such as those related to health, safety, or environmental standards3.

The most effective way for a large and diversified organization to minimize risk associated with unauthorized software on company devices is to scan end points for applications not included in the asset inventory. An asset inventory is a document that records and tracks all the hardware and software assets that are owned, used, or managed by the organization, such as laptops, tablets, smartphones, servers, applications, etc. An asset inventory helps to identify and classify the assets based on their type, model, location, owner, status, etc. An asset inventory also helps to monitor and control the assets, such as enforcing security policies, applying patches and updates, detecting and resolving issues, etc. Scanningend points for applications not included in the asset inventory helps to minimize the risk of unauthorized software, because it helps to discover and remove any software that is not approved, authorized, or licensed by the organization, and that may pose security, legal, or operational risks, such as malware, spyware, pirated software, etc. The other options are not as effective as scanning end points for applications not included in the asset inventory, although they may provide some protection or compliance for the software assets. Prohibiting the use of cloud-based virtual desktop software, conducting frequent reviews of software licenses, and performing frequent internal audits of enterprise IT infrastructure are all examples of preventive or detective controls, which may help to prevent or deter the installation or use of unauthorized software, or to verify or validate the software assets, but they do not necessarily discover or remove the unauthorized software. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.2.1, page 3-11.

According to the CRISC Review Manual (Digital Version), a vulnerability is a flaw or weakness in an asset’s design, implementation, or operation and management that could be exploited by a threat. A delayed removal of employee access is a vulnerability, as it allows former employees to retain access to the organization’s IT assets and processes, which could lead to unauthorized disclosure, modification, or destruction of data or resources. A delayed removal of employee access could be caused by poor personnel management, lack of security awareness, or inadequate access control policies and procedures.

References = CRISC Review Manual (Digital Version), Chapter 1: IT Risk Identification, Section 1.5: IT Risk Identification Methods and Techniques, pp. 32-331

According to the CRISC Review Manual (Digital Version), the percentage of successful changes is the most effective key performance indicator (KPI) for change management, as it measures thequality and effectiveness of the change management process and its alignment with the organization’s objectives and requirements. The percentage of successful changes helps to:

Evaluate the extent to which the changes have met the expected outcomes and benefits

Identify and analyze the root causes of any failed or problematic changes and implement corrective actions or improvement measures

Monitor and report the performance and progress of the change management process and its impact on the organization

Enhance the confidence and satisfaction of the stakeholders and customers with the change management process and its results

References = CRISC Review Manual (Digital Version), Chapter 2: IT Risk Assessment, Section 2.4: IT Risk Scenarios, pp. 107-1081

Deviation from a mitigation action plan’s completion date should be determined by the risk owner as determined by risk management processes, because the risk owner is the person or entity who has the accountability and authority to manage the risk and its associated mitigation actions. The risk owner should monitor and report the progress and status of the mitigation action plan, and determine if there is any deviation from the expected completion date, based on the risk management processes and criteria. The other options are not the ones who should determine the deviation, because:

Option A: Change management as determined by a change control board is a process that ensures that any changes to the project scope, schedule, cost, or quality are controlled and approved, but it does not determine the deviation from the mitigation action plan’s completion date, which is a risk management activity.

Option B: Benchmarking analysis with similar completed projects is a technique that compares the performance and practices of the current project with those of similar or successful projects, but it does not determine the deviation from the mitigation action plan’s completion date, which is a risk management activity.

Option C: Project governance criteria as determined by the project office is a set of rules and standards that define the roles, responsibilities, and authority of the project stakeholders, but it does notdetermine the deviation from the mitigation action plan’s completion date, which is a risk management activity. References = Risk and Information Systems Control Study Manual, 7th Edition, ISACA, 2020, p. 122.

Risk exposure is the product of risk likelihood and risk impact ratings. It represents the potential loss or damage that may result from a risk event. After implementing countermeasures, the risk likelihood and/or impact ratings may change, depending on the effectiveness of the countermeasures. Therefore, the risk exposure must also change to reflect the updated risk ratings. The other components of the register, such as risk owner, risk impact rating, and risk likelihood rating, may or may not change depending on the nature and scope of the countermeasures. References = Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Assessment, Section 2.4: IT Risk Response, page 87.

 According to the CRISC Review Manual (Digital Version), the most effective approach to mitigate the risk associated with data loss due to users sending sensitive information by email without using encryption is to block unencrypted outgoing emails which contain sensitive data. This is an example of a risk avoidance strategy, which aims to eliminate the risk by removing the source of the risk or the activity that causes the risk. Blocking unencrypted outgoing emails which contain sensitive data can prevent unauthorized access, disclosure, modification or destruction of the sensitive information, and thus protect the confidentiality, integrity and availability of the data. This approach can also deter users from violating the encryption policy and enforce compliance with the security standards and regulations.

References = CRISC Review Manual (Digital Version), Chapter 3: IT Risk Response, Section 3.3: Risk Response Options, pp. 167-1681

The most important consideration when establishing a contingency plan and an alternate processing site for a company that has located its computer center on a moderate earthquake fault is that the alternative site does not reside on the same fault no matter how far the distance apart, as it ensures that the alternative site is not affected by the same earthquake event that may disrupt the primary site, and that the business continuity and recovery objectives can be met. The other options are not the most important considerations, as they are more related to the backup, priority, or readiness of the alternative site, respectively, rather than the location of the alternative site. References = CRISC Review Manual, 7th Edition, page 111.

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

Alignment to Business Objective (Answer C):

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

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

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

Comparison with Other Options:

A. The scenario is aligned to business control processes:

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

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

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

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

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

The primary reason for periodic penetration testing of Internet-facing applications is to identify vulnerabilities in the system, because this will help to improve the security and resilience of the applications and the data they process. A penetration test is a simulated cyberattack that aims to exploit the weaknesses and gaps in the security of an application or a system. A penetration test can reveal the vulnerabilities that may not be detected by other methods, such as automated scanning or code review. A penetration test can also measure the impact and severity of the vulnerabilities, as well as the effectiveness of the existing controls and defenses. A penetration test can also provide recommendations and solutions to remediate the vulnerabilities and prevent future attacks. Internet-facing applications are programs and services that are accessible from the internet, such as web applications, APIs, cloud services, or VPN gateways. Internet-facing applications are exposed to a variety of cyber threats, such as denial-of-service attacks, SQL injection attacks, cross-site scripting attacks, or credential stuffing attacks. These threats can compromise the confidentiality, integrity, and availability of the applications and the data they handle. Therefore, periodic penetration testing of Internet-facing applications is essential to identify vulnerabilities in the system and to protect the applications and the data from cyberattacks. References = Web Application Penetration Testing: A Practical Guide - BrightSecurity1, The Basics of Web Application Penetration Testing | Turing2, Periodic Penetration Testing: What is the best pentesting frequency …

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

A risk profile report is a document that summarizes the current status and trends of the risks that an organization faces, as well as the actions taken or planned to manage them1. A risk profile report is a useful tool for senior management to monitor and oversee the organization’s risk management performance and to make informed decisions and adjustments as needed2. One of the key components ofa risk profile report is the key performance indicators (KPIs), which are metrics used to measure andevaluate the achievement of the organization’s objectives and strategies3. KPIs are aligned with the organization’s risk appetite and tolerance, and they have specific targets or benchmarks that indicate the desired level of performance4. Therefore, if the KPIs are outside of targets, it means that the organization is not meeting its objectives and strategies, and that there may be gaps or issues in the risk management process or the risk response actions. This is a cause for further action by senior management, as they need to investigate the root causes of the deviation, assess the impact and implications of the underperformance, and take corrective or preventive measures to improve the situation and bringthe KPIs back to the targets. Incomplete KPI trend data, new KRIs, and lagging KRIs are not the most critical statements in a risk profile report that require further action by senior management, as they do not directly indicate a failure or a problem in the risk management performance or the achievement of the objectives and strategies. Incomplete KPI trend data means that there is missing or insufficient information on the historical or projected changes in the KPIs over time. This may affect the accuracy and reliability of the risk profile report, but it does not necessarily mean that the KPIs are outside of targets or that the objectives and strategies are not met. Senior management may need to request or obtain the complete KPI trend data, but this is not as urgent or important as addressing the KPIs that are outside of targets. New KRIs means that there are additional or revised metrics used to measure and monitor the level of risk associated with a particular process, activity, or system within the organization. This may reflect the changes or updates in the risk environment, the risk appetite and tolerance, or the risk assessment methodology. However, new KRIs do not directly indicate a failure or a problem inthe risk management performance or the achievement of the objectives and strategies. Senior management may need to review and approve the new KRIs, but this is not as urgent or important as addressing the KPIs that are outside of targets. Lagging KRIs means that there are metrics that measure and monitor the level of risk after a risk event has occurred or a risk response has been implemented. This may provide useful feedback and lessons learned for the risk management process, but it does not directly indicate a failure or a problem in the risk management performance or the achievement of the objectives and strategies. Senior management may need to analyze and evaluate the lagging KRIs, but this is not as urgent or important as addressing the KPIs that are outside of targets. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.3: Risk Reporting, pp. 201-205.

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

The likelihood rating in the risk register is a measure of how probable it is that a risk event will occur, given the current conditions and controls. The risk practitioner should change the likelihood rating if there is a significant change in the effectiveness of the controls that are implemented to prevent or reduce the risk. For example, if a control becomes obsolete, ineffective, or bypassed, the likelihood rating should increase, as the risk event becomes more likely to happen. Conversely, if a control becomes more efficient, reliable, or robust, the likelihood rating should decrease, as the risk event becomes less likely to happen. The other options are not likely to cause a change in the likelihood rating, as they are not directly related to the probability of the risk event. Risk appetite is the amount of risk that an organization is willing to accept in pursuit of its objectives. Control cost is the amount of resources that are required to implement and maintain a control. Risk tolerance is the acceptable level of variation that an organization is willing to allow for a risk to deviate from its desired level or expected outcome. These factors may influence the risk response or the risk acceptance, but not the likelihood rating. References = Risk and Information Systems Control Study Manual, Chapter 1: IT Risk Identification, Section 1.4: Risk Register, p. 25-26.

Upon receiving an external vulnerability alert, the first step in the CRISC risk process is to determine organizational exposure — i.e., whether and where the vulnerable software is actually used in the enterprise environment.

ISACA’s CRISC framework states:

“The initial step upon receiving notice of a new vulnerability is to assess the enterprise’s exposure to the threat to determine relevance and potential impact.”

Only after confirming exposure should the practitioner recommend patching, escalation, or other actions. Acting prematurely without confirmation could cause unnecessary disruptions.

Hence, B. Determine organizational exposure is correct.

CRISC Reference: Domain 2 – IT Risk Assessment, Topic: Vulnerability Management and Exposure Analysis.

New regulatory requirements impacting IT are those that impose new obligations, restrictions, or standards on how an organization uses, manages, or secures its IT systems, data, or services1. Examples of such regulations include the GDPR, the CCPA, the HIPAA, or the PCI-DSS2. New regulatory requirements impacting IT can pose significant challenges and risks for an organization, such as:

Compliance costs and efforts, such as updating policies, procedures, and systems, training staff, or hiring experts

Noncompliance penalties and consequences, such as fines, lawsuits, sanctions, or reputational damages

Operational disruptions or inefficiencies, such as system changes, data migrations, or service interruptions

Competitive disadvantages or opportunities, such as losing or gaining customers, partners, or markets3

The first step that should be done when a company is made aware of new regulatory requirements impacting IT is to review the risk tolerance and appetite. Risk tolerance is the acceptable level of variation that an organization is willing to accept around its risk appetite. Risk appetite is the amount and type of risk that an organization is willing to take in order to meet its strategic objectives. By reviewing the risk tolerance and appetite, the company can:

Establish a clear and consistent understanding of the organization’s goals, values, and expectations regarding the new regulatory requirements impacting IT

Assess the current and potential impacts of the new regulatory requirements impacting IT on the organization’s performance, operations, or assets

Determine the level of risk exposure and acceptance that the organization is comfortable with, and identify the risk thresholds or limits that should not be exceeded

Align the risk management strategies and actions with the organization’s risk tolerance and appetite, and prioritize the most critical and urgent risks to be addressed

Communicate and report the risk tolerance and appetite to the stakeholders and regulators, and ensure transparency and accountability

References = Regulating emerging technology | Deloitte Insights, Ten Key Regulatory Challenges of 2024 - kpmg.com, The Risks of Non-Compliance with Data Protection Laws, [Risk Tolerance - COSO], [Risk Appetite - COSO], [Risk Appetite and Tolerance - IRM]

The best way to ensure data is properly sanitized while in cloud storage is to cryptographically scramble the data. Cryptographic scrambling is the process of transforming data into an unreadable form using a secret key or algorithm. Cryptographic scrambling protects the data from unauthorized access, modification, or deletion, even if the cloud storage provider or a third party gains access to the data. Cryptographic scrambling also ensures that the data can be restored to its original form using the same key or algorithm, if needed. The other options are not as effective as cryptographic scrambling, because they either do not completely remove the data,or they make it impossible to recover the data. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.3.1, page 3-21.

 Risk appetite is the amount and type of risk that an organization is willing to accept in pursuit of its objectives. Risk appetite can be expressed in qualitative or quantitative terms, and can vary depending on the context and the stakeholder. Risk appetite should be defined and communicated by the senior management or the board of directors, and should guide the risk management decisions and actions throughout the organization. When a project team has accepted a risk outside the established risk appetite, the risk practitioner’s best course of action is to escalate the risk decision to the project sponsor for review, meaning that the risk practitioner should report the risk acceptance and its rationale to the project sponsor, who is the person or group that provides the resources and support for the project, and is accountable for its success. The project sponsor should review the risk decision and determine whether it is aligned with the organization’s objectives and strategy, and whether it requires any further approval oraction. References = Risk and Information Systems Control Study Manual, Chapter 1, Section 1.3.1, p. 25-26

As strategies evolve, so do the acceptable risk thresholds (tolerances). Regular KRI reassessment ensures alignment with the current risk appetite and supports timely, risk-informed decisions.