Free Practice Questions for Isaca CGEIT Exam

An enterprise that wishes to establish key risk indicators (KRIs) in an effort to better manage IT risk should first identify the enterprise risk appetite, because this would help to define the level of risk that the enterprise is willing and able to accept in pursuit of its objectives and value creation. The enterprise risk appetite should consider the external and internal factors that influence the IT environment, such as market trends, customer demands, innovation opportunities, regulatory requirements, and business strategies12. The KRIs should align with the enterprise risk appetite, and measure the potential impact and likelihood of the risks that may affect the IT performance and outcomes12. References := ISACA, CGEIT Review Manual, 7th Edition, 2019, page 75-76.

 According to the CGEIT exam guide, the success of IT investments is measured by the extent to which they deliver the expected benefits to the enterprise and its stakeholders. Therefore, the percentage of IT investments that meet expected benefits is the best metric to indicate the success of IT investments. This metric reflects the alignment of IT with business objectives and strategies, as well as the effectiveness and efficiency of IT processes and services. The other metrics are not directly related to the success of IT investments, but rather to the management and governance of IT. References: CGEIT Exam Candidate Guide, page 13. CGEIT Certification, Performance Measurement Metrics for IT Governance

This should be the IT steering committee’s primary concern, as moving to an external cloud service provider may introduce new or different risks to the enterprise, such as data security,privacy, compliance, availability, performance, vendor lock-in, and service level agreements12. The IT steering committee should update the business risk profile to reflect the current and potential risks associated with the cloud service provider, and to ensure that they are aligned with the enterprise’s risk appetite and tolerance12. The IT steering committee should also monitor and manage the risks throughout the cloud service lifecycle, and implement appropriate controls and mitigation strategies to protect the enterprise’s assets and interests12. The other options are not as important as updating the business risk profile, as they are not directly related to the strategic decision to reduce operating costs for the next year. Calculating the cost of the current solution, changing the IT steering committee charter, and revising the business’s balanced scorecard are possible actions that may be taken after updating the business risk profile, based on the identified risks and their levels3.

The best approach to address the concern of outdated internal processes is to map the processes to a capability maturity model (CMM). A CMM is a framework that describes the levels of maturity and capability of a process, from initial to optimized. Mapping the processes to a CMM can help the CIO to assess the current state and performance of the processes, as well as identify and prioritize the areas for improvement. Mapping the processes to a CMM can also help align the processes with the IT strategy and goals, as well as ensure compliance with standards and best practices. Software Capability Maturity Model (CMM) | IT Governance UK provides an overview of the CMM framework and its benefits.

Implementing a process review policy, assembling a project review team, and verifying that the processes are still needed are also possible steps to take to address the concern of outdated internal processes, but they are not the best approach. Implementing a process review policy is a measure that defines the frequency, scope, criteria, and methods for reviewing and updating the processes. Implementing a process review policy can help ensure the consistency and quality of the process review activities, as well as prevent future obsolescence or inefficiency of the processes. Assembling a project review team is a task that involves selecting and assigning the roles and responsibilities of the people who will conduct or participate in the process review activities. Assembling a project review team can help ensure the availability and suitability of the resources and skills for the process review activities, as well as facilitate the collaboration and communication among the stakeholders. Verifying that the processes are still needed is a question that evaluates the relevance and value of the processes for the enterprise’s objectives and operations. Verifying that the processes are still needed can help eliminate or simplify any unnecessary or redundant processes, as well as optimize or integrate any overlapping or interdependent processes.

 Privacy requirements should be the most important consideration for a hospital planning to use cloud services and mobile applications, because they involve the protection of sensitive and personal health information (PHI) of the patients and staff. PHI is a type of data that is subject to strict regulations and standards, such as the Health Insurance Portability and Accountability Act (HIPAA) in the US1, the General Data Protection Regulation (GDPR) in the EU2, and the Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada3. These regulations and standards require the hospital to ensure that PHI is collected, stored, processed, and transmitted in a secure and compliant manner, and that the rights and consent of the data subjects are respected. Using cloud services and mobile applications can pose significant challenges and risks to privacy, such as data breaches, unauthorized access, data loss, data residency, third-party liability, etc. Therefore, the hospital should carefully evaluate the privacy requirements and implications of using cloud services and mobile applications, and adoptappropriate governance, policies, controls, and measures to safeguard PHI in the cloud environment.

Effective IT risk management is not a standalone process, but rather a part of the overall business risk management framework. IT risks are interrelated with business risks, and they can affect the achievement of business objectives and strategies. Therefore, IT risk management should align with business risk management processes, such as identifying, assessing, prioritizing, treating, monitoring, and reporting risks. Aligning IT risk management with business risk management processes can help ensure that IT risks are considered in the context of the business environment, that IT risk appetite and tolerance are consistent with the business risk appetite and tolerance, that IT risk responses are aligned with the business risk responses, and that IT risk performance is communicated to the relevant stakeholders. Aligning IT risk management with business risk management processes can also help optimize the use of resources, enhance the value of IT investments, and improve the governance and accountability of IT risks. 

A key governance consideration for the IT steering committee when evaluating vendors to provide mobile device management (MDM) services is to ensure that the service level targets align with the business requirements. Service level targets are the measurable and agreed-upon levels of performance and quality that the vendor is expected to deliver for the MDM services. These targets should reflect the business needs and expectations of the organization, such as availability, reliability, security, scalability, and functionality of the MDM services. Service level targets should also be realistic, achievable, and verifiable, and should be specified in the service level agreements (SLAs) that are part of the contract with the vendor. By ensuring that the service level targets align with the business requirements, the IT steering committee can facilitate the selection of a suitable and reliable vendor that can provide effective and efficient MDM services for the organization. References: CGEIT Exam Content Outline | ISACA1, CGEIT Review Manual (Digital Version), Mobile Device Management (MDM) - Gartner2, How to Set Service Level Targets for Your IT Support Team

The best criterion for prioritizing IT risk remediation when resource requirements are equal is the impact on business, as it reflects the potential consequences of the IT risk on the enterprise’s objectives, operations, reputation, and stakeholders. The impact on business can be measured by factors such as financial loss, operational disruption, customer dissatisfaction, regulatory violation, or reputational damage. The higher the impact on business, the higher the priority for IT risk remediation.

Deviation from IT standards, IT strategy alignment, and IT audit recommendations are also important criteria for prioritizing IT risk remediation, but they are not the best criterion. Deviation from IT standards is the degree to which an IT process, system, or service does not comply with the established policies, procedures, or best practices. Deviation from IT standards can indicate a weakness or gap in IT governance or management, but it does not necessarily reflect the severity or urgency of the IT risk. IT strategy alignment is the degree to which an IT process, system, or service supports and enables the enterprise’s strategy and goals. IT strategy alignment can indicate the value or importance of an IT process, system, or service, but it does not directly measure the impact of the IT risk on the business. IT audit recommendations are the suggestions or actions proposed by an IT auditor to address the findings or issues identified during an IT audit. IT audit recommendations can provide guidance and direction for IT risk remediation, but they are not a definitive or objective criterion for prioritization.

References := IT Risk Management Guide for 2022 | CIO Insight; What is IT Governance, Risk, and Compliance (GRC)?; Holistic IT Governance, Risk Management, Security and Privacy: Needed for Effective Implementation and Continuous Improvement - ISACA; Cyberrisk Governance: A Practical Guide for Implementation - ISACA.

Learn more:

1. cioinsight.com2. securityscorecard.com3. isaca.org4. isaca.org5. cldigital.com+1 more

 Quantitative analysis is the best method to assess the risk of plausible scenarios that could result in economic loss associated with major IT investments, because it tries to assign objective numerical or measurable values to the components of the risk assessment and to the assessment of potential loss1. Quantitative analysis can help estimate the probability and impact of risk events, calculate the expected monetary value (EMV) of risk, and compare the costs and benefits of different risk responses2. Quantitative analysis can also provide a more accurate and objective basis for decision making than qualitative analysis, which is scenario-based and relies on subjective judgments1. References := 1: Risk Assessment and Analysis Methods: Qualitative and Quantitative - ISACA12: 6 Types of Risk Assessment Methodologies + How to Choose - Drata2

The best IT governance action to minimize the likelihood of IT failures jeopardizing the corporate value of an IT-dependent organization is to implement an IT risk management framework. An IT risk management framework is a set of policies, processes, and tools that help identify, analyze, evaluate, treat, monitor, and communicate the IT risks that may affect the achievement of the organization’s objectives and goals. An IT risk management framework can help reduce the probability and impact of IT failures, such as system outages, data breaches, cyberattacks, or project delays, by implementing appropriate controls and mitigation strategies. An IT risk management framework can also help align the IT risks with the organization’s riskappetite and tolerance, as well as ensure compliance with regulations and standards. What is IT Risk Management? | RSA provides an overview of IT risk management and its benefits.

Installing an IT continuous monitoring solution, defining IT performance management measures, and benchmarking IT strategy against industry peers are also useful IT governance actions, but they are not the best way to minimize the likelihood of IT failures. Installing an IT continuous monitoring solution is a process that uses software tools or systems to collect, analyze, and report on IT performance and compliance data, such as availability, reliability, security, or efficiency. Installing an IT continuous monitoring solution can help detect and respond to IT failures in a timely and effective manner, as well as improve the visibility and accountability of IT operations. Defining IT performance management measures is a task that involves selecting and defining the metrics that measure the achievement of specific goals or objectives for IT processes, systems, or services. Defining IT performance management measures can help evaluate and communicate the effectiveness and efficiency of IT operations, services, and projects, as well as their contribution to business value and customer satisfaction. Benchmarking IT strategy against industry peers is a technique that involves comparing and contrasting the IT practices, capabilities, or outcomes of an organization with those of its competitors or similar organizations. Benchmarking IT strategy against industry peers can help identify and adopt best practices or innovations for IT governance and management, as well as assess the strengths and weaknesses of the organization’s IT performance.

 According to the CGEIT exam guide, a root cause analysis (RCA) is a systematic process of identifying and analyzing the factors that cause an undesirable event or condition. It helps to determine the underlying causes of problems and issues, and to prevent their recurrence. A root cause analysis is the best way to enable the CIO to build a corrective action plan, as it provides a clear understanding of the reasons why IT service levels consistently fall below those outlined in the SLA, and suggests possible solutions and improvements. The other options are not sufficient to build a corrective action plan, as they do not address the root causes of the SLA failure. References: CGEIT Exam Candidate Guide, page 15. CGEIT Certification, Root Cause Analysis

The best way to ensure all enterprise employees understand the corporate code of business conduct is to mandate annual ethics training that includes an exam. This will help employees to learn the content and principles of the code, as well as test their knowledge and comprehension. Ethics training can also reinforce the importance of ethical behavior and the consequences of violating the code. According to a Harvard Business Review article1, ethics training can help employees to develop ethical skills, such as moral awareness, moral reasoning, moral courage, and moral leadership1. A code of conduct is not effective if employees do not know or understand it, or if they do not apply it in their daily work. Therefore, ethics training is essential to ensure employees are aware of and adhere to the corporate code of business conduct. References: CGEIT Review Manual (Digital Version) or CGEIT Review Manual (Print Version), Chapter 1: Governance of Enterprise IT, Section 1.1: IT Governance Frameworks andPrinciples, Subsection 1.1.2: IT Governance Principles, Page 14-15. Building an Ethical Company.

 The first step to address the issue of complaints from business executives regarding the amount their units are being charged for IT services should be to quantify consumption and service level agreement (SLA) achievements per business unit. This will help the CIO to understand the actual usage and performance of IT services by each business unit, as well as to justify and communicate the chargeback rates based on the value and quality of IT services delivered. Quantifying consumption and SLA achievements can also help identify and address any inefficiencies, discrepancies, or gaps in IT service delivery or chargeback methods.

Agreeing to reduce charge rates and improve relationship management with the business, looking into outsourcing of support functions to drive down the cost structure, and asking the CFO about budget revisions for the business units’ IT expenditures are possible steps to take after quantifying consumption and SLA achievements, but they are not the first step. Agreeing to reduce charge rates without understanding the underlying causes of the complaints may result in underfunding or underpricing of IT services, which may affect their quality and sustainability. Improving relationship management with the business is important, but it should be based on transparent and accurate information about IT service consumption and chargeback. Looking into outsourcing of support functions may reduce the cost structure, but it may also introduce new risks and challenges for IT governance and management. Asking the CFO about budget revisions may help align IT expenditures with business priorities, but it may not address the root causes of the dissatisfaction with IT chargeback.

References := IT Chargeback Drives Efficiency - Uptime Institute Blog; What is IT governance? A formal way to align IT & business strategy; Chargeback vs. IT Governance – HEIT Management.

 According to the CGEIT exam guide, IT resource management is the process of planning, acquiring, allocating, monitoring and optimizing the IT resources of an enterprise to support its strategy, objectives and goals. To evaluate IT resource management, it is most important to define the applicable key goals that the IT resources are expected to achieve or contribute to. These key goals should be aligned with the enterprise’s vision, mission and values, as well as the stakeholder needs and expectations. The key goals should also be specific, measurable, achievable, relevant and time-bound (SMART), and should be communicated and agreed upon by all relevant parties. Defining the applicable key goals will help to assess the performance, value and impact of IT resource management, as well as to identify the gaps, issues and opportunities for improvement. The other options are not as important as defining the applicable key goals, as they are more related to the implementation and execution of IT resourcemanagement, rather than its evaluation. References: CGEIT Exam Candidate Guide, page 14. CGEIT Certification, IT Resource Management

 IT governance is the process of ensuring that IT supports and enables the achievement of the enterprise’s goals and objectives, and delivers value to the stakeholders1. Stakeholders are the individuals or groups that have a stake in the success or failure of IT governance, such as board members, senior management, business units, IT function, customers, suppliers, regulators, and society1. By considering stakeholders’ support, an enterprise can ensure that the IT governance framework is aligned with and driven by the stakeholders’ needs, expectations, and interests1. Stakeholders’ support can also help to facilitate the communication, collaboration, and decision-making processes among the IT governance participants, and to gain their commitment and buy-in for the IT governance implementation and improvement1.

The other options are not as important as stakeholders’ support, as they are either specific aspects or outcomes of IT governance, but not comprehensive factors. Information technology risk is the potential for negative consequences due to the use or misuse of IT within an enterprise. Information technology risk can affect the IT governance framework, but it is not the most important factor to consider, as it is only one of the many elements that influence ITgovernance2. Framework development cost is the amount of money and resources required to design and implement the IT governance framework. Framework development cost can affect the IT governance framework, but it is not the most important factor to consider, as it is only one of the many criteria that evaluate IT governance3. Information technology strategy is the plan that defines how the IT function supports and enables the overall business strategy and objectives of an enterprise. Information technology strategy can affect the IT governance framework, but it is not the most important factor to consider, as it is only one of the many components that constitute IT governance