Free Practice Questions for Isaca CRISC Exam

According to the CRISC Review Manual, performing the assessment as it would normally be done is the best approach when a risk practitioner has been asked by a business unit manager for special consideration during a risk assessment of a system, because it ensures that the risk practitioner maintains their objectivity, integrity, and professionalism. The risk practitioner should not compromise the quality or accuracy of the risk assessment, regardless of any external pressure or influence. The risk practitioner should follow the established risk assessment methodology and standards, and report the risk results and recommendations based on the facts and evidence. The other options are not the best approaches, because they may affect the credibility or reliability of the risk assessment. Conducting an abbreviated version of the assessment may result in incomplete or insufficient risk information, which may lead to poor riskdecisions or actions. Reporting the business unit manager for a possible ethics violation may escalate the situation or create a conflict of interest, which may hinder the risk assessment process or outcome. Recommending an internal auditor perform the review may transfer the responsibility or accountability of the risk practitioner, which may undermine their role or authority. References = CRISC Review Manual, 7th Edition, Chapter 2, Section 2.2.1, page 74.

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.

 User Access Management:

Effective user access management ensures that accounts are properly created, managed, and disabled to prevent unauthorized access.

Monitoring the percentage of accounts disabled within the SLA helps ensure that the organization responds promptly to changes in user status, reducing the risk of unauthorized access.

 Importance of KPI:

This KPI measures the efficiency and effectiveness of the user access management process by tracking how quickly accounts are disabled when no longer needed.

A high percentage indicates timely action, reducing the risk of orphaned accounts being exploited.

 Comparing Other KPIs:

Proportion of End Users Having More Than One Account:Useful but not directly related to the timeliness of disabling accounts.

Proportion of Privileged to Non-Privileged Accounts:Important for monitoring privilege distribution but does not measure process efficiency.

Percentage of Accounts Not Activated:Indicates potential inefficiencies but does not address the risk of active accounts.

 References:

The CRISC Review Manual highlights the importance of timely account management to mitigate access risks (CRISC Review Manual, Chapter 3: Risk Response and Mitigation, Section 3.3 User Access Management)​​.

 A risk profile is a summary of the key risks that affect an organization, a business unit, a process, or a project. A risk profile can help stakeholders understand the current and potential exposure to various sources of uncertainty, and prioritize the risk response accordingly. Classification of risk profiles is the process of grouping and categorizing risks based on common characteristics, such as source, impact, likelihood, or response strategy. Classification of risk profiles can help communicate risk assessment results to stakeholders by providing a clear and consistent way of presenting and comparing risks across different domains, levels, or perspectives. Classification of risk profiles can also help identify patterns, trends, and interrelationships among risks, and facilitate the allocation of resources and responsibilities for risk management. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.1: Risk Profile, p. 193-195.

 The most likely effect on the associated risk when the effectiveness of a control has decreased is that the residual risk changes. Residual risk is the risk that remains after the implementation of risk responses or controls. If the control becomes less effective, the residual risk will increase, as the risk exposure and impact will be higher than expected. The risk impact, the risk classification, and the inherent risk are not likely to change when the effectiveness of a control has decreased, as they are more related to the nature and characteristics of the risk, rather than the control performance. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 2, Section 2.1.1.4, page 541

1: ISACA Certified in Risk and Information Systems Control (CRISC®) Exam Guide, Answer to Question 652.

To reduce risk impact, the best course of action is to implement corrective measures, which are actions taken to eliminate or minimize the negative effects of a risk event after it has occurred12.

Corrective measures can include restoring normal operations, repairing or replacing damaged assets, recovering lost data, compensating affected stakeholders, and implementing lessons learned12.

Corrective measures can reduce risk impact by minimizing the duration, severity, and scope of the consequences of a risk event, as well as preventing recurrence or escalation of similar risks in the future12.

The other options are not the best course of action to reduce risk impact, but rather different types of risk responses that may have different objectives and effects. For example:

Creating an IT security policy is an example of a preventive measure, which is an action taken to avoid or reduce the likelihood of a risk event before it occurs12. A preventive measure can reduce risk exposure, but not risk impact.

Implementing detective controls is an example of a monitoring measure, which is an action taken to identify and measure the occurrence or status of a risk event during or after it occurs12. A monitoring measure can provide timely information and feedback, but not reduce risk impact.

Leveraging existing technology is an example of a mitigation measure, which is an action taken to reduce the likelihood or impact of a risk event before it occurs12. A mitigation measure can reduce risk exposure, but not necessarily risk impact. References =

1: Risk Management Guide for Information Technology Systems, NIST Special Publication 800-30, July 2002

2: Project Risk Management Handbook, California Department of Transportation, June 2011

According to the CRISC Review Manual (Digital Version), the best way to mitigate the risk associated with data integrity loss in the new payroll system after data migration is to compare the processing output from both systems using the previous month’s data, as this ensures that thenew system produces the same results as the old system for the same input data. Comparing the processing output from both systems using the previous month’s data helps to:

Verify the accuracy and completeness of the data migration process and identify any errors or discrepancies in the data transfer

Validate the functionality and performance of the new system and confirm that it meets the business requirements and expectations

Evaluate the consistency and reliability of the data processing and reporting in the new system and detect any anomalies or deviations

Recommend and implement appropriate actions or measures to address any issues or findings in the data migration and the new system

Communicate and coordinate the data migration and the new system testing with the relevant stakeholders, such as the data owners, the users, and the senior management

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

Determining the value of data is essential when implementing a DLP system. Understanding data value helps prioritize protection efforts, allocate resources effectively, and ensure that critical information assets are adequately safeguarded against loss or unauthorized access.

The legal and regulatory risk associated with business conducted over the Internet is driven by the laws and regulations of each individual country. Legal and regulatory risk is the risk of non-compliance or violation of the applicable laws and regulations that govern the business activities, operations, or transactions. Business conducted over the Internet involves the use of the global network of interconnected computers and devices to exchange information, goods, or services across the geographic boundaries. Business conducted over the Internet may expose the enterprise to various legal and regulatory risks, such as data protection, privacy, security, intellectual property, consumer protection, taxation, or jurisdiction issues. The legal and regulatory risk associated with business conducted over the Internet is driven by the laws and regulations of each individual country, as each country may have different or conflicting laws and regulations that apply to the business conducted over the Internet, and that may change or vary over time. The laws and regulations of each individual country may also impose different or additional obligations, requirements, or restrictions on the enterprise, and may subject the enterprise to different or multiple enforcement actions, penalties, or disputes. The jurisdiction inwhich an organization has its principal headquarters, international law and a uniform set of regulations, and international standard-setting bodies are not the drivers of the legal and regulatory risk associated with business conducted over the Internet, as they do not reflect the diversity and complexity of the legal and regulatory landscape that the enterprise may face when conducting business over the Internet. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 217.

A security log is a record of security-related events or activities that occur in an IT system, network, or application, such as user authentication, access control, firewall activity, or intrusion detection1. Security logscan help to monitor and audit the security posture and performance of the IT environment, and to detect and investigate any security incidents, breaches, or anomalies2.

The integrity of a security log refers to the accuracy and completeness of the log data, and the assurance that the log data has not been modified, deleted, or tampered with by unauthorized or malicious parties3. The integrity of a security log is essential for ensuring the reliability and validity of the log analysis and reporting, and for providing evidence and accountability for security incidents and compliance4.

Among the four options given, the most important factor to the integrity of a security log is the inability to edit. This means that the security log data should be protected from any unauthorized or accidental changes or alterations, such as adding, deleting, or modifying log entries, or changing the log format or timestamps5. The inability to edit can be achieved by implementing various controls and measures, such as:

Applying digital signatures or hashes to the log data to verify its authenticity and integrity

Encrypting the log data to prevent unauthorized access or disclosure

Implementing least privilege access to the log data to restrict who can view, modify, or delete the log data

Using write-once media or devices to store the log data, such as CD-ROMs or WORM drives

Sending the log data to a secure and centralized log server or repository, and using syslog or other protocols to ensure secure and reliable log transmission

Performing regular backups and archiving of the log data to prevent data loss or corruption

References = Security Log: Best Practices for Logging and Management, Security Audit Logging Guideline, Confidentiality, Integrity, & Availability: Basics of Information Security, Steps for preserving the integrity of log data, Guide to Computer Security Log Management

After a risk has been identified, the risk owner is in the best position to select the appropriate risk treatment option. The risk owner is the person or entity with the accountability and authority to manage a risk1. The risk owner is responsible for evaluating the risk, choosing the most suitable risk treatment option, implementing the risk treatment plan, and monitoring and reviewing the risk and its treatment2. The risk owner has the most knowledge and stake in the risk and its impact on the objectives and activities of the organization. The other options are not the best choices for selecting the risk treatment option, as they do not have the same level of accountability and authority as the risk owner. The risk practitioner is the person or entity with the knowledge and skills to perform the risk management activities1. The risk practitioner can assist the risk owner in identifying, analyzing, evaluating, and treating the risk, but the final decision and responsibility lies with the risk owner. The business process owner is the person or entity with the accountability and authority to manage a business process3. The business processowner may be affected by the risk or involved in the risk treatment, but the risk owner is the one who has the overall responsibility for the risk. The control owner is the person or entity with the accountability and authority to ensure that the controls are properly designed, implemented, and operated4. The control owner can provide input and feedback on the effectiveness and efficiency of the controls, but the risk owner is the one who decides which controls are needed and how they are applied. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 2, Section 2.1.3, Page 51.

The best way to prevent future occurrences of active network accounts belonging to former employees is to conduct a comprehensive review of access management processes. This review should include verifying that the access rights of all employees are updated regularly, especially when they change roles or leave the organization. The review should also ensure that there are clear policies and procedures for granting, modifying, and revoking access rights, and that these are followed consistently and documented properly. The review should also identify and address any gaps or weaknesses in the access management processes that could lead to unauthorized orinappropriate access. By conducting a comprehensive review of access management processes, the organization can improve its security posture and reduce the risk of data breaches or misuse of resources. References = IT audit: The ultimate guide [with checklist] | Zapier, IT auditing and controls – planning the IT audit [updated 2021]

The best indicator of the risk appetite and tolerance level for the risk associated with business interruption caused by IT system failures is the recovery time objective (RTO). The RTO is the maximum acceptable time or duration that a business process or an IT system can be disrupted or interrupted before it causes unacceptable impact or harm to the business. The RTO reflects the risk appetite and tolerance level for thebusiness interruption risk, as it indicates how much disruption or interruption the business can tolerate or accept, and how quickly the business needs to resume or recover the business process or the IT system. The RTO also helps to determine the priorities and requirements for the business continuity and recovery planning, and to select and implement the appropriate continuity and recovery strategies and solutions. Mean time to recover(MTTR), IT system criticality classification, and incident management service level agreement (SLA) are not the best indicators of the risk appetite and tolerance level for the business interruption risk, as they are either the measures or the outcomes of the business continuity and recovery performance, and they do not directly indicate how much disruption or interruption the business can tolerate or accept. References = CRISC Review Manual, 6th Edition, ISACA, 2015, page 50

Risk appetite determined by senior management reflects the enterprise's willingness to accept certain levels of risk, including noncompliance. This decision underscores the strategic trade-offs made in risk management, a key element inGovernance and Risk Policy Alignment.

The risk practitioner’s best recommendation after recovery steps have been completed is B. Perform a root cause analysis. A root cause analysis is a process of identifying and assessing the underlying causes of a problem or an incident. By performing a root cause analysis, the risk practitioner can help the organization to understand how and why the cyber attack happened, what vulnerabilities and gaps were exploited, and what actions and controls can be implemented to prevent or mitigate similar incidents in the future12

A root cause analysis can also help the organization to improve its incident response plan, which is a set of instructions to help IT staff detect, respond to, and recover from network security incidents3 A root cause analysis can provide valuable feedback and lessons learned from the cyber attack, and help the organization to update and test its incident response plan accordingly45

Developing new key risk indicators, recommending the purchase of cyber insurance, and reviewing the incident response plan are all possible actions that the risk practitioner can take after a cyber attack, but they are not the best recommendation. Developing new key risk indicators can help the organization to monitor and measure its risk exposure and performance, but it does not address the root causes of the cyber attack12 Recommending the purchase of cyber insurance can help the organization to hedge against the financial losses caused by cyber incidents, but it does not prevent or solve the underlying issues67 Reviewing the incident response plan can help the organization to evaluate its effectiveness and identify areas for improvement, but it does not explain how and why the cyber attack occurred345

Therefore, the best recommendation is to perform a root cause analysis, as it can help the organization to understand, resolve, and prevent the cyber attack and its consequences12

 The FIRST thing that the organization should do to reduce the risk of data exposure when modifying its system to enable acceptance of credit card payments is to conduct a risk assessment, because it is a process that involves identifying and analyzing the potential risks, threats, and vulnerabilities that may affect the system and the data, and their likelihood and impact on the business objectives and processes. A risk assessment can help to determine the current risk level and exposure, and to provide the basis for selecting and implementing the appropriate risk responses and controls. The other options are not the first thing that the organization should do, because:

Option B: Updating the security strategy is a result of conducting a risk assessment, but not the first thing that the organization should do. A security strategy is a plan that defines the security objectives, policies, standards, and procedures for the system and the data, and it should be aligned with the risk assessment results and the business requirements and expectations.

Option C: Implementing additional controls is a response to the risk assessment results, but not the first thing that the organization should do. Controls are the measures that are designed and implemented to prevent or reduce the occurrence or impact of the risks, threats, and vulnerabilities, and to ensure the confidentiality, integrity, and availability of the system and the data.

Option D: Updating the risk register is a part of the risk assessment process, but not the first thing that the organization should do. A risk register is a tool that documents and tracks the identified risks, their characteristics, their status, and their responses, and it should be updated regularly to reflect the current risk profile and exposure of the system and the data. References = Risk and Information Systems Control Study Manual, 7th Edition, ISACA, 2020, p. 108.

The primary objective of testing the effectiveness of a new control before implementation is to ensure that risk is mitigated by the control. A control is a measure or action that is taken to reduce the likelihood or impact of a risk, or to increase the likelihood or impact of an opportunity1. Testing the effectiveness of anew control before implementation means verifying whether the control can achieve its intended purpose and objective, and whether it can address the risk adequately and appropriately2. Testing the effectiveness of a new control before implementation helps to avoid wasting resources, time, and effort on implementing a control that is ineffective, inefficient, or unsuitable for the risk scenario. It also helps to ensure that the control does not introduce new or unintended risks, or adversely affect other controls or processes3. The other options are not the primary objective of testing the effectiveness of a new control before implementation, as they are either less relevant or less specific than ensuring that risk is mitigated by the control. Measuring efficiency of the control process is a secondary objective of testing the effectiveness of a new control before implementation. Efficiency refers to the optimal use of resources to achieve the desired outcome4. Measuring efficiency of the control process means evaluating whether the control can achieve its objective with the least amount of cost, time, and effort. Measuring efficiency of the control process helps to optimize the performance and value of the control, but it is not the main reason for testing the effectiveness of a new control before implementation. Confirming control alignment with business objectives is a tertiary objective of testing the effectiveness of a new control before implementation. Alignment refers to the consistency and coherence of the control with the goals and strategies of the organization5. Confirming control alignment with business objectives means ensuring that the control supports and enables the achievement of the organization’s mission, vision, and values. Confirming control alignment with business objectives helps to integrate the control with the organization’s culture and governance, but it is not the primary reason for testing the effectiveness of a new control before implementation. Complying with the organization’s policy is a quaternary objective of testing the effectiveness of a new controlbefore implementation. Policy refers to the set of principles and rules that guide the organization’s decisions and actions6. Complying with the organization’s policy means adhering to the standards and requirements that the organization has established for implementing and operating controls. Complying with the organization’s policy helps to ensure the quality and consistency of the control, but it is not the main objective of testing the effectiveness of a new control before implementation. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 2, Section 2.1.8, Page 61.

Risk mitigation is most effective when the residual risk is optimized, as it means that the risk exposure and impact have been reduced to the level that is aligned with the risk tolerance and appetite of the organization, and that the risk response is cost-effective and optimal. The other options are not the factors that determine the effectiveness of risk mitigation, as they are more related to the types or sources of risk, respectively, rather than the level or outcome of risk. References = CRISC Review Manual, 7th Edition, page 111.

The MOST important consideration when developing IT risk scenarios is the potential threats and vulnerabilities that may have an impact on the business, because they are the key elements of a risk scenario that describe the sources and causes of the risk, and the potential consequences and impacts of the risk on the business objectives and processes. The other options are not as important as the potential threats and vulnerabilities, because:

Option A: The impact of controls on the efficiency of the business in delivering services is a secondary consideration that may affect the cost-benefit analysis of the risk response, but it does not directly affect the identification and assessment of the risk scenario.

Option B: Linkage of identified risk scenarios with enterprise risk management is a good practice that ensures the alignment and integration of the IT risk management with the overall enterprise risk management, but it does not directly affect the identification and assessment of the risk scenario.

Option D: Results of network vulnerability scanning and penetration testing are useful sources of information that may reveal some of the threats and vulnerabilities in the IT environment, but they are not the only or the most important consideration when developing IT risk scenarios, as they may not cover all the aspects and dimensions of the risk. References = Risk and Information Systems Control Study Manual, 7th Edition, ISACA, 2020, p. 104.

A KRI is a measure used by an organization to measure the health of a particular risk. In this case, the risk practitioner is developing a metric to measure the risk associated with security threats that were not identified by antivirus software12.

References

1Standardized Scoring for Security and Risk Metrics - ISACA

2Key Performance Indicators for Security Governance, Part 1 - ISACA

According to the CRISC Review Manual, centralized log management is the best way to assist in reconstructing the sequence of events following a security incident across multiple IT systems in the organization’s network, because it enables the collection, correlation, analysis, and retention of log data from various sources. Centralized log management can provide a comprehensive and consistent view of the activities and transactions that occurred before, during, and after the incident, and can facilitate the identification of the root cause, impact, and scope of the incident. The other options are not the best ways to assist in reconstructing the sequence of events, because they do not provide the same level of detail and accuracy as centralized log management. Network monitoring infrastructure is a tool that helps to monitor the performance and availability of the network, but it does not capture the log data from the IT systems. Centralized vulnerability management is a process that helps to identify and remediate the vulnerabilities in the IT systems, but it does not record the events and transactions that occurred on the systems. Incident management process is a process that helps to respond to and resolve the incidents, but it does not provide the log data from the IT systems. References = CRISC Review Manual, 7th Edition, Chapter 5, Section 5.3.2, page 263.

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

Performing a threat assessment is the best course of action for a risk practitioner upon learning that regulatory authorities have concerns with an emerging technology that the organization is considering, because it helps to identify and analyze the sources and types of threats that may exploit the vulnerabilities or weaknesses of the technology, and to estimate their likelihood and impact. A threat is a potential event or action that may cause harm or damage to the organization or its objectives, such as a natural disaster, a cyberattack, or a human error. A threat assessment is a process of systematically identifying and assessing the threats that an organization faces, and estimating their probability and severity. An emerging technology is a new or innovative technology that has the potential to disrupt or transform the existing markets, industries, or practices, such as artificial intelligence, blockchain, or biotechnology. An emerging technology may offer benefits such as competitive advantage, efficiency, or creativity, but it may also pose risks such as technical complexity, interoperability issues, regulatory uncertainty, or ethicaldilemmas. Therefore, performing a threat assessment is the best course of action, as it helps to understand and evaluate the threats and their consequences, and to determine the appropriate controls or mitigating factors to reduce or eliminate them. Redesigning key riskindicators (KRIs), updating risk responses, and conducting a SWOT analysis are all possiblecourses of action to perform after performing a threat assessment, but they are not the best course of action, as they depend on the results and recommendations of the threat assessment. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.2.2, page 87

In a SaaS environment, the provider manages infrastructure and platforms. The primary asset that remains under the organization’s control is its hosted data. Hence, data is the key business asset.

By aligning risk scenarios with business objectives, risk practitioners can accurately measure the potential loss (materiality) based on business value. This enhances prioritization and allows for risk treatment to be directed toward what impacts the organization’s mission and goals the most.

As the threat landscape evolves, reporting on IT risk profile trends enables the organization tostay proactive. It helps ensure controls and strategies remain effective againstnew or increasing threats.

The primary concern for an organization planning to transfer and store its customer data with an offshore cloud service provider is data privacy. Data privacy is the protection of personal information fromunauthorized or unlawful access, use, disclosure, or transfer. Data privacy is governed by various laws, regulations, and standards that vary across different jurisdictions and sectors. An organization that transfers and stores its customer data with an offshore cloud service provider should ensure that the data privacy rights and obligations of the customers, the organization, and the cloud service provider are clearly defined and agreed upon, and that the data is protected according to the applicable data privacy requirements. An organization should also conduct due diligence and risk assessment on the offshore cloud service provider, and monitor and audit its performance and compliance on a regular basis. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 3, Section 3.2.1, page 127123

An IT license audit is a process that verifies the compliance of the IT software and hardware assets with the licensing agreements and regulations. An IT license audit can reveal the existence of unlicensed copies of software, which can expose the enterprise to legal, financial, and reputational risks. The best course of action in such a situation is to report the issue to management so that appropriate action can be taken. Management can then decide on the most suitable risk response strategy, such as procuring the necessary licenses, uninstalling the unlicensed software, or negotiating with the software vendor. Reporting the issue to managementcan also help to prevent further violations, identify the root causes, and implement corrective and preventive measures. The other options are not the best course of action, as they may not address the issue effectively, efficiently, or ethically. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 4, Section 4.2.1.1, pp. 156-157.

The first step is to assess whether the ineffective controls result in residual risk exceeding the risk appetite. This establishes the urgency and priority of remediation efforts and ensures alignment with enterprise risk thresholds, reflecting principles ofRisk Assessment and Prioritization.

The greatest concern with finding unreturned and unencrypted laptops belonging to former employees is the risk of unauthorized access to organizational data. The laptops may containsensitive or confidential information that could be compromised if they fall into the wrong hands. This could result in data breaches, reputational damage, legal liabilities, or regulatory penalties for the organization. Therefore, it is important to have proper controls in place to ensure that the laptops are returned, wiped, or encrypted when the employees leave the organization.

According to the CRISC Review Manual (Digital Version), the primary goal of a risk awareness program is to reduce the risk to an acceptable level by increasing the knowledge and understanding of the risk among the stakeholders. A risk awareness program should:

Educate the stakeholders about the sources, types and impacts of IT-related risks

Explain the roles and responsibilities of the stakeholders in the risk management process

Promote a risk-aware culture that supports the risk appetite and risk tolerance of the organization

Provide guidance and tools for identifying, assessing, responding and monitoring IT-related risks

Encourage the reporting and escalation of risk issues and incidents

Reinforce the benefits and value of effective risk management

References = CRISC Review Manual (Digital Version), Chapter 4: IT Risk Monitoring and Reporting, Section 4.2: IT Risk Reporting, pp. 224-2251

Documented procedures are the best way to enable effective IT control implementation. Documented procedures are the specific actions or steps that are performed to achieve the IT control objectives and mitigate the IT risks. Documented procedures provide clear guidance, consistency, and accountability for the IT control activities. Documented procedures also help to monitor and evaluate the effectiveness and efficiency of the IT controls, and to identify and address any gaps or weaknesses. The other options are not as effective as documented procedures, although they may support or complement the IT control implementation. Key risk indicators (KRIs) are metrics that measure the likelihood and impact of IT risks, but they do not specify how to implement the IT controls. Information security policies and standards are high-level statements that define the IT security goals and requirements, but they do not detail how to implement the IT controls. References = Risk and Information Systems Control Study Manual, Chapter 1, Section 1.3.2, page 1-15.

Risk management is the process of identifying, analyzing, evaluating, treating, monitoring, and communicating the risks that may affect the achievement of an organization’s objectives. The activity that best facilitates effective risk management throughout the organization is conducting periodic risk assessments, which are the systematic and structured methods of identifying and analyzing the potential sources and consequences of risk events. By conducting periodic risk assessments, an organization can proactively identify and prioritize the risks that pose the greatest threat or opportunity, and implement theappropriate risk responses to optimize the risk exposure and align it with the risk appetite and tolerance. References = CRISC Review Manual, 7th Edition, page 63.

Well-developed, data-driven risk measurements should be focused on providing a forward-looking view, as they enable the organization to anticipate and prepare for the potential changes and impacts of the risk level and exposure, and to take proactive and appropriate actions toaddress the risk. The other options are not the characteristics of well-developed, data-driven risk measurements, as they may not reflect the strategic, comprehensive, or timely aspects of the risk measurements, respectively. References = CRISC Review Manual, 7th Edition, page 110.

The most important factor for the risk practitioner to understand when creating an initial IT risk register is the organizational objectives. The organizational objectives are the specific, measurable, achievable, relevant, and time-bound (SMART) goals that the organization aims to accomplish. The organizational objectives should be aligned with the organization’s vision, mission, and strategy, as well as the stakeholder expectations and needs. The organizational objectives should also reflect the desired outcomes and benefits of the organization, such as increasing revenue, reducing costs, improving quality, or enhancing customer satisfaction. Understanding the organizational objectives is the most important factor when creating an initial IT risk register, because it provides the context, scope, and criteria for identifying, analyzing, and prioritizing the IT risks that may affect or be affected by the organizational objectives.Understanding the organizational objectives also helps to align the IT risk management process with the organizational risk management process, and to communicate the value and impact of the IT risks and the IT risk responses to the senior management and other stakeholders. The other options are not the most important factor, although they may be relevant or influential to the IT risk register. Enterprise architecture (EA) is a conceptual blueprint that defines the structure and operation of an organization. EA describes the current and future state of the organization in terms of its business processes, information systems, and technology infrastructure, and the relationships and dependencies among them. EA also provides the principles, standards, and guidelines for designing, developing, and implementing the organization’s solutions and services. EA can help to understand the IT risk sources, causes, and effects, as well as the IT risk mitigation options and opportunities, but it does not define the purpose or the scope of the IT risk register. Control environment is the set of policies, procedures, and mechanisms that ensure the reliability, security, and quality of the organization’s activities and information. Control environment includes the tone and culture at the top, the roles and responsibilities for governance and oversight, the internal control framework and methodology, and the monitoring and reporting systems. Control environment can help to assess the IT risk levels and the IT risk responses, as well as to ensure the compliance and accountability of the IT risk management process, but it does not provide the context or the criteria for the IT risk register. IT objectives are the specific, measurable, achievable, relevant, and time-bound (SMART) goals that the IT function aims to accomplish. IT objectives should be aligned and consistent with the organizational objectives, as well as the IT strategy and IT governance. IT objectives should also reflect the expected outcomes and benefits of the IT function, such as delivering value, enabling innovation, or supporting transformation. IT objectives can help to identify and prioritize the IT risks that may affect or be affected by the IT objectives, but they are not the same as or more important than the organizational objectives. References = Three Steps to Creating a Simple IT Risk Register - Gartner, Risk Register Template and Examples | Prioritize and Manage Risk, IT Resources | Knowledge & Insights | ISACA

The most important objective from a cost perspective for considering aggregated risk responses in an organization is to address more than one risk response. Aggregated risk responses are risk responses that can affect multiple risks or objectives simultaneously. By addressing more than one risk response, the organization can achieve cost efficiency and effectiveness in risk management. Prioritizing risk response options, reducing likelihood, and reducing impact are other possible objectives, but they are not as important from a cost perspective as addressing more than one risk response. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 10; CRISC Review Manual, 6th Edition, page 140.

 Digital Signature Software:

Digital signatures are used to verify the authenticity and integrity of a message, document, or software. They provide cryptographic proof that the information has not been altered and that it comes from a verified source.

 Importance of Nonrepudiation:

Nonrepudiation ensures that the sender of the message cannot deny having sent the message and the recipient cannot deny having received it. This is critical for legal and security purposes, as it provides undeniable proof of the origin and integrity of the information.

 Selecting Digital Signature Software:

When selecting digital signature software, the most important consideration is that it provides strong nonrepudiation capabilities. This ensures that all parties involved can trust the authenticity and integrity of the signed data.

 Comparing Other Considerations:

Availability:Ensures the software is accessible when needed but does not directly impact the trustworthiness of the signatures.

Accuracy:Important but generally inherent in properly functioning digital signature software.

Completeness:Ensures all required information is included but nonrepudiation is the critical factor for security and legal purposes.

 References:

The CISSP Study Guide emphasizes the importance of nonrepudiation in digital signature technology to ensure authenticity and accountability (Sybex CISSP Study Guide, Chapter 7: PKI and Cryptographic Applications)​​.

Avoiding the risk means eliminating the source of the risk or changing the likelihood or impact to zero. In this case, the source of the risk is the collection of customers’ personally identifiable information (Pll), which could be exposed to unauthorized parties and result in severe fines. Therefore, the best action to avoid the risk is to modify the business processes to stop collecting Pll, as this would eliminate the possibility of data leakage and the associated consequences. The other options are not as effective as modifying the business processes, because they do not avoid the risk, but rather mitigate or transfer the risk, as explained below:

A. Reduce retention periods for Pll data is a mitigation action, as it reduces the impact of the risk by minimizing the amount of data that could be leaked and the duration of exposure.

B. Move Pll to a highly-secured outsourced site is a transfer action, as it shifts the responsibility of protecting the data to a third party, but does not eliminate the risk of data leakage.

D. Implement strong encryption for Pll is a mitigation action, as it reduces the likelihood of the risk by making the data unreadable to unauthorized parties, but does not eliminate the risk of data leakage. References = Risk and Information Systems Control Study Manual, Chapter 2, Section 2.2.2, page 40.

Involving stakeholders ensures all perspectives are considered, leading to more accurate risk identification, assessment, and prioritization.

Log modification undermines data integrity, which is critical for accurate risk monitoring. Ensuring log integrity supports reliable KRI assessments, a key focus within theRisk Monitoring and Reportingframework.

The percent of patches implemented within established timeframe is the best metric to demonstrate the effectiveness of an organization’s patch management process, as it measures how well the organization meets its patching objectives and reduces its exposure to vulnerabilities. This metric reflects the timeliness, completeness, and quality of the patching process, and can be compared against the organization’s patch management policy and standards. A high percent of patches implemented within established timeframe indicates that the organization has a mature and efficient patch management process that minimizes the risk of security breaches or operational disruptions due to unpatched systems.

Whose risk tolerance matters most when making a risk decision depends on the context and the perspective of the decision-maker. However, in general, the business process owner of the exposed assets is the most important stakeholder to consider, as they are accountable for the risks and the outcomes of the risk decisions. The business process owner has the authority, responsibility, and knowledge to manage the risks that affect their business objectives, performance, and reputation. The business process owner also has the best understanding of the risk appetite and tolerance of the organization, and how to align the risk decisions with the organizational strategy and context. The other options are not the most important stakeholders to consider, although they may have some influence or interest in the risk decisions. Customers who would be affected by a breach are external stakeholders who may have different risk preferences and expectations than the organization, and who may not be fully aware of the risk exposure or mitigation options. Auditors, regulators, and standards organizations are alsoexternal stakeholders who may impose some requirements or constraints on the risk decisions, but who may not have the same level of involvement or impact as the business process owner. The information security manager is an internal stakeholder who may provide some technical expertise or guidance on the risk decisions, but who may not have the same level of authority or accountability as the business process owner. References = Risk Appetite vs. Risk Tolerance: What is the Difference?; Principles of risk decision-making; Risk Tolerance - Overview, Factors, and Types of Tolerance; Five Factors to Consider When Establishing Risk Tolerance; Risk Tolerance - Overview, Factors, and Types of Tolerance

Managing IT regulatory compliance risk in the same manner as other operational risks ensures a consistent and integrated approach to risk management. This involves identifying, assessing, mitigating, and monitoring compliance risks using the organization's established risk management framework. Such an approach promotes efficiency and ensures that compliance risks are not siloed but are considered within the broader context of enterprise risk management.

Conducting a risk assessment is a critical process that helps organizations identify, evaluate, and prioritize risks that could impact their objectives. The introduction of a new product line is most likely to trigger the need for a risk assessment due to the following reasons:

Introduction of a New Product Line (Answer D):

Significance: Launching a new product involves significant changes to business processes, technologies, and possibly market dynamics. It introduces new elements that could affect the organization's risk profile.

Complexity and Uncertainty: New products often come with unknown risks and uncertainties. Understanding these risks is crucial to ensure they are managed effectively.

Impact on Operations: A new product can impact various facets of the organization, including production, supply chain, IT infrastructure, and customer support. Assessing risks helps in planning and mitigating potential disruptions.

Compliance and Regulatory Considerations: New products might have to comply with new regulations or standards, necessitating a review of associated risks.

Comparison with Other Options:

A. An incident resulting in data loss:

Purpose: While incidents like data loss are serious and require immediate response and investigation, they typically trigger incident management and post-incident reviews rather than a full risk assessment.

B. Changes in executive management:

Purpose: Changes in leadership can influence the strategic direction and priorities of the organization, but they do not inherently introduce new operational risks that necessitate an immediate risk assessment.

C. Updates to the information security policy:

Purpose: Policy updates are often based on previously identified risks and aim to mitigate them. They are more about adjusting controls rather than reassessing the risk landscape completely.

Conducting a proof of concept in a non-production environment ensures that any potential issues or vulnerabilities in the AI technology do not affect live systems or data. This approach allows for thorough testing and evaluation without risking operational disruptions or data breaches.

According to the Risk and Information Systems Control documents, the risk practitioner should conclude that no action is required as there was no impact. The fact that there have been no interruptions to business operations despite the increasing hardware failure incidents indicates that the built-in redundancy and fault-tolerant architecture are effective in ensuring continuity.

Options A and C are not necessary in this scenario. A root cause analysis (Option A) might be considered if there were actual interruptions or impact on business operations. However, since there were no interruptions, a root cause analysis may not be immediately required. Similarly, upgrading hardware (Option C) may not be necessary if the existing controls are effectively preventing business disruptions.

References = Risk and Information Systems Control Study Manual

Comprehensive and Detailed Explanation From Exact Extract:

A global policy that accommodates country-specific requirements balances consistency and compliance. It establishes a baseline of controls while allowing adaptation to local laws and cultural differences. Uniform application without adaptation risks non-compliance. Country-specific policies alone may lack global coherence. Therefore, accommodating local requirements within a global policy framework is best practice.

Multi-factor authentication is the most effective way to mitigate the risk of unauthorized access to the system, as it requires the users to provide more than one piece of evidence to prove their identity, such as a password, a token, a biometric feature, etc. This reduces the likelihood of compromising the credentials and ensures that only authorized users can perform maintenance on the system.

Single sign-on is a convenience feature that allows users to access multiple systems with one set of credentials, but it does not address the risk of sharing credentials among multiple users.

Audit trail review is a detective control that can help identify and investigate unauthorized access to the system, but it does not prevent or mitigate the risk of credential compromise.

Data encryption at rest is a security measure that protects the data stored on the system from unauthorized access, but it does not prevent or mitigate the risk of credential compromise. References = CRISC Review Manual, 7th Edition, ISACA, 2020, page 107-108.

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

Sensitivity and reliability are the most important criteria for selecting KRIs, as they indicate how well the KRIs reflect the changes in the risk level and how consistent and accurate the KRIs are in measuring the risk.Sensitivity means that the KRIs should respond quickly and proportionally to the variations in the risk exposure, and provide early warning signals of potential risk events. Reliability means that the KRIs should be based on valid and verifiable data sources, and produce consistent and comparable results over time and across different units or functions. Historical data availability, implementation and reporting effort, and ability to display trends are also useful criteria, but they are not as critical as sensitivity and reliability.