Free Isaca CGEIT Practice Exam with Questions & Answers | Set: 3

The CIO’s first step in deciding the appropriate response to the new regulatory requirement should be to consult with legal and risk experts to understand the requirements. This step is important because the legal and risk experts can provide the CIO with the relevant and accurate information about the new regulation, such as its scope, objectives, implications, and deadlines. The legal and risk experts can also advise the CIO on the potential risks and impacts of non-compliance, as well as the best practices and strategies for compliance .

The other options are not the first step in deciding the appropriate response to the new regulatory requirement, but rather subsequent steps that depend on the outcome of the consultation with the legal and risk experts. Revising initiatives that are active to reflect the new requirements is a step that occurs after the CIO has understood the requirements and assessed their impact on the current IT-enabled business activities. Confirming there are adequate resources to mitigate compliance requirements is a step that occurs after the CIO has identified and prioritized theactions and tasks needed to achieve compliance. Consulting with the board for guidance on the new requirements is a step that occurs after the CIO has developed and proposed a feasible and effective compliance plan.

Integrating IT security policies into individual performance objectives is the best way to support the objective of driving a cultural shift to enhance compliance with IT security policies. This is because performance objectives are specific, measurable, achievable, relevant, and time-bound (SMART) goals that define what each employee is expected to accomplish and how they will be evaluated1. By integrating IT security policies into performance objectives, the enterprise can:

Communicate the importance and value of IT security policies to each employee2

Motivate and incentivize employees to comply with IT security policies2

Monitor and measure employees’ compliance with IT security policies2

Provide feedback and recognition to employees who comply with IT security policies2

Identify and address any gaps or issues in employees’ compliance with IT security policies2

Integrating IT security policies into performance objectives can help to create a culture of accountability, responsibility, and awareness for IT security within the enterprise. It can also help to align the individual goals of employees with the organizational goals of IT governance.

The other options, communicating IT security policies on a regular basis, acknowledging and signing IT security policies by each employee, and centrally posting IT security policies with detailed instructions are not as effective as integrating IT security policies into performance objectives for supporting the objective of driving a cultural shift to enhance compliance with IT security policies. They are more related to the dissemination and implementation of IT security policies, rather than their integration and evaluation. They may not have a significant impact on the behavior and attitude of employees towards IT security policies, as they may not provide sufficient motivation, feedback, or recognition for compliance. They may also be perceived as passive, formal, or coercive methods of enforcing IT security policies, rather than active, informal, or collaborative methods of engaging employees in IT security policies. References := Performance Objectives - SMART Goals - BusinessBalls, How toIntegrate Security Into Employee Performance Objectives, IT Security Policy: Key Components & Best Practices for Every Business …

An effective information governance model is best indicated when senior management ensures that quality goals are defined for information. This top-down approach demonstrates a commitment to managing information as a strategic asset, with clear quality objectives that align with business goals. It ensures accountability and sets the tone for information governance practices across the organization. While the roles of the CIO, enterprise architects, and process owners are important, the involvement of senior management in defining quality goals is a key indicator of an effective governance model.

Standardization is the process of establishing and applying common rules, formats, definitions, and methods for data collection, storage, processing, and exchange. Standardization is critical for enabling data interoperability, which is the ability of data to be shared and used across different systems, platforms, applications, and organizations. Standardization can help improve data interoperability by:

Enhancing the quality, consistency, and accuracy of data

Reducing the complexity and ambiguity of data

Increasing the compatibility and comparability of data

Facilitating the integration and analysis of data

Promoting the reuse and sharing of data

The best way to minimize intellectual property theft and sensitive information loss in IoT acquisitions is to integrate supply chain cyber risk management processes. This holistic approachincludes assessing supplier security posture, monitoring for threats, and ensuring cybersecurity is embedded into procurement, delivery, and operations.

NDAs, sanctions, and data classification are supportive, but only supply chain risk management addresses the full lifecycle risks and modern threats in globally sourced IoT ecosystems.

The primary reason to monitor data classification efforts is to identify deviations in the data that are outside risk thresholds. This is because data classification is a process of organizing and labeling data according to its type, sensitivity, and value to the organization1. Data classification helps to ensure that data is protected and handled appropriately according to its risk level and compliance requirements1. By monitoring data classification efforts, the organization can:

Detect and prevent any unauthorized access, modification, or disclosure of sensitive or confidential data2

Identify and mitigate any potential threats or vulnerabilities that could affect the availability, integrity, or quality of data2

Evaluate and improve the effectiveness and efficiency of data classification policies, procedures, and tools2

Ensure alignment and consistency of data classification across different systems, applications, and processes2

Report and communicate the status and results of data classification to relevant stakeholders2

Monitoring data classification efforts can help the organization to manage and reduce the risks associated with data and to comply with relevant industry-specific regulatory mandates such as SOX, HIPAA, PCI DSS, and GDPR1.

References := Data Classification: Overview and Best Practices | Ground Labs, What Is Data Classification? The 5 Step Process & Best Practices for Classifying Data | Splunk

Comprehensive and Detailed Explanation:

The CGEIT Review Manual 8th Edition, in its Benefits Realization domain, emphasizes ensuring that IT investments deliver maximum value aligned with business objectives. An IT value delivery framework is a structured approach to managing IT initiatives to ensure they create, sustain, and optimize value for the enterprise. This involves defining value metrics, aligning IT projects with strategic goals, and monitoring outcomes throughout the project lifecycle.

Option D: Optimize value to the enterprise is the primary purpose of an IT value delivery framework. The framework ensures that IT investments are prioritized, executed, and evaluated to maximize benefits (e.g., revenue growth, cost savings, operational efficiency) while minimizing risks and costs. For example, it might use value management techniques (e.g., cost-benefit analysis, ROI tracking) to ensure IT projects deliver measurable outcomes aligned with enterprise goals. The manual likely references COBIT 2019’s APO05-Managed Portfolio, which focuses on optimizing the value of IT investments.

Option A: Improve value of successful IT projects is too narrow, as the framework aims to optimize value across all IT initiatives, not just successful ones.

Option B: Increase transparency of value to the enterprise is a secondary benefit. While transparency (e.g., through reporting) is important, the primary goal is value optimization.

Option C: Assist top management in approving IT projects is a governance function, not the primary focus of value delivery, which occurs post-approval during execution and evaluation.

Double Verification: The answer aligns with COBIT’s APO05 and the CGEIT domain’s focus on benefits realization. The term “optimize value” is consistent with ISACA’s emphasis on maximizing stakeholder value in GEIT.

ISACA CGEIT Review Manual 8th Edition, Domain 3: Benefits Realization (focus on value management).

COBIT 2019, APO05-Managed Portfolio.

ISACA Glossary (for definitions of value delivery), available at https://www.isaca.org/resources/glossary.

Concerns about unethical behavior, such as stealing confidential information, should be reported through established ethical reporting mechanisms to ensure impartiality and compliance with governance policies. The CGEIT Review Manual 8th Edition advises using ethics hotlines or similar channels to handle allegations of misconduct.

Extract from CGEIT Review Manual 8th Edition (Domain 1: Governance of Enterprise IT):"Allegations of unethical behavior, including the misuse of confidential information, should be reported through the enterprise’s ethics hotline or designated reporting channel. This ensures that concerns are handled impartially, in accordance with governance policies, and with appropriate escalation to senior management or the board." (Approximate reference: Domain 1, Section on Ethical Governance)

Reporting the concern to the ethics hotline (option B) is the best course of action, as it follows governance protocols, protects the IT director from retaliation, and ensures an independent investigation.

Why not the other options?

A. File a report with the local law enforcement agency: Involving law enforcement is premature without evidence and bypasses internal governance processes.

C. Discuss the concern with the chair directly: Confronting the chair risks escalation and lacks impartiality, potentially compromising the investigation.

D. Conduct an investigation to substantiate the chair’s activities: The IT director should not conduct an investigation personally, as this could compromise objectivity and governance protocols.

Outsourcing decisions require a clear understanding of the financial and operational implications. The CGEIT Review Manual 8th Edition advises that conducting a cost-benefit analysis is the first step to evaluate whether outsourcing non-core IT processes aligns with enterprise objectives.

Extract from CGEIT Review Manual 8th Edition (Domain 5: Benefits Realization):"Before outsourcing IT processes, the enterprise should conduct a cost-benefit analysis to assess the financial, operational, and strategic implications. This analysis determines whether outsourcing delivers value and supports business objectives." (Approximate reference: Domain 5, Section on Outsourcing Decisions)

Conducting a cost-benefit analysis for outsourcing (option D) provides the data needed to make an informed decision, comparing costs, risks, and benefits of outsourcing versus in-house management.

Why not the other options?

A. Update resource allocation policies: Policy updates follow the decision to outsource, based on the analysis.

B. Issue a formal request for proposal (RFP) to outsourcing vendors: Issuing an RFP is premature without confirming that outsourcing is viable.

C. Establish service-level metrics for outsourced activities: Metrics are defined after deciding to outsource and selecting a vendor.

Developing an IT risk management framework begins with aligning it to the enterprise risk management (ERM) framework. This ensures consistency across all organizational risk domains and supports the integration of IT risk into the broader enterprise risk strategy. The ERM provides a foundation for identifying, assessing, and managing IT risks in a way that aligns with the organization's overall objectives. Promoting a culture of risk awareness, while critical, is a subsequent step once the framework is defined. References: COBIT 2019 Risk Management Process, CGEIT Exam Manual.

A third-party audit report is the most comprehensive source of information regarding the current status and effectiveness of a cloud provider’s controls. A third-party audit report is an independent and objective assessment of the cloud provider’s security, compliance, and performance by a qualified and reputable auditor. A third-party audit report can provide assurance to the cloud customers that the cloud provider has implemented adequate and effectivecontrols to meet the industry standards and best practices, as well as the contractual obligations and customer expectations12.

A globally recognized certification is a credential that demonstrates that a cloud provider has met certain criteria or standards for security, quality, or performance. A globally recognized certification can provide some level of confidence to the cloud customers that the cloud provider has achieved a minimum level of compliance or competence, but it may not provide enough details or evidence about the current status and effectiveness of the cloud provider’s controls3.

A control self-assessment (CSA) is a process that enables a cloud provider to evaluate its own controls internally, without involving an external auditor. A CSA can help a cloud provider to identify and address any gaps or weaknesses in its controls, as well as to monitor and improve its performance. However, a CSA may not provide sufficient assurance to the cloud customers, as it may lack objectivity, transparency, and validity4.

A maturity assessment is a process that measures the level of maturity or capability of a cloud provider’s processes or practices. A maturity assessment can help a cloud provider to benchmark its performance against industry standards or best practices, as well as to identify areas for improvement or innovation. However, a maturity assessment may not provide enough information about the current status and effectiveness of the cloud provider’s controls, as it may focus more on the process rather than the outcome5.

Ensuring that IT policies are aligned with organizational strategies is best achieved when the policies are developed using a top-down approach. This approach starts with strategic objectives and cascades down to operational policies, ensuring coherence and alignment with the overall direction and goals of the organization. While board approval, annual updates, and periodic audits are important for policy governance, the top-down development approach ensures that policies are inherently designed to support organizational strategies from the outset.

The best way to address the risk associated with new IT investments is to integrate security requirements at the beginning of projects. This means that security is considered as a key factor in the planning, design, development and testing phases of IT projects. By doing so, organizations can ensure that security is built into the IT solutions, rather than added as an afterthought. This can help to prevent or reduce security vulnerabilities, breaches, incidents and costs. Integrating security requirements at the beginning of projects is also consistent with the IT risk management frameworks that recommend a proactive and preventive approach to IT risk management12. References := Proactive IT Risk Management in an Era of Emerging Technologies, IT Risk Management Process & Frameworks

Effective culture change is the process of transforming the values, beliefs, behaviors, and norms of the organization and its stakeholders to support the strategic alignment of business and IT goals. Effective culture change can enable the implementation of IT governance by:

Creating a shared vision and understanding of the purpose, benefits, and expectations of IT governance

Engaging and empowering the stakeholders to participate and collaborate in IT governance activities and decisions

Fostering a culture of trust, transparency, accountability, and responsibility for IT governance outcomes

Encouraging a culture of innovation, learning, and improvement for IT governance processes and practices

Aligning the incentives and rewards with the IT governance objectives and performance

A product life cycle is the length of time from a product first being introduced to consumers until it is removed from the market. It consists of four or five stages, depending on the source: introduction, growth, maturity, decline, and sometimes development1. A product life cycle information can help the enterprise to estimate the ongoing maintenance costs of IT-enabled business investments, as well as their expected benefits, risks, and returns. By requiring business cases to have product life cycle information, the enterprise can prioritize IT-enabled business investments based on their long-term value and alignment with the enterprise’s objectives2.

A balanced scorecard is a management system that clarifies the strategy and vision of an organization, translating them into action that can be tracked. It uses four perspectives: financial, customer, internal business process, and knowledge, education, and growth3. A balanced scorecard for the IT project portfolio can help the enterprise to measure the performance and value of IT projects, but it does not necessarily consider the ongoing maintenance costs of IT-enabled business investments.

A portfolio manager is a specialized project manager who focuses on IT projects. They are responsible for keeping projects within budget, optimizing time management for IT teams, and allocating resources appropriately4. Establishing a portfolio manager role to monitor and control the IT projects can help the enterprise to manage its IT project portfolio more effectively, but it does not address the issue of prioritizing IT-enabled business investments based on their ongoing maintenance costs.

An enterprise architecture (EA) is a conceptual blueprint that defines the structure and operation of an organization. It describes the current and future state of the organization in terms of its strategy, processes, information systems, and technology infrastructure5. Mandating an EA review with business stakeholders can help the enterprise to align its IT-enabled business investments with its strategic goals and ensure compliance with defined security rules, but it does not solve the problem of considering the ongoing maintenance costs of IT-enabled business investments.