Free Isaca CRISC Practice Exam with Questions & Answers | Set: 5

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.

Policies and standards are important components of the risk management process, as they define the objectives, expectations, and requirements for managing risk within the organization. Policies and standards are also the means by which senior management formally approves and communicates the risk practices to the stakeholders, ensuring that the risk management process is aligned with the organizational strategy, culture, and values. Policies and standards also provide the authority and accountability for the risk management roles and responsibilities, as well as the criteria and metrics for measuring and reporting risk performance.

 The control environment is the set of standards, processes, and structures that provide the basis for carrying out internal control across the organization. The control environment is most effective when the controls perform as intended, meaning that they achieve their objectives, mitigate the risks, and comply with the policies and regulations. The other options are desirable attributes of the controls, but they do not necessarily indicate the effectiveness of the control environment. References = Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Assessment, Section 2.3: IT Control Assessment, page 69.

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

The risk manager’s best course of action when discovering significant vulnerabilities in a commercial off-the-shelf software product is to review the risk of implementing versus postponing with stakeholders. This means that the risk manager should assess the potential impact and likelihood of the vulnerabilities being exploited, as well as the benefits and costs of using the software product. The risk manager should also consult with the relevant stakeholders, such as the business owners, the IT department, the security team, and the vendor, to understand their perspectives, expectations, and requirements. Based on this analysis, the risk manager should decide whether to proceed with the implementation, delay it until the next release,or look for alternative solutions. The risk manager should also document and communicate the decision and the rationale behind it, and monitor the situation for any changes or new developments.

The other options are not the best course of action, because:

Running vulnerability testing tools to independently verify the vulnerabilities is a useful step to confirm the existence and severity of the vulnerabilities, but it is not sufficient to address the risk. The risk manager still needs to evaluate the trade-offs between implementing and postponing the software product, and involve the stakeholders in the decision-making process.

Reviewing the software license to determine the vendor’s responsibility regarding vulnerabilities is an important step to understand the contractual obligations and liabilities of the vendor, but it is not enough to mitigate the risk. The risk manager still needs to consider the impact and likelihood of the vulnerabilities, and the benefits and costs of the software product, and consult with the stakeholders to decide the best course of action.

Requiring the vendor to correct significant vulnerabilities prior to installation is an unrealistic and impractical option, as the vendor has already stated that the vulnerabilities will not be corrected until the next release. The risk manager cannot force the vendor to change their schedule or priorities, and may risk damaging the relationship with the vendor. The risk manager should instead work with the vendor to understand the nature and scope of the vulnerabilities, and the expected timeline and features of the next release, and use this information to inform the risk assessment and decision-making process.

To help identify high-risk situations, an organization should continuously monitor the environment, as it can help to detect and respond to any changes or emerging risks that may affect the organization’s objectives and strategy. Continuous monitoring can also provide timely and relevant feedback and information to the decision-makers and stakeholders, and enable them to adjust the risk strategy and response actions accordingly. Continuous monitoring can also help to ensure that the risk management process is aligned with the organization’s risk appetite andtolerance, and supports the achievement of the organization’s goals and value creation. References = ISACA Certified in Risk and Information Systems Control (CRISC)Certification Exam Question and Answers, Question 243. CRISC: Certified in Risk & Information Systems Control Sample Questions, Question 243. CRISC Sample Questions 2024, Question 243.

Granting remote access to a system containing sensitive data to an overseas third party poses various risks to the organization, such as data breaches, unauthorized access, data loss, compliance violations, or reputational damage. The greatest concern to management when granting remote access to a third party is the lack of monitoring over vendor activities, meaning that the organization may not be able to control or verify how the third party is accessing, using, storing, or transferring the sensitive data. The lack of monitoring over vendor activities can increase the risk exposure and uncertainty of the organization, as well as reduce the accountability and transparency of the third party. Therefore, the organization should implement appropriate measures to monitor and audit the vendor activities, such as logging, reporting, reviewing, or testing, and to ensure that the vendor complies with the contractual obligations and the security policies and standards of the organization. References = Risk and Information Systems Control Study Manual, Chapter 5, Section 5.3.2.1, p. 243-244

 The production environment is the environment where the application is deployed and used by the end users. The production environment should be protected from unauthorized or unintended changes that could compromise the availability, integrity, or confidentiality of the application and its data. Developers have access to the production environment presents the greatest risk to an application, as it could allow them tobypass the change management process, introduce errors or vulnerabilities, or manipulate the application or its data for malicious purposes. The other options are not as risky as developers having access to the production environment, as they involve different aspects of the application lifecycle:

Application controls are manual means that the application relies on human intervention to perform some functions or validations, such as data entry, reconciliation, or authorization. This could increase the risk of human error, fraud, or inefficiency, but it does not directly affect the production environment.

Application development is outsourced means that the application is developed by a third party, such as a vendor or a contractor. This could increase the risk of quality issues, contractual disputes, or intellectual property rights, but it does not directly affect the production environment.

Source code is escrowed means that the source code of the application is deposited with a trusted third party, such as a lawyer or a bank. This could provide assurance and continuity in case the original developer is unable or unwilling to maintain or support the application, but it does not directly affect the production environment. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 4, Section 4.1.1.1, pp. 144-145.

A penetration test is a simulated cyberattack on a web infrastructure to evaluate its security posture and identify any vulnerabilities or weaknesses that could be exploited by an attacker. A penetration test is the best indicator of how well a web infrastructure protects critical information from an attacker, as it mimics the real-world scenarios and techniques that an attacker would use, and measures the effectiveness of the existing security controls and countermeasures. A penetration test can also provide recommendations for improving the security of the web infrastructure and reducing the risk exposure. References = ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, Question 236. CRISC by Isaca Actual Free Exam Q&As, Question 9. CRISC: Certified in Risk & Information Systems Control Sample Questions, Question 236. Most Asked CRISC Exam Questions and Answers, Question 10.

Fraudulent transactions are those that involve deception, manipulation, or misrepresentation of information or data to obtain an unauthorized or improper benefit or advantage1. Fraudulenttransactions can pose significant risks and losses for an organization, such as financial damages, legal liabilities, reputational damages, or operational disruptions2.

Enterprise resource planning (ERP) systems are integrated software applications that support the core business processes and functions of an organization, such as accounting, finance, human resources, supply chain, inventory, or customer relationship management3. ERP systems can facilitate the efficiency, accuracy, and security of business transactions, but they can also be vulnerable to fraudulent transactions, such as:

Creating fake vendors or customers and processing false invoices or payments

Manipulating or falsifying financial or accounting data or reports

Changing or deleting critical or sensitive information or records

Abusing or misusing access privileges or credentials

Bypassing or compromising the system controls or security measures4

The design of procedures to prevent fraudulent transactions within an ERP system should be based on the control environment. The control environment is the set of standards, processes, and structures that provide the basis for carrying out internal control across the organization. The control environment comprises the following elements:

The tone at the top, which reflects the leadership’s commitment and attitude towards internal control and ethical conduct

The organizational structure, which defines the roles and responsibilities, reporting lines, and authority levels for internal control

The human resource policies and practices, which ensure that the staff have the appropriate skills, competencies, and incentives for internal control

The risk assessment process, which identifies and evaluates the potential risks and threats to the organization’s objectives and transactions

The control activities, which are the specific policies, procedures, and mechanisms that prevent, detect, or correct errors or fraud in transactions

The information and communication systems, which provide reliable and timely data and information for internal control and decision-making

The monitoring and evaluation activities, which measure and report the performance and effectiveness of internal control and ensure continuous improvement

By basing the design of procedures to prevent fraudulent transactions within an ERP system on the control environment, the organization can:

Ensure that the procedures are aligned with the organization’s objectives, values, and expectations regarding internal control and fraud prevention

Provide clear and consistent guidance and instructions for the staff and stakeholders involved in the transactions and the ERP system

Implement adequate and appropriate controls and safeguards to mitigate the risks and vulnerabilities of the transactions and the ERP system

Monitor and evaluate the compliance and effectiveness of the procedures and the ERP system, and identify and address any issues or gaps

References = What is Fraud?, Fraud Risk Management - AICPA, What is ERP?, ERP Fraud: How to Prevent It - ERP Focus, [COSO – Control Environment - Deloitte], [How to use COSO to assess IT controls - Journal of Accountancy]

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

 An exception to the information security policy is a permission to continue operating a system, service, or product that cannot comply with the established information security standards and requirements1. A risk owner is a person or entity that has the authority and accountability for a risk and its management2. A risk practitioner is a person or entity that has the knowledge and skills to perform risk management activities3. A high number of exceptions to the information security policy indicates that there are many systems, services, or products that do not meet the expected level of security and pose potential risks to the organization. The risk practitioner’s greatest concern should be that the aggregate risk, which is the total amount of risk that the organization faces from all sources, is approaching the tolerance threshold, which is the limit beyond which the organization does not want to tolerate the risk4. If the aggregate risk isapproaching the tolerance threshold, it means that the organization is exposed to a high level of risk that may exceed its risk appetite, which is the amount of risk that the organization is willing to accept to achieve its objectives5. This may result in negative consequences for the organization, such as breaches, losses, damages, or reputational harm. Therefore, the risk practitioner should monitor and report the aggregate risk level and the tolerance threshold, and advise the risk owners and the management on the appropriate risk responses and actions to reduce the aggregate risk to an acceptable level. Security policies are being reviewed infrequently, controls are not operating efficiently, and vulnerabilities are not being mitigated are not the risk practitioner’s greatest concern, as they are not directly related to the aggregate risk level and the tolerance threshold. Security policies are being reviewed infrequently is a condition that indicates that the organization’s security policies are not updated or revised regularly to reflect the changes and updates in the security environment and the security requirements6. This may affect the relevance and effectiveness of the security policies, but it does not necessarilyincrease the aggregate risk level or the tolerance threshold. Controls are not operating efficiently is a condition thatindicates that the organization’s controls, which are the measures or actions taken to manage or mitigate the risks, are not performing well or optimally7. This may affect the quality and performance of the controls, but it does not necessarily increase the aggregate risk level or the tolerance threshold. Vulnerabilities are not being mitigated is a condition that indicates that the organization’s vulnerabilities, which are the weaknesses or gaps that may be exploited by the threats, are not being addressed or reduced8. This may increase the likelihood or impact of the risks, but it does not necessarily increase the aggregate risk level or the tolerance threshold. References = 1: IT/Information Security Exception Request Process2: [Risk Ownership - Risk Management] 3: [Risk Practitioner - ISACA] 4: Risk Threshold: Definition, Meaning & Example - PM Study Circle5: Risk Appetite vs Risk Tolerance vs Risk Threshold - projectcubicle6: [Security Policy Review and Update - SANS Institute] 7: [Control Effectiveness and Efficiency - ISACA] 8: [Vulnerability Management - ISACA] : [Risk andInformation Systems Control Study Manual, Chapter 1: IT Risk Identification, Section 1.1: IT Risk Concepts, pp. 17-19.] : [Risk and Information Systems Control Study Manual, Chapter 2: IT Risk Assessment, Section 2.1: Risk Identification, pp. 57-59.] : [Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.2: Risk Monitoring, pp. 189-191.] : [Risk and Information Systems Control Study Manual, Chapter 5: Information Systems Control Design and Implementation, Section 5.1: Control Design, pp. 233-235.] : [Risk and Information Systems Control Study Manual, Chapter 5: Information Systems Control Design and Implementation, Section 5.2: Control Implementation, pp. 243-245.] : [Risk and Information Systems Control Study Manual, Chapter 5: Information Systems Control Design and Implementation, Section 5.3: Control Monitoring and Maintenance, pp. 251-253.]

Risk scenarios should reflect probable events to ensure relevance and practicality in risk assessments. This guidance supports theRisk Identification and Scenario Developmentprocess.

The most significant benefit of using a consistent risk ranking methodology across an organization is that it enables a clear understanding of risk levels, as this facilitates the comparison and prioritization of risks, the communication and reporting of risks, and the alignment of risk management with the enterprise’s objectives and strategy. A consistent risk ranking methodology is a set of criteria and scales that are used to measure and rate the likelihood and impact of risks, as well as other factors such as urgency, velocity, and persistence. A consistent risk ranking methodology ensures that the risk assessment results are objective, reliable, and comparable across different business units, processes, and projects. The other options are not the most significant benefits of using a consistent risk ranking methodology,although they may be secondary benefits or outcomes of doing so. References = Risk and Information Systems Control Study Manual, Chapter 3: IT Risk Assessment, page 97.

According to the CRISC Review Manual1, peer reviews are the process of evaluating the quality and validity of risk analysis by independent experts or colleagues. Peer reviews are conducted to ensure that the risk analysis is consistent, objective, and reliable, and that it follows the established standards and methods. The primary reason for conducting peer reviews of risk analysis is to minimize subjectivity of assessments, as peer reviews can help to reduce personal biases, preferences, and assumptions that may affect the risk analysis outcomes. Peer reviews can also help to identify and correct any errors, gaps, or inconsistencies in the risk analysis, and to improve the risk analysis skills and knowledge of the reviewers and the reviewees. References = CRISC Review Manual1, page 209.

 The next step after determining that a key control does not meet design expectations is to document the finding in the risk register, because this helps to record and track the information about the identified risk, such as its description, likelihood, impact, response, and status. A key control is a control that addresses a significant risk or supports a critical business process or objective. A control design expectation is a criterion or requirement that defines how the control should operate or perform to achieve its objective. If a key control does not meet its design expectation, it means that there is a gap, weakness, or deficiency in the control that may compromise its effectiveness or efficiency, and increase the risk exposure or impact. By documenting the finding in the risk register, the risk practitioner can communicate and report the risk issue to the relevant stakeholders, such as the risk owner, the management, or the auditor, and initiate the appropriate risk response actions, such as modifying the design of the control, implementing a compensating control, or accepting the risk. The other options are not the best next steps after determining that a key control does not meet design expectations. Invoking the incident response plan is a reactive measure that is triggered when a risk event occurs or is imminent, and requires immediate action to contain, mitigate, or recover from the incident. However, in this case, the risk event has not occurred yet, and there may be time to prevent or reduce it by improving the control design. Re-evaluating key risk indicators is a monitoring activity that measures and evaluates the level and impact of risks, and provides timely signals that something may be going wrong or needs urgent attention. However, in this case, the risk practitioner has already identified the risk issue, and needs to document and address it, rather than re-evaluate it. Modifying the design of the control is a possible risk response action that may be taken to improve the control and reduce the risk, but it is not the next step after determining that the key control does not meet design expectations. The next step is to document the finding in the risk register, and then decide on the best risk response action, which may or may not be modifying the design of the control, depending on the cost-benefit analysis, the risk assessment, and the risk response strategy. References = Risk IT Framework, ISACA, 2022, p. 13

 Contractually obligating the supplier to follow privacy laws is the best way to mitigate the risk of violating privacy laws when transferring personal information to a supplier, because it ensures that the supplier is legally bound to comply with the applicable laws and regulations that protect the privacy and security of the personal information. This also creates a clear accountability andliability for the supplier in case of a privacy breach, and defines the rights and obligations of both parties in relation to the personal information. The other options are not the best ways to mitigate the risk of violating privacy laws, although they may also be helpful in reducing the likelihood or impact of a privacy breach. Encrypting the data while in transit to the supplier, requiring independent audits of the supplier’s control environment, and utilizing blockchain during the data transfer are examples of technical or assurance controls that aim to protect the confidentiality, integrity, and availability of the personal information, but they do not address the legal or contractual aspects of the privacy laws. References = CRISC: Certified in Risk & Information Systems Control Sample Questions

The primary reason to update a risk register with risk assessment results is to communicate the level and priority of assessed risk to management, as this enables them to make informed decisions about risk response and allocation of resources. The risk register is a tool for documenting and reporting the current status of risks, their causes, impacts, likelihood, and responses. Updating the risk register with risk assessment results ensures that the information is accurate, relevant, and timely. The risk register also helps to monitor and track the progress and effectiveness of risk management activities. The other options are not the primary reasons to update the risk register, although they may be secondary benefits or outcomes of doing so. References = Risk and Information Systems Control Study Manual, Chapter 3: IT Risk Assessment, page 109.

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.

The number of validated transactions is a critical indicator of a blockchain network's security. It reflects the network's ability to accurately and securely process transactions, ensuring data integrity and trustworthiness. A higher number of validated transactions indicates robust consensus mechanisms and effective security controls within the blockchain infrastructure.

Data confidentiality risk is the risk that the data may be accessed, disclosed, or modified by unauthorized parties, resulting in breaches of privacy, trust, or compliance1. Platform as a Service (PaaS) is a cloud computing model that provides a platform for developing, testing, and deploying applications, without requiring the users to manage the underlying infrastructure2. An internally developed payroll application is an application that is created and maintained by the organization itself, rather than by a third-party vendor, and that is used to process and manage the payroll data of the organization’s employees3. The owner of the data confidentiality risk is the person or entity that has the authority and accountability for the data and its protection, and that is responsible for identifying, assessing, and mitigating the risk. The owner of the data confidentiality risk related to an internally developed payroll application that leverages PaaS infrastructure from the cloud is the human resources head, as they are the person who oversees the human resources function and the payroll data of the organization. The human resources head has the best understanding of the sensitivity, value, and usage of the payroll data, and the potential impacts and implications of a data confidentiality breach. The human resources head also has the ability and responsibility to define and implement the policies, procedures, and controls that are necessary to protect the payroll data, and to monitor and report on the performance and compliance of the data confidentiality risk management. The IT infrastructure head, the supplier management head, and the application development head are not the best choices for owning the data confidentiality risk related to an internally developed payrollapplication that leverages PaaS infrastructure from the cloud, as they do not have the same level of authority and accountability as the human resources head. The IT infrastructure head is the person who oversees the IT infrastructure function and the PaaS infrastructure of the organization. The IT infrastructure head may be involved in providing input and feedback to the human resources head on the data confidentiality risk management, especially those related to the PaaS infrastructure, but they do not have the final say or the overall responsibility for the payroll data and its protection. The supplier management head is the person who oversees the supplier management function and the relationship with the cloud service provider that provides the PaaS infrastructure. The supplier management head may be involved in negotiating and enforcing the service level agreements and the security requirements with the cloud service provider, but they do not have the authority or the expertise to manage the data confidentiality risk of the payroll data. The application development head is the person who oversees the application development function and the development, testing, and deployment of the payroll application. The application development head may be involved in designing and implementing the security features and controls of the payroll application, but they do not have the perspective or the influence to manage the data confidentiality risk of the payroll data. References = 3: Payroll Software: What Is It & How Does It Work? | QuickBooks2: What is Platform as a Service (PaaS)? | IBM1: Data Confidentiality: Identifyingand Protecting Assets Against Data … : [Risk Ownership - Risk Management] : [Human Resources and Payroll Security Policy - University of …] : [Risk and Information Systems Control Study Manual, Chapter 1: IT Risk Identification, Section 1.1: IT Risk Concepts, pp. 17-19.] : [Risk andInformation Systems Control Study Manual, Chapter 2: IT Risk Assessment, Section 2.1: Risk Identification, pp. 57-59.] : [Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.2: Risk Monitoring, pp. 189-191.] : [Risk and Information Systems Control Study Manual, Chapter 5: Information Systems Control Design and Implementation, Section 5.1: Control Design, pp. 233-235.] : [Risk and Information Systems Control Study Manual, Chapter 5: Information Systems Control Design and Implementation, Section 5.2: Control Implementation, pp. 243-245.] : [Risk and Information Systems Control Study Manual, Chapter 5: Information Systems Control Design and Implementation, Section 5.3: Control Monitoring and Maintenance, pp. 251-253.]

When prioritizing IT risks, scenarios with thehighest impact on business objectivesshould be the primary focus. ISACA’s CRISC guidance notes that risks should be prioritized by considering both their likelihood and their potential impact on organizational goals. This ensures resources and attention are focused on the most significant threats.

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

The primary responsibility of senior management in risk management is to prioritize the risk scenarios based on severity. Risk scenarios are hypothetical events or situations that could affect the achievement of the objectives. Risk severity is a measure of the overall level of risk, based on the combination of the probability and impact of the risk scenario. Prioritizing the risk scenarios based on severity is the primary responsibility of senior management, because it helps to allocate the resources and actions to the most critical and urgent risks, and to align the risk management process with the organizational strategy and risk appetite. Senior management also has the authority and accountability to make the final decisions and approve the risk response plans for the prioritized risks. The other options are not the primary responsibility of senior management, although they may be involved or consulted in these activities. Bottom-up identification of emerging risks is a process of identifying and reporting the new or changing risks that may arise from the operational or tactical level of the organization. This is usually the responsibility of the risk owners or the risk practitioners, who have the knowledge and experience of the specific functions and processes. Categorization of risk scenarios against a standard taxonomy is a process of classifying and organizing the risk scenarios into predefined categories or groups, based on their nature, source, or impact. This is usually the responsibility of the risk analysts or the risk coordinators, who have the skills and tools to perform the risk analysis and assessment. Review of external loss data is a process of collecting and analyzing the data and information on the losses or incidents that occurred in other organizations or industries, due to similar or related risks. This is usually the responsibility of the risk researchers or the risk consultants, who have the access and expertise to obtain and interpret the external data and information. References = The Role of Executive Management in ERM - Corporate Compliance Insights, Guidelines on Risk Management Practices – Board and Senior Management, Risk Manager Job Description [+2023 TEMPLATE] - Workable

The primary focus of a risk practitioner when validating a risk response action plan should be that the risk response reduces risk to an acceptable level. A risk response action plan is a document that describes the actions or measures that are taken or planned to modify the risk, such as reducing, avoiding, transferring, or accepting the risk1. Validating a risk response action plan means verifying whether the plan is feasible, effective, and efficient in addressing the risk2. The main objective of validating a risk response action plan is to ensure that the risk response reduces risk to an acceptable level, which is the level of risk that the organization is willing to tolerate or bear, based on its risk appetite and risk criteria3. Reducing risk to an acceptable level means that the risk response actions can lower the likelihood or impact of the risk to a point where the risk does not pose a significant threat or challenge to the organization’s objectives, operations, or performance. Reducing risk to an acceptable level also means that the risk response actions can balance the benefits and costs of the risk response, and that they can provide a reasonable assurance of the risk management effectiveness and efficiency4. The other options are not the primary focus of a risk practitioner when validating a risk response action plan, as they are either less relevant or less specific than reducing risk to an acceptable level. Quantifying risk impact is a component or element of validating a risk response action plan, notafocus of it. Quantifying risk impact means measuring or estimating the potential effects or consequences of the risk on the organization5. Quantifying risk impact can help to evaluate the severity and priority of the risk, as well as to compare the risk against the risk criteria and the risk appetite. However, quantifying risk impact is not the primary focus of a risk practitioner when validating a risk response action plan, as it does not address the feasibility, effectiveness, or efficiency of the risk response actions, or the level of risk reduction that they can achieve. Aligning with business strategy is a secondary or incidental benefit of validating a risk response action plan, not a primary or essential focus of it. Aligning with business strategy means ensuring that the risk response actions are consistent and coherent with the organization’s goals and values6. Aligning with business strategy can help to integrate the risk response actions with the organization’s culture and governance, as well as to support and enable the achievement of the organization’s mission and vision. However, aligning with business strategy is not the main focus of a risk practitioner when validating a risk response action plan, as it does not indicate the feasibility, effectiveness, or efficiency of the risk response actions, or the level of risk reduction that they can achieve. Advancing business objectives is a tertiary or indirect outcome of validating a risk response action plan, not a primary or direct focus of it. Advancing business objectives means contributing to the improvement and enhancement of the organization’s performance and results7. Advancing business objectives can help to create value and deliver benefits for the organization and its stakeholders, as well as to optimize the use of the organization’s resources and capabilities. However, advancing business objectives is not the main focus of a risk practitioner when validating a risk response action plan, as it does not address the feasibility, effectiveness, or efficiency of the risk response actions, or the level of risk reduction that they can achieve. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 2, Section 2.1.8, Page 61.

Key control indicators (KCIs) are metrics that measure the performance of a control in reducing the causes, consequences, or likelihood of a risk. They help to evaluate the adequacy and efficiency of the internal control environment, which is the set of policies, procedures, and practices that support the achievement of organizational objectives and the management of risks. By monitoring KCIs, organizations can identify and address any gaps or weaknesses in their internal controls and ensure that they are operating as intended.

References

•ISACA CRISC Review Manual, 7th Edition, Domain 3: Risk Response, Section 3.2.2: Control Design and Implementation

•KRI Framework for Operational Risk Management | Workiva

•What is the difference between key risk indicators and key control indicators?

The primary reason for sharing risk assessment reports with senior stakeholders is to support decision-making for risk response. Risk assessment reports are documents that summarize the results of the risk assessment process, such as the risk sources, causes, impacts, likelihood, and levels. Risk assessment reports also provide recommendations for risk response options, such as avoiding, reducing, transferring, or accepting the risk. Sharing risk assessment reports with senior stakeholders helps to inform them of the current risk situation, and to solicit their input, feedback, or approval for the risk response actions. The other options are not the primary reason for sharing risk assessment reports, although they may be secondary reasons or outcomes. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.2.1, page 4-13.

The most appropriate time for changes to be promoted to production is after they are approved by the business owner, who is the individual or group that is accountable and responsible for the business objectives and requirements that are supported or affected by the changes. The approval by the business owner ensures that the changes are aligned and compatible with the business objectives and requirements, and that they provide the expected or desired outcomes or benefits for the business.

The other options are not the most appropriate times for changes to be promoted to production, because they do not ensure that the changes are aligned and compatible with the businessobjectives and requirements, and that they provide the expected or desired outcomes or benefits for the business.

Communicating the changes to business management means informing or reporting the changes to the senior management or executives that oversee or direct the business activities or functions. Communicating the changes to business management is important for ensuring the awareness and support of the business management, but it is not the most appropriate time for changes to be promoted to production, because it does not indicatewhether the changes are approved or authorized by the business owner, who is accountable and responsible for the business objectives and requirements.

Testing the changes by business owners means verifying and validating the functionality and usability of the changes, using the input and feedback from the business owners. Testing the changes by business owners is important for ensuring the quality and performance of the changes, but it is not the most appropriate time for changes to be promoted to production, because it does not indicate whether the changes are approved or authorized by the business owner, who is accountable and responsible for the business objectives and requirements.

Initiating the changes by business users means requesting or proposing the changes by the end users or customers that interact with the information systems and resources that are affected by the changes. Initiating the changes by business users is important for ensuring the relevance and appropriateness of the changes, but it is not the most appropriate time for changes to be promoted to production, because it does not indicate whether the changes are approved or authorized by the business owner, who is accountable and responsible for the business objectives and requirements. References =

ISACA, CRISC Review Manual, 7th Edition, 2022, pp. 40-41, 47-48, 54-55, 58-59, 62-63

ISACA, CRISC Review Questions, Answers & Explanations Database, 2022, QID 194

CRISC Practice Quiz and Exam Prep

This KPI measures how well the server patch management process meets the agreed-upon standards and expectations for timeliness, quality, and security. It reflects the efficiency and effectiveness of the patch deployment and the compliance with the patch policy. It also helps to identify and address any issues or delays that may affect the patching performance.

References

•Patch Management KPI Metrics - Motadata

•KPI Examples for Patch and Vulnerability Management - Heimdal Security

•Measuring the Effectiveness of Your Patch Management Strategy - Automox

A data loss prevention (DLP) control is a technology that tries to detect and stop sensitive data breaches, or data leakage incidents, in an organization. A DLP control is used to prevent sensitive data, such as credit card numbers, from being disclosed to an unauthorized person, whether it is deliberate or accidental1. The best way to help ensure the effectiveness of a DLP control that has been implemented to prevent the loss of credit card data is to test the transmission of credit card numbers. This is a technique to verify that the DLP control can successfully identify and block the credit card data when it is sent or received through various channels, such as email, messaging, or file transfers. Testing the transmission of credit card numbers can help to evaluate the accuracy and reliability of the DLP control, as well as to identify and correct any false positives or false negatives. The other options are not the best ways to help ensure the effectiveness of a DLP control that has been implemented to prevent the loss of credit card data, although they may be helpful and complementary. Reviewing logs forunauthorized data transfers is a technique to monitor and analyze the DLP control activities and incidents, such as who, what, when, where, and how the data was transferred. However, reviewing logs is a reactive and passive approach, while testing the transmission is a proactive and active approach. Configuring the DLP control to block credit card numbers is a technique to set up the DLP control rules and policies, such as defining the data patterns, the detection methods, and the response actions. However, configuring the DLP control is a prerequisite and a preparation step, while testing the transmission is a validation and a verification step. Testing the DLP rule change control process is a technique to ensure that the DLP control rules and policies are updated and maintained in a controlled and coordinated manner, such as obtaining approval, documenting the changes, testing the changes, and communicating the changes. However, testing the DLP rule change control process is a quality and governance step, while testing the transmission is a performance and functionality step. References = What is Data Loss Prevention (DLP)? | Digital Guardian1; CRISC Review Manual, pages 164-1652; CRISC Review Questions, Answers & Explanations Manual, page 833

The most important factor to have in place to ensure the effectiveness of risk and security metrics reporting is an organizational reporting process. An organizational reporting process is a set of procedures that defines the roles, responsibilities, frequency, format, and distribution of the risk and security metrics reports. An organizational reporting process helps to ensure that the risk and security metrics are relevant, accurate, consistent, and timely, and that they provide useful information for decision making and performance improvement. An organizational reporting process also helps to align the risk and security metrics reporting with the enterprise’s objectives, strategies, and policies, and to communicate the risk and security status and issues to the appropriate stakeholders. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 5, Section 5.3.2, page 2421

As part of business continuity planning, the most important thing to include in a business impact analysis (BIA) is an industry standard framework. A BIA is a process of identifying and analyzing the potential effects of disruptions to the critical business functions and processes. An industry standard framework is a set of best practices, guidelines, and methodologies that provide a consistent and comprehensive approach to conducting a BIA. An industry standard framework can help to ensure that the BIA is complete, accurate, and reliable, and that it covers all the relevant aspects, such as the scope, objectives, criteria, methods, data sources, and reporting. An industry standard framework can also help to benchmark the BIA results against the industry norms and expectations, and to align the BIA with the business continuity strategy and plan. The other options are not as important as an industry standard framework, as they are related to the specific steps, activities, or outputs of the BIA, not the overall structure and quality of the BIA. References = Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.4: Key Control Indicators, page 211.

 The most essential content to include in an IT risk awareness program is how to comply with the organization’s IT risk and information security policies. This will help to ensure that the staff members are aware of their roles and responsibilities, and that they follow the best practices andstandards to protect the organization’s information assets and systems. Compliance with the IT risk and information security policies also helps to reduce the likelihood and impact of IT-related incidents and breaches, and to align the IT activities with the organization’s objectives and strategies. Populating risk register entries, prioritizing IT-related actions, and defining the IT risk framework are important aspects of IT risk management, but they are not the most essential content to include in an IT risk awareness program. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 5, Section 5.1.1.2, page 2291

1: ISACA Certified in Risk and Information Systems Control (CRISC®) Exam Guide, Answer to Question 646.

A security policy exception is a deviation from the established security policy that is granted to an individual or a group for a specific purpose or period of time. A security policy exception may be necessary when the security policy is too restrictive, outdated, or incompatible with the business requirements or objectives. However, a security policy exception also introduces a risk to the organization, as it may weaken the security posture, expose the organization to threats orvulnerabilities, or violate the compliance or regulatory obligations. Therefore, an upward trend in the number of security policy exceptions approved should be of most concern, as it indicates that the security policy is not effective or aligned with the organization’s needs and goals, and that the organization is accepting more risk than desired. The other options are not as concerning as the number of security policy exceptions approved, because they do not imply a direct or immediate risk to the organization, but rather reflect the normal or expected activities of the security management process, as explained below:

A. Number of business change management requests is a metric that measures the volume and frequency of the requests to modify the business processes, systems, or functions. An upward trend in this metric may indicate that the organization is undergoing a transformation, innovation, or improvement, which may have positive or negative impacts on the organization’s performance and security. However, this metric does not necessarily imply a risk to the organization, as the change management requests may be properly assessed, approved, and implemented, following the established change management procedures and controls.

B. Number of revisions to security policy is a metric that measures the amount and extent of the changes made to the security policy over time. An upward trend in this metric may indicate that the security policy is being updated, refined, or enhanced, which may improve or maintain the security posture and compliance of the organization. However, this metric does not necessarily imply a risk to the organization, as the revisions to the security policy may be based on the best practices, standards, and expectations for security management, and may be communicated and enforced effectively across the organization.

D. Number of changes to firewall rules is a metric that measures the number and type of the modifications made to the firewall configuration, which controls the incoming and outgoing network traffic based on predefined rules. An upward trend in this metric may indicate that the firewall is being adjusted, optimized, or customized, which may increase or decrease the firewall performance and security. However, this metric does not necessarily imply a risk to the organization, as the changes to the firewall rules may be justified, authorized, and validated,following the established firewall management procedures and controls. References = Risk and Information Systems Control Study Manual, Chapter 4, Section 4.2.1, page 115. Security Policy Exceptions: What Are They and How to Manage Them, Security Policy Exceptions: How to Handle Them in a Secure Manner, Security Policy Exceptions: A Necessary Evil?

 A role-based user access model is a type of technology control that assigns access rights and permissions to users based on their roles and responsibilities within the organization. A role-based user access model can reduce the likelihood of fraudulent payments committed internally, because it can help to:

Enforce the principle of least privilege, which means that users only have the minimum level of access required to perform their duties

Implement segregation of duties, which means that users cannot perform conflicting or incompatible functions, such as initiating and approving payments

Prevent unauthorized or inappropriate access to sensitive data or systems, such as payment information or applications

Detect and deter fraud attempts by creating audit trails and logs of user activities and transactions

Simplify and streamline the management and maintenance of user access rights and permissions, such as adding, modifying, or deleting users or roles12

The other options are not as important as a role-based user access model for reducing the likelihood of fraudulent payments committed internally. Automated access revocation is a technology control that automatically revokes or suspends user access rights and permissions when certain conditions are met, such as termination of employment, change of role, or expiration of password. Automated access revocation can help to prevent fraud by former or inactive users, but it does not address the risk of fraud by current oractive users3. Daily transaction reconciliation is a technology control that compares and verifies the transactions recorded in different systems or sources, such as bank statements and accounting records. Daily transaction reconciliation can help to detect fraud by identifying discrepancies or anomalies in the transactions, but it does not prevent fraud from occurring in the first place4. Rule-based data analytics is a technology control that applies predefined rules or criteria to analyze data and identify patterns, trends, or outliers. Rule-based data analytics can help to monitor fraud by generating alerts or reports of suspicious or unusual transactions, but it does not prevent fraud from happening or being attempted5. References =

Role-Based Access Control (RBAC) - ISACA

Role-Based Access Control: What It Is and How It Works

Automated Access Revocation - ISACA

Reconciliation - ISACA

Rule-Based Data Analytics - ISACA

[CRISC Review Manual, 7th Edition]

The best course of action for the risk practitioner is to follow the incident reporting procedures established by the organization. This will ensure that the incident is properly documented, escalated, and resolved in a timely and consistent manner. Reporting the incident to the chief risk officer, advising the employee to forward the email to the phishing team, or advising the employee to permanently delete the email are not the best courses of action, as they may not comply with the organization’s policies and standards, and may not address the root cause and impact of the incident. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 4, Section 4.2.2.1, page 193.

A RACI matrix clearly defines roles and responsibilities, making it the primary reference for identifying accountability. This aligns withRisk Governance Practicesfor clarifying ownership.

A digital certificate is a document that contains the public key and the identity of the owner of the public key, and is signed by a trusted third party called a certificate authority (CA)1. A digital certificate can be used to ensure the message reaches the intended recipient without alteration, by using the following steps2:

The sender encrypts the message with the recipient’s public key, which can only be decrypted by the recipient’s private key. This ensures the confidentiality of the message, as only the intended recipient can read it.

The sender signs the message with their own private key, which can be verified by anyone who has their public key. This ensures the integrity and authenticity of the message, as it proves that the message has not been tampered with and that it comes from the sender.

The sender attaches their digital certificate to the message, which contains their public key and their identity, and is signed by a CA. This ensures the validity and trustworthiness of the sender’s public key and identity, as it confirms that they have been verified by a CA.

The recipient receives the message and the digital certificate, and verifies the signature of the CA on the digital certificate. This ensures that the digital certificate is genuine and has not been forged or revoked.

The recipient uses the public key from the digital certificate to verify the signature of the sender on the message. This ensures that the message has not been altered and that it comes from the sender.

The recipient uses their own private key to decrypt the message. This ensures that they can read the message.

Therefore, adding a digital certificate is the best way to ensure the message reaches the intended recipient without alteration, as it provides encryption, digital signature, and certificate verification, which are the three main components of secure email communication3. Applying multi-factor authentication, adding a hash to the message, and adding a secret key are not the best ways to ensure the message reaches the intended recipient without alteration, as they do not provide all the components of secure email communication. Applying multi-factor authentication is a technique that requires the user to provide two or more pieces of evidence to prove their identity, such as a password, a code, or a biometric factor4. Multi-factor authentication can enhance the security of the email account, but it does not protect the message itselffrom being intercepted, modified, or impersonated. Adding a hash to the message is a technique that involves applying a mathematical function to the message to generate a fixed-length value, called a hash or a digest, that uniquely represents the message5. A hash can be used to verify the integrity of the message, as any change in the message will result in a different hash. However, ahash does not provide confidentiality or authenticity of the message, as it does not encrypt themessage or identify the sender. Adding a secret key is a technique that involves using a single key, known only to the sender and the recipient, to encrypt and decrypt the message6. A secret key can provide confidentiality of the message, as only the sender and the recipient can read it. However, a secret key does not provide integrity or authenticity of the message, as it does not prevent the message from being altered or spoofed. Moreover, a secret key requires a secure way of exchanging the key between the sender and the recipient, which may not be feasible or reliable over email. References = 1: What is a digital certificate? | Norton2: How to Send Secure Emails in 2023 | A Guide to Secure Email - ProPrivacy3: Secure Email: A Complete Guide for 2023 - StartMail4: What is Multi-Factor Authentication (MFA)? | Duo Security5: What is a Hash Function? | Definition and FAQs6: [What is Symmetric Encryption? | Definition and FAQs]

Residual risk is the risk that remains after applying risk responses, such as avoidance, mitigation, transfer, or acceptance. It represents the level of exposure that the organisation is willing to tolerate or assume. Residual risk should be aligned with the organisation’s risk appetite and risk tolerance, which are determined by senior management. Therefore, the best way to obtain senior management support for investment in a control implementation would be to articulate the reduction in residual risk that the control would achieve. This would demonstrate how the control would help the organisation meet its riskobjectives and reduce the likelihood or impact of adverse events. References = ISACA CRISC Review Manual, 7th Edition, Chapter 1, Section 1.3.2, page 25.

 A change in the risk profile would be the most important information to communicate to stakeholders after an annual risk assessment is completed, as it indicates how the risk landscape of the organization has changed over time, and how it affects the achievement of the business goals and objectives. A decrease in threats, an increase in reported vulnerabilities, and an increase in identified risk scenarios are also important information, but they are not the most important, as they are specific aspects of the risk profile, and do not provide a holistic view of the risk exposure and appetite of the organization. References = CRISC Review Manual, 7th Edition, page 109.

The best way to ensure that information system controls are effective is to test them periodically. Testing controls periodically helps to verify that the controls are operating as intended, and that they are aligned with the enterprise’s objectives, policies, and standards. Testing controls periodically also helps to identify any gaps, weaknesses, or deficiencies in the controls, and to implement corrective actions or improvements. Responding promptly to control exceptions, implementing compensating controls, and automating manual controls are good practices, but they are not the best way to ensure control effectiveness. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 3, Section 3.1.1.2, page 1071

1: ISACA Certified in Risk and Information Systems Control (CRISC®) Exam Guide, Answer to Question 641.

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

Involve the development team in planning is the best recommendation to help reduce IT risk associated with scheduling overruns when starting a new application development project. This is because involving the development team in planning can help ensure that the project scope, requirements, resources, and timeline are realistic, feasible, and agreed upon by all stakeholders. It can also help improve the communication, collaboration, and commitment of the development team, as well as identify and mitigate potential risks and issues early in the project life cycle. According to the CRISC Review Manual 2022, one of the key risk identification techniques for IT projects is to involve the project team and other relevant parties in the risk assessment process1. According to the CRISC Review Questions, Answers & Explanations Manual 2022, involving the development team in planning is the correct answer to this question2.

Implementing a tool to track the development team’s deliverables, reviewing the software development life cycle, and assigning more developers to the project team are not the best recommendations to help reduce IT risk associated with scheduling overruns. These are possible actions that can be taken during or after the planning phase, but they do not address the root cause of the risk, which is the lack of involvement of the development team in planning. Implementing a tool to track the development team’s deliverables can help monitor the project progress and performance, but it does not guarantee that the deliverables are aligned with the project objectives and expectations. Reviewing the software development life cycle can help ensure that the project follows a structured and standardized process, but it does not account for the specific needs and challenges of the project. Assigning more developers to the project team can help increase the project capacity and productivity, but it can also introduce new risks such as coordination, communication, and quality issues.

Key risk indicators (KRIs) are metrics used by organizations to monitor and assess potential risks that may impact their objectives and performance. KRIs also provide early warning signals that help organizations identify, analyze, and address risks before they escalate into significant issues1. The most importantreason to monitor KRIs is to help management lessen the impact of realized risk, which is the actual or expected negative consequence of a risk event2. By monitoring KRIs, management can gain insight into the current and emerging risk exposures and trends, and evaluate their alignment with the organization’s risk appetite and tolerance3. This enables management to make informed and timely decisions and actions to mitigate or eliminate the risks, and to allocate resources and prioritize efforts where they are most needed. By lessening the impact of realized risk, management can also protect and enhance the organization’s reputation, performance, and value. Identifying early risk transfer strategies, analyzing the chain of risk events, and identifying the root cause of risk events are not the most important reasons to monitor KRIs, as they do not provide the same level of benefit and value as lessening the impact of realized risk. Identifying early risk transfer strategies is a process that involves finding and implementing ways to shift or share the risk or its impact to another party, such as through insurance, outsourcing, or hedging4. Identifying early risk transfer strategies can help to reduce the organization’s risk exposure and liability, but it does not necessarily lessen the impact of realized risk, as the risk or its impact may still occur or affect the organization indirectly. Analyzing the chain of risk events is a process that involves tracing and understanding the sequence and interconnection of the risk events that lead to a specific outcome or consequence5. Analyzing the chain of risk events can help to identify and address the root causes and contributing factors of the risk events, but it does not necessarily lessen the impact of realized risk, as the outcome or consequence may have already occurred or be unavoidable. Identifying the root cause of risk events is a process that involves finding and determining the underlying or fundamental source or reason of the risk events. Identifying the root cause of risk events can help to prevent or correct the recurrence or escalation of the risk events, but it does not necessarily lessen the impact of realized risk, as the impact may have already happened or be irreversible. References = 1: Key Risk Indicators: A Practical Guide | SafetyCulture2: Risk Impact - an overview | ScienceDirect Topics3: KRI Framework for Operational Risk Management | Workiva4: Risk Transfer - an overview | ScienceDirect Topics5: EventChainMethodology - Wikipedia : [Root Cause Analysis - an overview | ScienceDirect Topics] : [Risk and Information Systems Control Study Manual, Chapter 4: Risk and Control Monitoring and Reporting, Section 4.1: Key Risk Indicators, pp. 181-185.]

Changes to data sensitivity during the data life cycle present the greatest risk for a global organization when implementing a data classification policy, as they may result in data being under-protected or over-protected, leading to potential data breaches, compliance violations, or inefficiencies. Data sensitivity refers to the level of confidentiality, integrity, and availability that the data requires, and it may changedepending on the data’s creation, storage, processing,transmission, or disposal. A data classification policy should consider the changes to data sensitivity during the data life cycle and ensure that the appropriate controls and procedures are applied at each stage. Data encryption not applied to all sensitive data, many data assets that need to be classified, and changes to information handling procedures not documented are not the greatest risks, as they do not affect the data classification policy itself, but rather the implementation or execution of the policy. References = CRISC Certified in Risk and Information Systems Control – Question211; ISACA Certified in Risk and Information Systems Control (CRISC) Certification Exam Question and Answers, question 211.

A control is a measure or action that is implemented to reduce the likelihood or impact of a risk event, or to enhance the benefits or opportunities of a risk event. A control owner is a person who is assigned the responsibility and authority for the design, implementation, operation, and maintenance of a control. A risk register is a tool that records and tracks the information about the identified risks, such as the risk description, category, owner, probability, impact, response strategy, status, and action plan. When an information security audit identified a risk resulting from the failure of an automated control, the person who is responsible for ensuring the risk register is updated accordingly is the control owner. The control owner should update the risk register with the information about the failed control, such as the cause, consequence, status, and action plan. The control owner should also monitor the performance and compliance of the control, and recommend any improvements or adjustments as needed.

The business manager is best suited to assess the impact of potential data loss when outsourcing a key database to an external service provider.

Role of the Business Manager:

Understanding Business Impact:The business manager has a comprehensive understanding of the business processes, the criticality of the data, and the potential impact of data loss on business operations.

Decision Making:They are responsible for making decisions regarding risk tolerance, business continuity, and aligning the risk management practices with business objectives.

Assessment of Data Loss Impact:

Operational Impact:The business manager can evaluate how data loss would affect day-to-day operations and overall business continuity.

Financial and Reputational Impact:They can also assess the financial repercussions and potential damage to the organization’s reputation, providing a holistic view of the impact.

The percentage of projects with developed controls on scope creep is the best key performance indicator (KPI) to measure how effectively risk management practices are embedded in the project management office (PMO), as it reflects the ability of the PMO to identify, assess, and respond to the risk of project scope changes that may affect the project objectives, budget, and schedule. The other options are not the best KPIs, as they do not directly measure the effectiveness of risk management practices in the PMO, but rather the outcomes or consequences of risk management decisions. References = CRISC Review Manual, 7th Edition, page 110.