Free Shared Assessments CTPRP Practice Exam with Questions & Answers

 Risk culture is the term used to describe the collective way that an organization thinks about, manages, and responds to risk. It is influenced by the organization’s values, beliefs, norms, and practices, as well as the external environment and stakeholders. Risk culture affects how employees perceive, communicate, and act on risk issues, and how they balance risk and reward in their decision making. A strong risk culture is one that supports the organization’s strategic objectives, fosters accountability and transparency, and promotes learning and improvement. A weak risk culture is one that undermines the organization’s risk management framework, creates silos and conflicts, and exposes the organization to excessive or unnecessary risks. References:

• Shared Assessments CTPRP Study Guide, page 13, section 2.1.1
• GARP Best Practices Guidance for Third Party Risk, page 5, section 2.1
• Organizational culture | Definition, Benefits and Challenges

Inherent risk refers to the level of risk that exists in the absence of any controls or mitigation measures. It represents the natural exposure to risk in operations, transactions, or activities without considering the effectiveness of any risk management practices. In the context of Third-Party Risk Management (TPRM), inherent risk assesses the potential for loss or adverse outcomes associated with a third-party relationship before any controls or risk treatments are applied. Understanding inherent risk is crucial for organizations to identify where controls are necessary and to prioritize risk management efforts based on the potential impact and likelihood of different risks. This concept is foundational in risk management frameworks and is used to guide the development and implementation of controls to reduce risk to an acceptable level, aligned with the organization's risk appetite and tolerance.

References:

• Risk management standards such as ISO 31000 (Risk Management - Guidelines) provide a framework for assessing and managing inherent risks, emphasizing the importance of understanding the baseline level of risk in decision-making processes.
• The "Third-Party Risk Management Guide" by ISACA outlines best practices for assessing inherent risks in third-party relationships, highlighting the need to evaluate the nature and scope of third-party engagements to determine the baseline risk exposure.

A BCP or IT DR plan is a set of procedures and actions that an organization takes to ensure the continuity and recovery of its critical business functions and IT systems in the event of a disruption. A BCP or IT DR plan typically covers the following aspects12:

• Identification and prioritization of critical business functions and IT systems
• Assessment and mitigation of risks and threats to the organization
• Allocation and mobilization of resources and personnel
• Communication and coordination with internal and external stakeholders
• Testing and updating of the plan

Among the four examples of a response to external environmental factors, protocols for social media channels and PR communication are the least likely to be managed directly within the BCP or IT DR plan. This is because social media and PR communication are not critical business functions or IT systems that need to be restored or maintained during a disruption. They are rather supplementary tools that can be used to inform and engage with the public, customers, partners, and media about the organization’s situation and actions3. Therefore, protocols for social media and PR communication are more likely to be part of a crisis communication plan, which is a separate but related document that outlines the strategies and tactics for communicating with various audiences during a crisis.

The other three examples are more likely to be managed directly within the BCP or IT DR plan, as they directly affect the organization’s ability to perform its critical business functions and IT systems. For instance, a response to a natural or man-made disruption would involve activating the BCP or IT DR plan, assessing the impact and extent of the damage, deploying backup and recovery solutions, and restoring normal operations as soon as possible. A response to a dependency on key employee or supplier issues would involve identifying and managing the single points of failure, implementing contingency plans, and ensuring the availability and redundancy of essential skills and resources. A response to a large scale illness or health outbreak would involve implementing health and safety measures, enabling remote work arrangements, and ensuring the resilience and continuity of the workforce. References:

• Business continuity vs. disaster recovery: Which plan is right … - IBM
• Business Continuity vs Disaster Recovery: What’s The Difference?
• Disaster recovery plan vs. business continuity plan: Is there a difference?
• [Crisis Communication Plan: A PR Blue Print by Sandra K. Clawson Freeo]
• [Disaster Recovery Planning (DRP) | Business Continuity Plan (BCP) | Disaster Recovery Journal]
• [Managing Third Party Risk in a Disrupted World]
• [Business Continuity Planning for a Pandemic]

Data Loss Prevention (DLP) programs are not based on default tool configuration, but on the specific needs and risks of the organization. DLP programs should be tailored to the data types, locations, flows, and users that are relevant to the business. DLP programs should also align with the regulatory and contractual obligations, as well as the data risk appetite, of the organization. Default tool configuration may not adequately address these factors and may result in either over-blocking or under-protecting data. Therefore, statement C is false about DLP programs. References:

• 1: The Best Data Loss Prevention Software Tools - Comparitech
• 2: Build a Successful Data Loss Prevention Program in 5 Steps - Gartner
• 3: What is data loss prevention (DLP)? | Microsoft Security

Due diligence is the process of evaluating the risks and opportunities associated with a potential or existing third-party vendor. Due diligence can vary in scope and depth depending on the level of risk that the vendor poses to the organization. Lower risk vendors are those that have minimal impact on the organization’s operations, reputation, or compliance, and that do not handle sensitive or confidential data or systems. For lower risk vendors, conducting due diligence may involve accepting the service provider’s self-assessment questionnaire responses as sufficient evidence of their capabilities, performance, and compliance. A self-assessment questionnaire is a tool that allows the vendor to provide information about their organization, services, processes, controls, and policies. The organization can use the questionnaire to verify the vendor’s identity, qualifications, references, and certifications, and to assess the vendor’s alignment with the organization’s standards and expectations. Accepting the vendor’s self-assessment questionnaire responses as the primary source of due diligence can save time and resources for the organization, and can also demonstrate trust and confidence in the vendor. However, the organization should also ensure that the questionnaire is comprehensive, relevant, and updated, and that the vendor’s responses are accurate, complete, and consistent. The organization should also reserve the right to request additional information or documentation from the vendor if needed, and to conduct periodic reviews or audits of the vendor’s performance and compliance.

The other options do not best describe conducting due diligence of a lower risk vendor, because they either involve more extensive or rigorous methods of due diligence, or they are not directly related to due diligence. Preparing reports to management regarding the status of third party risk management and remediation activities is an important part of monitoring and managing the vendor relationship, but it is not a due diligence activity per se. Reviewing a service provider’s self-assessment questionnaire and external audit report(s) is a more thorough way of conducting due diligence, but it may not be necessary or feasible for lower risk vendors, especially if the external audit report(s) are not readily available or relevant. Requesting and filing a service provider’s external audit report(s) for future reference is a good practice for maintaining documentation and evidence of due diligence, but it is not a due diligence activity itself.

References:

• Third Party Risk Management (TPRM) | Shared Assessments
• Vendor Due Diligence Strategy Guide and Checklist | Prevalent
• Vendor due diligence: a practical guide and checklist

Business Continuity or Disaster Recovery (BC/DR) plans are designed to ensure the continuity of critical business functions and processes in the event of a disruption or disaster. BC/DR plans should include annual testing activities to validate the effectiveness and readiness of the plans, as well as to identify and address any gaps or weaknesses. Testing activities should cover the three main areas of BC/DR: people, processes, and technology12.

The four options given in the question represent different types of testing activities that may be included in the BC/DR plans. However, option D is the least likely to be included, as it is not a mandatory or common practice for most organizations. While it is beneficial to involve third party service providers in the BC/DR testing, as they may play a vital role in the recovery process, it is not a requirement or a standard for most industries. Third party service providers may have their own BC/DR plans and testing schedules, which may not align with the organization’s plans and objectives. Moreover, requiring their participation in industry exercises may pose challenges in terms of coordination, confidentiality, and cost34.

Therefore, option D is the correct answer, as it is the least likely to be included in the annual testing activities for BC/DR plans. The other options are more likely to be included, as they are essential for ensuring the availability and functionality of the technology, processes, and personnel that support the critical business operations. These options are:

• A. Plans to enable technology and business operations to be resumed at a back-up site. This is a common testing activity that involves simulating a disaster scenario that affects the primary site and activating the back-up site to resume the operations. This tests the technical infrastructure, data backup and recovery, and operational procedures of the BC/DR plan12.
• B. Process to validate that specific databases can be accessed by applications at the designated location. This is a common testing activity that involves verifying that the data and applications that are critical for the business functions are accessible and functional at the recovery location. This tests the data integrity, security, and compatibility of the BC/DR plan12.
• C. Ability for business personnel to perform their functions at an alternate work space location. This is a common testing activity that involves relocating the key staff to an alternate location and having them perform their normal duties. This tests the communication, coordination, and productivity of the BC/DR plan12.

References:

• 1: How to Test a Business Continuity Disaster Recovery (BCDR) Plan
• 2: Business Continuity or Disaster Recovery Testing and Training Guidelines
• 3: Third Party Risk Management and Business Continuity Planning
• 4: Third Party Risk Management: Business Continuity and Disaster Recovery

A data flow diagram (DFD) is a graphical representation of the flow of information between outsourcers and third parties, as well as within a system or process. It shows the sources and destinations of data, the processes that transform data, the data stores that hold data, and the data flows that connect them. A DFD can help to understand and refine the business processes or systems that involve data exchange with external entities. A DFD can also help to identify potential risks and vulnerabilities in the data flows, such as data leakage, data corruption, data loss, or unauthorized access.

The other options are incorrect because they do not match the definition of a visual representation of data flows. A configuration standard (A) is a set of rules or guidelines that define how a system or process should be configured, such as hardware, software, or network settings. An audit log report (B) is a record of the activities or events that occurred in a system or process, such as user actions, system changes, or security incidents. A network diagram © is a graphical representation of the physical or logical connections between devices or nodes in a network, such as routers, switches, servers, or computers. References:

https://www.visual-paradigm.com/tutorials/data-flow-diagram-dfd.jsp

https://www.lucidchart.com/pages/data-flow-diagram

This answer is the best approach because it aligns with the principles of third-party risk management, which include ensuring compliance with company policies, contractual obligations, and regulatory requirements. By asking the vendor to replace the subcontractor, the company is exercising its right to terminate or modify the relationship if the vendor fails to meet the agreed-upon standards or poses unacceptable risks. This also minimizes the potential impact of the vendor’s non-compliance on the company’s reputation, operations, and data security. The other options are less effective because they either ignore the issue, compromise the company’s policy, or rely on the vendor’s self-assessment without verification. References:

• Third Party Risk Management Framework, Module 3: Program Governance, Section 3.2: Policies and Procedures, p. 14
• Third Party Risk Management Framework, Module 4: Program Components, Section 4.3: Contracting, p. 24
• Third Party Risk Management Framework, Module 5: Program Implementation, Section 5.2: Ongoing Monitoring, p. 32
• Best-Practices Guidance for Third-Party Risk, Section: Defend Against Privileged User Risks, p. 2
• Five Best Practices to Manage and Control Third-Party Risk, Section: Best Practices for Controlling Third-Party Vendor Risks, p. 3

A cloud hosting vendor assessment program is a process of evaluating the security, compliance, and performance of a cloud service provider (CSP) that hosts an organization’s data or applications. A cloud hosting vendor assessment program typically includes the following components123:

• Reviewing the entity’s image snapshot approval and management process: This component involves verifying how the CSP creates, approves, stores, and deletes image snapshots of the virtual machines or containers that run the organization’s workloads. Image snapshots can contain sensitive data or configuration settings that need to be protected from unauthorized access or modification.
• Requiring security services documentation and audit attestation reports: This component involves requesting and reviewing the CSP’s documentation and reports that demonstrate the security controls and practices that the CSP implements to protect the organization’s data and applications. These may include service level agreements (SLAs), security policies and procedures, security certifications and standards, vulnerability scanning and patching reports, incident response and disaster recovery plans, and independent audit reports such as SOC 2 or ISO 27001.
• Requiring compliance evidence that provides the definition of patching responsibilities: This component involves asking and verifying how the CSP handles the patching of the operating systems, applications, and libraries that run on the cloud infrastructure. Patching is a critical activity to prevent security breaches and ensure compliance with regulatory requirements. The organization needs to understand the roles and responsibilities of the CSP and the organization in patching the cloud environment, and the frequency and scope of patching activities.

The component that is typically NOT part of a cloud hosting vendor assessment program is conducting customer performed penetration tests. Penetration testing is a method of simulating a cyberattack on a system or network to identify and exploit vulnerabilities and weaknesses. While penetration testing can be a valuable tool to assess the security posture of a CSP, it is not usually included in a cloud hosting vendor assessment program for the following reasons :

• Penetration testing may violate the CSP’s terms of service or acceptable use policy, which may prohibit or restrict the customer from performing any unauthorized or disruptive activities on the cloud infrastructure. The customer may face legal or contractual consequences if they conduct penetration testing without the CSP’s consent or knowledge.
• Penetration testing may interfere with the CSP’s normal operations or affect the availability and performance of the cloud services for other customers. The customer may cause unintended damage or disruption to the CSP’s systems or networks, or trigger false alarms or alerts that may divert the CSP’s resources or attention.
• Penetration testing may not provide a comprehensive or accurate assessment of the CSP’s security, as the customer may have limited visibility or access to the CSP’s internal systems or networks, or may encounter security mechanisms or countermeasures that prevent or limit the penetration testing activities. The customer may also face ethical or legal issues if they access or compromise the data or systems of other customers or the CSP.

Therefore, the verified answer to the question is D. Conducting customer performed penetration tests.

References:

• Four Important Best Practices for Assessing Cloud Vendors
• Top 11 Questionnaires for IT Vendor Assessment in 2024
• Cloud Vendor Assessments | Done The Right Way
• [Penetration Testing in the Cloud: What You Need to Know]
• [Cloud Penetration Testing: Challenges and Best Practices]

Application security design standards are a set of principles for software development that address the top application security risks and industry web requirements. They provide guidance on how to design, develop, and deploy secure applications that meet the security objectives of the organization and the expectations of the customers and regulators. Application security design standards cover topics such as secure design principles, threat modeling, encryption, identity and access management, logging and auditing, coding standards and conventions, safe functions, data handling, error handling, third-party components, and testing and validation. Application security design standards help developers avoid common security pitfalls, reduce vulnerabilities, and enhance the quality and reliability of the software. Application security design standards also facilitate the alignment of the software development lifecycle with the third-party risk management framework, by ensuring that security requirements are defined, implemented, verified, and maintained throughout the development process. References:

• Fundamental Practices for Secure Software Development
• Secure Coding Practices
• Secure Software Development Best Practices
• Certified Third Party Risk Professional (CTPRP) Study Guide