Isaca CRISC Certified in Risk and Information Systems Control Exam Dumps and Practice Test Questions Set 12 Q166 — 180
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Question 166:
An organization implements a risk-based audit approach. Which factor should determine audit priority?
A) Alphabetical order of departments
B) Residual risk level and inherent risk exposure
C) Office location proximity
D) Department size only
Answer: B
Explanation:
Residual risk level and inherent risk exposure should determine audit priority in a risk-based audit approach by focusing limited audit resources on areas with the highest risk exposure or where control effectiveness is most uncertain. This approach ensures that audit activities provide maximum value by examining the most significant risk areas.
Risk-based audit prioritization considers multiple factors including inherent risk representing the risk before controls are applied, residual risk showing the remaining risk after control implementation, control maturity indicating how well controls are designed and operating, time since last audit revealing areas with potential control drift, regulatory requirements mandating specific audit frequencies, business criticality identifying processes essential to operations, and known issues from prior audits or incidents suggesting ongoing problems.
Audit universe development catalogs all auditable areas with risk ratings enabling systematic prioritization. Each potential audit receives risk scores across multiple dimensions creating an overall risk rating. High-risk areas receive frequent audits while lower-risk areas have less frequent coverage. The audit universe is updated periodically as business operations and risk profiles change ensuring audit plans remain relevant.
Resource allocation uses risk prioritization to develop annual audit plans balancing comprehensive coverage against available resources. High-risk areas that have not been audited recently receive priority. Medium-risk areas are scheduled based on resource availability. Low-risk areas may be audited on extended cycles or through alternative assurance methods. This systematic approach optimizes audit coverage.
Option A is incorrect because alphabetical ordering ignores risk significance making it an arbitrary and ineffective prioritization method. Option C is wrong because physical proximity is a logistical convenience rather than a risk-based criterion. Option D is incorrect because department size alone does not indicate risk level or audit priority.
Question 167:
A risk practitioner develops risk scenarios for business impact analysis. Which element is essential for a complete risk scenario?
A) Threat, vulnerability, asset, and impact description
B) Marketing slogans only
C) Social media content
D) Unrelated anecdotes
Answer: A
Explanation:
Threat, vulnerability, asset, and impact description are essential elements for a complete risk scenario because they provide a comprehensive view of how risks materialize and affect the organization. These components enable stakeholders to understand risk pathways and evaluate appropriate responses based on realistic threat scenarios.
Threat specification identifies what could cause harm including external threats like cyber attackers, natural disasters, or supply chain disruptions, internal threats like malicious insiders or accidental errors, and environmental threats like regulatory changes or market shifts. Clear threat description helps assess likelihood based on threat actor capabilities and motivations.
Vulnerability identification describes weaknesses that threats could exploit including technical vulnerabilities like unpatched systems or weak authentication, process vulnerabilities like inadequate segregation of duties or poor change management, and physical vulnerabilities like inadequate facility protection. Understanding vulnerabilities enables targeted control improvements.
Asset specification identifies what is at risk including information assets like customer data or intellectual property, technology assets like critical systems or network infrastructure, physical assets like facilities or equipment, and intangible assets like reputation or brand value. Asset identification ensures impact assessment considers all valuable resources.
Impact description quantifies or qualifies consequences if the scenario occurs including financial impact from losses or recovery costs, operational impact from service disruption, compliance impact from regulatory violations, reputational impact affecting stakeholder trust, and strategic impact hindering objective achievement. Comprehensive impact assessment supports prioritization and response planning.
Option B is incorrect because marketing content is unrelated to risk scenario development. Option C is wrong because social media is not a component of structured risk scenarios. Option D is incorrect because unrelated stories provide no analytical value for understanding risks.
Question 168:
An organization experiences a ransomware attack. Which risk response was MOST LIKELY inadequate?
A) Risk avoidance
B) Risk mitigation through preventive controls and backup procedures
C) Risk transfer only
D) Risk appetite statement
Answer: B
Explanation:
Risk mitigation through preventive controls and backup procedures was most likely inadequate given the successful ransomware attack because effective preventive controls should block malware before execution and reliable backups enable recovery without paying ransom. The attack’s success suggests weaknesses in technical defenses, security awareness, or backup/recovery capabilities.
Preventive control deficiencies enabling ransomware include inadequate email filtering allowing phishing messages to reach users, insufficient endpoint protection failing to detect malware, lack of application whitelisting permitting unauthorized software execution, weak access controls enabling lateral movement, missing network segmentation allowing wide-scale infection, and inadequate patch management leaving exploitable vulnerabilities. Multiple control failures typically enable successful attacks.
Backup inadequacies preventing recovery include insufficient backup frequency causing unacceptable data loss, lack of offline or immutable backups allowing ransomware to encrypt backup files, untested restoration procedures that fail during crisis, incomplete backup coverage missing critical systems or data, and insufficient retention preventing recovery to clean restore points before encryption. These backup weaknesses force ransom payment consideration.
Detection and response gaps exacerbate impact including delayed threat detection allowing extensive encryption before discovery, slow incident response enabling attacker persistence, inadequate containment allowing continued spread, and poor communication creating confusion. Improving these capabilities limits damage even when preventive controls fail.
Option A is incorrect because complete risk avoidance would mean not using computers, which is unrealistic for modern organizations. Option C is wrong because insurance transfer alone without mitigation controls does not prevent attacks or enable recovery. Option D is incorrect because risk appetite statements define acceptable risk but do not prevent attacks.
Question 169:
A risk practitioner evaluates the risk register. Which indicator suggests the risk register needs updating?
A) All risks closed with no new risks identified
B) New business initiatives launched without corresponding risk assessment
C) Perfect risk alignment
D) Zero residual risk
Answer: B
Explanation:
New business initiatives launched without corresponding risk assessment suggests the risk register needs updating because significant changes in operations, technology, or business models introduce new risks that should be identified, assessed, and documented. The absence of new risk entries despite business changes indicates the risk register is stale and incomplete.
Risk register maintenance requires periodic updates reflecting organizational changes including new product or service launches introducing operational or market risks, technology implementations creating security or integration risks, mergers or acquisitions adding third-party and cultural risks, regulatory changes imposing compliance risks, organizational restructuring affecting roles and controls, and market conditions creating competitive or financial risks. Each change should trigger risk assessment.
Update triggers include both scheduled and event-driven reviews. Quarterly or annual reviews systematically evaluate all registered risks and scan for emerging risks. Event-driven updates occur when major changes happen including strategic initiatives, significant incidents, regulatory developments, or material control changes. This dual approach ensures the register remains current without excessive administrative burden.
Risk register quality indicators demonstrate maintenance effectiveness including ratio of open to closed risks showing active management, average age of risk entries revealing staleness, date of last review confirming currency, completeness relative to business operations indicating comprehensive coverage, and stakeholder confidence reflecting register usefulness. Monitoring these indicators identifies when updates are needed.
Option A is incorrect because no identified risks suggests insufficient scanning rather than good risk management. Option C is wrong because perfect alignment is unlikely in dynamic environments and may indicate stagnant assessment. Option D is incorrect because zero residual risk is impossible and suggests unrealistic assessment or inadequate controls rather than effective management.
Question 170:
An organization implements continuous monitoring of key controls. Which benefit does continuous monitoring provide?
A) Elimination of all risks
B) Real-time or near-real-time detection of control failures enabling rapid response
C) Guarantee of zero incidents
D) Complete automation of decisions
Answer: B
Explanation:
Real-time or near-real-time detection of control failures enabling rapid response is the primary benefit of continuous monitoring by providing immediate visibility when controls stop operating effectively. This timely detection allows quick remediation before control failures result in security incidents or operational disruptions.
Continuous monitoring implementation uses automated tools to evaluate control operation including log analysis detecting security events, transaction monitoring identifying anomalies, access reviews flagging inappropriate privileges, configuration scanning finding policy violations, vulnerability scanning identifying security weaknesses, and performance monitoring revealing system degradation. Automation enables continuous assessment that manual processes cannot achieve.
Alert generation provides actionable notifications when monitoring detects issues including threshold violations when metrics exceed acceptable ranges, anomaly detection identifying unusual patterns, failed control execution showing control breakdown, compliance violations indicating policy breaches, and performance degradation revealing operational problems. Automated alerts enable rapid awareness and response.
Response workflows link monitoring alerts to remediation processes including automated remediation for certain issues like blocking suspicious traffic, workflow triggers routing alerts to appropriate personnel, investigation procedures guiding problem analysis, remediation tracking ensuring issues are resolved, and trend analysis identifying systemic problems requiring process improvements. Integration between monitoring and response accelerates issue resolution.
Option A is incorrect because monitoring detects problems but cannot eliminate all risks or prevent every issue. Option C is wrong because monitoring improves detection and response but cannot guarantee zero incidents given evolving threats. Option D is incorrect because while monitoring automates detection, most remediation decisions require human judgment.
Question 171:
A risk practitioner assesses privacy risks for a new data analytics platform. Which risk is MOST significant?
A) Office furniture color schemes
B) Unauthorized data access or use violating privacy regulations and customer expectations
C) Conference room scheduling conflicts
D) Preferred coffee brand selection
Answer: B
Explanation:
Unauthorized data access or use violating privacy regulations and customer expectations is the most significant privacy risk for data analytics platforms because these systems process large volumes of personal information and advanced analytics could reveal sensitive insights. Privacy violations result in regulatory penalties, lawsuits, reputational damage, and customer trust erosion.
Privacy risk factors in analytics platforms include data collection scope where excessive information gathering increases exposure, data quality issues including outdated or inaccurate information violating accuracy principles, purpose limitation violations when data is used beyond originally stated purposes, retention risks from keeping data longer than necessary, security vulnerabilities enabling unauthorized access, and inadequate transparency preventing individuals from understanding data use.
Regulatory compliance requirements vary by jurisdiction including GDPR in Europe mandating lawful basis for processing and individual rights, CCPA in California providing consumer privacy rights, HIPAA in healthcare protecting health information, GLBA in financial services securing customer data, and sector-specific regulations imposing additional requirements. Analytics platforms must comply with all applicable regulations.
Privacy-by-design principles reduce risk including data minimization collecting only necessary information, purpose specification defining clear processing purposes, access controls limiting data access to authorized personnel, encryption protecting data confidentiality, anonymization removing identifying information when possible, and transparency providing clear privacy notices. These controls demonstrate privacy commitment.
Option A is incorrect because office aesthetics are unrelated to data privacy risks in analytics platforms. Option C is wrong because facility management issues do not constitute privacy risks. Option D is incorrect because beverage preferences have no connection to privacy risk assessment.
Question 172:
An organization develops a business continuity plan. Which metric defines the maximum tolerable downtime for critical processes?
A) Recovery Point Objective (RPO)
B) Recovery Time Objective (RTO)
C) Annual Loss Expectancy (ALE)
D) Single Loss Expectancy (SLE)
Answer: B
Explanation:
Recovery Time Objective (RTO) defines the maximum tolerable downtime for critical processes by specifying how quickly operations must be restored after disruption to avoid unacceptable consequences. RTO drives business continuity planning decisions about recovery strategies, resource investments, and technology solutions.
RTO determination involves business impact analysis identifying how quickly different processes must recover based on financial impact from lost revenue or productivity, customer impact affecting satisfaction and retention, regulatory requirements mandating certain recovery speeds, competitive impact where extended outages cause market share loss, and operational dependencies where downstream processes require upstream process availability. Each process receives an RTO based on its criticality.
Recovery strategy selection depends on RTO requirements with shorter RTOs requiring more expensive solutions. Hot sites with real-time replication achieve RTOs measured in minutes or hours but cost significantly more than cold sites requiring days for recovery. Cloud-based recovery solutions increasingly provide flexible options balancing cost and recovery speed. Organizations match recovery investments to process criticality.
Testing validates whether recovery capabilities meet RTO requirements through tabletop exercises reviewing procedures, simulations executing recovery plans in test environments, and full recovery tests actually failing over to backup systems. Testing identifies gaps between planned and actual recovery times enabling improvement before real disasters occur. Regular testing maintains recovery capability.
Option A is incorrect because RPO defines maximum acceptable data loss measured in time, not recovery time. Option C is wrong because ALE quantifies expected annual loss from risks rather than recovery timing. Option D is incorrect because SLE represents loss from a single incident occurrence, not recovery objectives.
Question 173:
A risk practitioner identifies a control that costs more than the risk it mitigates. Which action is MOST appropriate?
A) Increase control costs further
B) Evaluate whether risk acceptance or alternative controls provide better value
C) Implement additional expensive controls
D) Ignore both risk and cost
Answer: B
Explanation:
Evaluating whether risk acceptance or alternative controls provide better value is most appropriate when control costs exceed risk value because resources should be allocated efficiently to maximize overall risk reduction. This cost-benefit analysis ensures risk management investments are economically justified.
Alternative evaluation considers multiple options including risk acceptance where the organization simply bears the risk if it falls within risk tolerance and costs less than control implementation, alternative controls that achieve similar risk reduction at lower cost using different technical or procedural approaches, risk transfer through insurance or outsourcing shifting financial consequences, and risk avoidance by discontinuing activities creating the risk.
Cost-benefit analysis methodology compares control costs against risk reduction including initial implementation costs for technology, consulting, and setup, ongoing operational costs for maintenance and monitoring, opportunity costs from constrained operations or reduced functionality, and qualitative factors like user impact or strategic alignment. These total costs compare against risk reduction quantified as decreased expected loss.
Decision framework guides action based on analysis results. If control costs significantly exceed risk reduction value and the risk is within tolerance, acceptance may be appropriate. If alternative controls provide similar protection at lower cost, replacement makes sense. If the risk is material but all controls are too expensive, risk transfer or partial mitigation combined with acceptance might be optimal. Each situation requires judgment balancing multiple factors.
Option A is incorrect because increasing costs when controls are already uneconomical compounds the problem. Option C is wrong because adding more expensive controls worsens cost inefficiency. Option D is incorrect because both risk and cost require management attention rather than being ignored.
Question 174:
An organization implements a risk management information system. Which capability is MOST important for supporting risk-based decision-making?
A) Colorful graphics only
B) Real-time risk reporting with dashboards and alerts
C) Unused features
D) Maximum complexity
Answer: B
Explanation:
Real-time risk reporting with dashboards and alerts is most important for supporting risk-based decision-making because timely, actionable information enables leaders to make informed choices about risk acceptance, mitigation investments, and strategic direction. Current visibility into risk posture allows proactive management rather than reactive responses.
Risk reporting capabilities include executive dashboards providing high-level risk summaries with key indicators and trends, detailed risk registers offering comprehensive information on individual risks, heat maps visualizing risk distribution across likelihood and impact dimensions, trend analysis showing risk posture changes over time, and scenario analysis modeling potential future states. These varied views support different decision-making needs.
Alert mechanisms provide proactive notification when risk conditions change including threshold alerts when KRIs exceed defined limits, emerging risk alerts identifying new threats, escalation notifications requiring management attention, compliance alerts flagging regulatory issues, and incident alerts connecting risk management to incident response. Timely alerts enable rapid response to changing conditions.
Integration capabilities connect risk systems with other enterprise systems including GRC platforms sharing governance and compliance information, audit management systems coordinating assurance activities, incident management systems connecting events to risk scenarios, project management systems incorporating risk into initiative planning, and financial systems enabling cost-benefit analysis. Integration provides comprehensive risk visibility.
Option A is incorrect because visual appeal without substance does not support decision-making. Option C is wrong because unused features provide no value and indicate poor requirements analysis or training. Option D is incorrect because unnecessary complexity hinders adoption and usability rather than improving decision support.
Question 175:
A risk practitioner evaluates third-party security questionnaires. Which limitation should be recognized?
A) Questionnaires provide complete assurance
B) Self-reported information may not reflect actual practices without independent verification
C) Questionnaires eliminate all vendor risk
D) No additional validation needed
Answer: B
Explanation:
Self-reported information may not reflect actual practices without independent verification is an important limitation of security questionnaires because vendors may overstate capabilities, misunderstand questions, or provide aspirational rather than actual answers. This limitation requires supplementary verification through other assurance methods.
Questionnaire limitations include response accuracy concerns where vendors may provide inaccurate information intentionally or unintentionally, point-in-time nature showing only current state without revealing control deterioration over time, lack of evidence requiring trust in vendor assertions without proof, coverage gaps missing important areas not addressed in questions, and interpretation differences where vendors and assessors understand terms differently leading to miscommunication.
Verification methods supplement questionnaires providing additional assurance including independent audit reports like SOC 2 or ISO 27001 certifications offering third-party validation, on-site assessments allowing direct observation of controls, technical testing verifying security implementations, contract reviews ensuring security commitments are enforceable, and reference checks gathering experiences from other customers. Multiple verification methods provide comprehensive assessment.
Risk-based verification applies more rigorous validation to higher-risk vendors including critical service providers requiring extensive verification, vendors accessing sensitive data requiring thorough security validation, and vendors with poor questionnaire responses requiring deeper investigation. Lower-risk vendors may rely primarily on questionnaires with selective verification. This tiered approach optimizes assessment resources.
Option A is incorrect because questionnaires alone provide limited assurance without independent validation. Option C is wrong because no single assessment method eliminates all vendor risks. Option D is incorrect because questionnaires require supplementary verification to ensure accuracy and completeness.
Question 176:
An organization experiences control failures despite documented procedures. Which root cause analysis technique identifies underlying issues?
A) Superficial symptom review only
B) Five Whys or Fishbone diagram analysis
C) Blame assignment without investigation
D) Ignoring the problem
Answer: B
Explanation:
Five Whys or Fishbone diagram analysis identifies underlying issues causing control failures by systematically exploring causal chains beyond immediate symptoms to discover root causes. These structured techniques prevent superficial analysis that addresses symptoms while leaving fundamental problems unresolved.
Five Whys technique asks «why» repeatedly for each answer uncovering deeper causes. For example, a control failure might initially be attributed to an individual error. Asking why the error occurred reveals inadequate training. Asking why training was inadequate reveals no training program exists. Asking why no program exists reveals lack of resources. Asking why resources are lacking reveals competing priorities. This progressive questioning reveals organizational issues rather than stopping at individual blame.
Fishbone diagrams (Ishikawa diagrams) organize potential causes into categories including people factors like training or awareness, process factors like procedure adequacy or workflow design, technology factors like system capabilities or tool effectiveness, environment factors like workload or physical conditions, and management factors like oversight or resource allocation. This structured approach ensures comprehensive cause exploration.
Root cause identification enables effective remediation by addressing fundamental problems. If root cause is inadequate training, remediation includes developing training programs and ensuring staff completion. If root cause is poor process design, remediation involves redesigning workflows. If root cause is insufficient resources, remediation requires leadership attention to prioritization and budget allocation. Targeting root causes prevents recurrence.
Option A is incorrect because superficial review addresses symptoms without identifying and resolving underlying causes. Option C is wrong because blame assignment without systematic analysis does not identify systemic issues enabling failures. Option D is incorrect because ignoring problems ensures they persist and potentially worsen over time.
Question 177:
A risk practitioner assesses artificial intelligence implementation risks. Which risk requires MOST attention?
A) AI system complexity and opacity creating accountability gaps
B) Office artwork selection
C) Desk arrangement patterns
D) Lunch menu diversity
Answer: A
Explanation:
AI system complexity and opacity creating accountability gaps requires most attention because modern AI systems, particularly machine learning models, operate as «black boxes» where decision processes are not transparent or easily explainable. This opacity creates challenges for governance, accountability, compliance, and trust.
AI-specific risks include algorithmic bias where training data or design choices create discriminatory outcomes affecting protected groups, decision opacity preventing understanding of how conclusions are reached, lack of explainability making it difficult to challenge decisions or demonstrate compliance, automation of harmful decisions at scale amplifying impact of errors, adversarial attacks manipulating AI systems through carefully crafted inputs, and data privacy concerns from extensive personal information processing.
Governance challenges for AI include accountability determination when multiple parties contribute to AI systems including data providers, model developers, implementation teams, and users, compliance verification demonstrating regulatory adherence without understanding internal logic, risk assessment evaluating impacts that may not be apparent until deployment, and ethical oversight ensuring alignment with organizational values and societal expectations. Traditional governance frameworks require adaptation for AI.
Risk mitigation strategies include explainable AI techniques developing more transparent models, bias testing evaluating outcomes across demographic groups, human oversight requiring human review of significant decisions, audit trails logging inputs, outputs, and decision factors, sandboxed testing evaluating behavior before production deployment, and ethics reviews assessing implications before deployment. These controls address AI-specific risks.
Option B is incorrect because artwork selection is an aesthetic choice unrelated to AI implementation risks. Option C is wrong because furniture arrangement is a facility matter without connection to AI risk. Option D is incorrect because food service variety has no relationship to AI system risks.
Question 178:
An organization implements DevOps practices. Which risk does rapid deployment create?
A) Slower time to market
B) Inadequate testing or security review leading to vulnerable code in production
C) Excessive documentation
D) Too much oversight
Answer: B
Explanation:
Inadequate testing or security review leading to vulnerable code in production is the risk created by rapid deployment in DevOps practices because the acceleration of development cycles may bypass traditional quality gates if not properly managed. Speed advantages become liabilities when they result in deploying flawed or insecure code.
DevOps risk factors include compressed timelines reducing testing thoroughness, continuous integration automatically deploying code without sufficient review, automated testing focusing on functionality while missing security issues, cultural emphasis on speed potentially overshadowing quality, and reduced separation of duties where developers have production access. These factors increase vulnerability introduction risk.
Security integration into DevOps (DevSecOps) addresses risks by shifting security left through earlier involvement including threat modeling during design, static code analysis during development, dynamic testing during integration, security scanning in continuous integration pipelines, and automated security testing before production deployment. Automation enables security without sacrificing speed.
Risk mitigation practices include security champions embedding security expertise in development teams, security gates requiring approval before production deployment, automated security testing integrating security checks into pipelines, infrastructure as code security scanning configuration for vulnerabilities, and production monitoring detecting issues post-deployment. These practices maintain development velocity while managing security risks.
Option A is incorrect because DevOps accelerates rather than slows time to market. Option C is wrong because DevOps typically reduces documentation overhead through automation. Option D is incorrect because DevOps aims to reduce bureaucratic oversight while maintaining appropriate controls through automation.
Question 179:
A risk practitioner develops risk appetite statements. Which characteristic makes risk appetite statements effective?
A) Vague and ambiguous wording
B) Measurable thresholds aligned with business objectives
C) Contradictory guidelines
D) No stakeholder input
Answer: B
Explanation:
Measurable thresholds aligned with business objectives make risk appetite statements effective by providing clear, actionable guidance that employees can apply in decision-making. Quantifiable boundaries enable objective assessment of whether proposed activities or existing exposures fall within acceptable limits.
Effective appetite statement characteristics include business context explaining why certain risk levels are acceptable or unacceptable, quantifiable metrics specifying boundaries through financial limits, operational parameters, or other measurable criteria, category specificity defining appetite separately for different risk types like financial, operational, or reputational risk, and actionable guidance enabling decision-makers to apply appetite to specific situations.
Appetite communication cascades throughout the organization translating enterprise statements into operational tolerances. Senior management defines overall appetite reflecting board direction and shareholder expectations. Business units develop specific tolerances within enterprise appetite boundaries. Operational teams implement procedures ensuring activities conform to tolerances. This hierarchy ensures consistent application across the organization.
Appetite monitoring tracks actual risk exposure against stated appetite through KRIs measuring current risk levels, risk aggregation summing exposures across categories, threshold alerting notifying stakeholders when limits are approached, and periodic reviews updating appetite as business conditions change. Monitoring ensures appetite remains relevant and is respected in practice.
Option A is incorrect because vague statements provide no actionable guidance for decision-making. Option C is wrong because contradictory statements confuse rather than guide stakeholders. Option D is incorrect because appetite development without stakeholder input lacks buy-in and may not reflect actual risk tolerance.
Question 180:
An organization implements blockchain technology. Which risk assessment consideration is unique to blockchain?
A) Traditional database risks only
B) Immutability creating inability to correct errors or remove data
C) Printing costs
D) Stationary selection
Answer: B
Explanation:
Immutability creating inability to correct errors or remove data is a unique blockchain risk consideration because once information is written to a blockchain, it cannot be altered or deleted. This characteristic, while providing integrity benefits, creates challenges for data quality, privacy compliance, and error correction.
Blockchain-specific risks include data permanence preventing correction of errors or removal of inappropriate content, privacy compliance challenges where GDPR’s «right to be forgotten» conflicts with blockchain immutability, smart contract vulnerabilities where coding errors become permanent once deployed, consensus mechanism risks where attackers controlling sufficient nodes could manipulate the chain, and scalability limitations affecting transaction throughput and costs.
Risk assessment for blockchain evaluates unique factors including governance models determining decision-making for protocol changes, consensus mechanisms affecting security and performance, smart contract verification ensuring code operates as intended, private key management where key loss means permanent loss of access, and regulatory compliance navigating evolving legal frameworks. These assessments inform deployment decisions.
Risk mitigation strategies include permissioned blockchains limiting participation to known entities, off-chain storage keeping sensitive data outside the blockchain with only hashes stored on-chain, legal structures establishing conventional governance despite technical decentralization, formal verification mathematically proving smart contract correctness, and key management systems securing cryptographic credentials. These approaches address blockchain-specific vulnerabilities.
Option A is incorrect because blockchain introduces unique risks beyond traditional database concerns. Option C is wrong because printing costs are irrelevant to blockchain risk assessment. Option D is incorrect because office supply choices have no connection to blockchain technology risks.