Isaca CRISC Certified in Risk and Information Systems Control Exam Dumps and Practice Test Questions Set 11 Q151 — 165
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Question 151
An organization is conducting a business impact analysis. Which of the following should be identified FIRST?
A) Recovery time objectives
B) Critical business processes
C) Backup requirements
D) Disaster recovery procedures
Answer: B
Explanation:
Business Impact Analysis is a systematic process for understanding the consequences of disruptions to business operations and determining recovery priorities. Following proper BIA sequencing ensures comprehensive and accurate analysis.
Critical business processes should be identified first in a business impact analysis because all subsequent BIA activities depend on understanding which processes are essential to organizational operations. Process identification establishes the scope of analysis and ensures the BIA covers activities that matter most to business continuity. Without knowing which processes are critical, organizations cannot effectively determine recovery requirements or prioritize resources.
Process identification involves inventorying all business activities and determining their criticality based on factors including revenue generation, regulatory compliance, customer service, safety, and strategic importance. Stakeholder interviews with process owners and business units help identify processes and understand their interdependencies. The identification phase creates a comprehensive list of processes requiring impact analysis.
Once critical processes are identified, the BIA then analyzes each process to determine impact of disruption over time, recovery time objectives, recovery point objectives, and resource requirements. This sequential approach ensures analysis focuses on truly critical processes rather than attempting to analyze everything. Prioritization allows organizations to allocate limited BIA resources effectively.
Recovery time objectives are determined after identifying critical processes based on process-specific impact analysis. Backup requirements flow from understanding what data and systems support critical processes. Disaster recovery procedures are developed after understanding process criticality and recovery requirements. Critical business process identification represents the essential foundation for all subsequent BIA activities and must come first to ensure meaningful analysis.
Question 152
Which of the following is the PRIMARY reason for maintaining a risk register?
A) To satisfy audit requirements
B) To provide centralized risk information for decision-making
C) To document risk treatment plans
D) To assign risk ownership
Answer: B
Explanation:
Risk registers serve as central repositories for risk information supporting risk management activities across the organization. Understanding the primary purpose ensures risk registers are designed and maintained to deliver maximum value.
Providing centralized risk information for decision-making is the primary reason for maintaining a risk register. The risk register consolidates information about identified risks, assessments, responses, and status in a single location accessible to decision-makers. This centralization enables informed decisions about risk acceptance, resource allocation, strategic planning, and risk response prioritization. Decision-makers can review comprehensive risk information without gathering data from multiple sources.
Risk registers support various decision-making needs including board and executive risk oversight, operational risk management, project planning, strategic planning, resource allocation, and vendor selection. The register provides current risk status enabling stakeholders to understand the risk landscape and make choices considering risk exposure. Trend information shows whether risks are increasing or decreasing over time, informing strategic adjustments.
The register’s value comes from being a living document updated as risks evolve, new risks emerge, and responses are implemented. Regular review and updates ensure decision-makers have current information. The register format should facilitate analysis and reporting for different audiences including detailed information for risk managers and summary dashboards for executives and boards.
Satisfying audit requirements may be a secondary benefit but shouldn’t drive register design. Documenting treatment plans and assigning ownership are important register functions but serve the broader purpose of supporting decisions. Providing centralized risk information for decision-making represents the fundamental purpose that makes risk registers valuable tools for risk management and organizational governance.
Question 153
An organization has implemented a new control to mitigate a risk. What should be done NEXT?
A) Remove the risk from the risk register
B) Monitor the control effectiveness
C) Update the risk assessment
D) Notify stakeholders of risk elimination
Answer: B
Explanation:
Control implementation represents one step in the risk management lifecycle. Understanding proper post-implementation activities ensures controls actually deliver intended risk reduction and organizations verify effectiveness.
Monitoring control effectiveness should be done next after implementing a new control because implementation alone doesn’t guarantee the control operates as designed or achieves intended risk reduction. Monitoring verifies that controls function correctly in the production environment, are performed consistently, and reduce risk to expected levels. Initial monitoring is particularly important for new controls that haven’t been proven in the specific organizational context.
Effectiveness monitoring involves establishing metrics and procedures to evaluate control performance. For preventive controls, monitoring verifies they successfully block undesired activities. For detective controls, monitoring confirms they identify exceptions appropriately. Monitoring might include reviewing control execution logs, sampling transactions, testing control operation, or analyzing key control indicators that signal control health.
Early monitoring after implementation helps identify issues requiring adjustment. Controls might need tuning to reduce false positives, process refinements to improve efficiency, or configuration changes to address gaps. Prompt identification and correction of control weaknesses prevents situations where organizations believe risks are mitigated but controls aren’t actually effective.
Removing risks from the register is inappropriate as implementing controls reduces but typically doesn’t eliminate risk. Risk assessment updates should occur after verifying control effectiveness through monitoring. Notifying stakeholders of risk elimination is premature and inaccurate since residual risk remains. Monitoring control effectiveness represents the critical next step ensuring controls actually deliver expected risk reduction and identifying any necessary adjustments.
Question 154
Which of the following BEST describes inherent risk?
A) Risk remaining after controls are applied
B) Risk before any controls are implemented
C) Risk that cannot be mitigated
D) Risk transferred to a third party
Answer: B
Explanation:
Understanding different risk classifications is fundamental to risk assessment and management. Inherent risk represents a baseline understanding of risk exposure before considering risk responses.
Inherent risk is the risk that exists before any controls or risk mitigation measures are implemented. This concept represents the natural level of risk present in an activity, process, or system based on its inherent characteristics and operating environment. Inherent risk assessment considers factors like complexity, change rate, external dependencies, and environmental conditions without accounting for any protective measures the organization has deployed.
Assessing inherent risk provides important baseline information showing the organization’s risk exposure if controls fail or are absent. This assessment helps prioritize which risks require the strongest controls. High inherent risk areas justify greater control investment even if current controls are effective. Understanding inherent risk also helps evaluate whether control environments are appropriately designed for risk levels.
The relationship between inherent risk and residual risk informs control adequacy judgments. If inherent risk is high but residual risk is low, controls are effectively mitigating risk. If both inherent and residual risk are high, additional controls may be needed. The gap between inherent and residual risk demonstrates control effectiveness and helps justify control investments.
Risk remaining after controls are applied describes residual risk rather than inherent risk. Risk that cannot be mitigated describes risk characteristics but not the inherent risk concept. Transferred risk describes a risk response approach. Inherent risk specifically refers to risk levels before any controls are implemented, providing the baseline for evaluating control needs and effectiveness.
Question 155
An organization discovers that a vendor storing customer data has experienced a data breach. What should be the organization’s FIRST response?
A) Terminate the vendor contract
B) Assess the impact on the organization
C) Notify affected customers
D) Report to regulatory authorities
Answer: B
Explanation:
Third-party incidents require structured organizational responses that balance multiple concerns including customer protection, regulatory compliance, and business continuity. Proper response sequencing ensures effective incident management.
Assessing the impact on the organization should be the first response because effective subsequent actions depend on understanding what data was compromised, how many customers are affected, what systems or services are impacted, and what regulatory obligations are triggered. Impact assessment provides the factual foundation for all other response decisions including notification timing, regulatory reporting, and vendor relationship management.
Impact assessment involves gathering information from the vendor about the breach scope, determining which organizational data was affected, identifying impacted customers or stakeholders, evaluating potential consequences, and assessing whether additional organizational systems or data might be at risk. This investigation establishes the facts needed for informed decision-making about appropriate responses.
The assessment informs notification requirements by identifying which customers or stakeholders are affected and what information must be disclosed. It determines regulatory reporting obligations based on data types, affected individuals, and breach severity. Assessment results guide decisions about vendor relationship continuity considering breach severity and vendor response. Without understanding impact, the organization cannot make informed decisions about these critical responses.
Terminating vendor contracts is premature without understanding impact and may disrupt critical business operations. Customer notification and regulatory reporting are important but timing and content depend on impact assessment findings. Many jurisdictions specify notification timelines starting when breaches are discovered and assessed. Assessing impact represents the essential first step enabling effective subsequent incident response actions.
Question 156
Which of the following is the MOST important factor when determining risk ownership?
A) Technical expertise in the risk area
B) Authority to make decisions about risk treatment
C) Availability to monitor the risk
D) Experience with risk management processes
Answer: B
Explanation:
Risk ownership assignment is critical for accountability and effective risk management. Understanding the most important ownership factor ensures risks are assigned to individuals who can effectively manage them.
Authority to make decisions about risk treatment is the most important factor when determining risk ownership because risk owners must be able to allocate resources, implement controls, accept residual risk, and make tradeoff decisions about risk responses. Without decision-making authority, individuals cannot fulfill risk ownership responsibilities even if they have technical knowledge or availability. Authority enables risk owners to take necessary actions to manage risks.
Risk owners typically are business managers responsible for areas where risks originate or impact operations. They have budget authority for their areas, control resources, and can direct personnel to implement risk responses. This positional authority enables risk owners to prioritize risk treatment, allocate funding for controls, and balance risk management with other business objectives. Authority aligns accountability with capability to act.
Effective risk ownership requires individuals who understand the business context of risks and can evaluate cost-benefit tradeoffs. They must weigh risk reduction benefits against implementation costs and operational impacts. These business decisions require managerial authority beyond technical expertise. Risk owners make judgment calls about acceptable risk levels and appropriate response strategies for their business areas.
Technical expertise is valuable but can be provided by advisors supporting risk owners. Availability to monitor risks is important but can be delegated to others reporting to the risk owner. Risk management process experience is helpful but can be developed through training and support. Authority to make decisions about risk treatment represents the fundamental requirement enabling individuals to effectively fulfill risk ownership responsibilities.
Question 157
An organization is implementing artificial intelligence in its customer service operations. Which type of risk assessment should be prioritized?
A) Operational risk assessment
B) Compliance risk assessment
C) Emerging technology risk assessment
D) Strategic risk assessment
Answer: C
Explanation:
Different technologies present different risk profiles requiring appropriate assessment approaches. Emerging technologies like artificial intelligence require specialized risk assessment addressing unique characteristics and uncertainties.
Emerging technology risk assessment should be prioritized when implementing artificial intelligence because AI presents novel risks that traditional risk assessment approaches may not adequately address. AI systems introduce unique concerns including algorithmic bias, explainability challenges, training data quality, model drift, ethical considerations, and regulatory uncertainty. Specialized assessment approaches address these AI-specific risks.
AI risk assessment examines factors including data privacy implications of training data collection, potential discrimination from biased algorithms, accuracy and reliability of AI decisions, transparency and explainability of automated decisions, security vulnerabilities in AI systems, and compliance with emerging AI regulations. These considerations require expertise in AI technology and understanding of unique AI risks beyond traditional operational or technology risks.
The emerging nature of AI means limited organizational experience, evolving best practices, and uncertain regulatory landscape. Risk assessment must account for these uncertainties and include scenario planning for potential future risks. Assessment should consider ethical dimensions of AI deployment including fairness, accountability, and societal impact. Stakeholder engagement with customers, employees, and affected parties provides important risk insights.
Operational risk assessment addresses general operational concerns but may miss AI-specific issues. Compliance risk assessment is important but regulations are still evolving. Strategic risk assessment examines business strategy but not technology-specific risks. Emerging technology risk assessment provides the specialized focus needed to identify and evaluate the unique risks associated with artificial intelligence implementation.
Question 158
Which of the following provides the BEST evidence that an organization’s risk management process is mature?
A) Risk assessments are conducted annually
B) Risk management is integrated into business processes
C) A chief risk officer has been appointed
D) Risk management software has been implemented
Answer: B
Explanation:
Risk management maturity reflects how embedded risk considerations are in organizational culture and decision-making. Understanding maturity indicators helps organizations assess and improve their risk management capabilities.
Risk management integration into business processes provides the best evidence of maturity because it demonstrates that risk considerations are embedded in how the organization operates rather than being separate activities. Mature risk management means risks are considered during strategic planning, project approvals, vendor selection, product development, and daily operations. Integration ensures risk management influences decisions rather than just documenting risks after decisions are made.
Integration manifests in multiple ways including risk considerations in approval workflows, risk-based performance metrics, risk discussions in management meetings, and risk accountability in job descriptions. Employees at all levels understand their risk management responsibilities and execute them as part of normal activities. Risk management becomes organizational culture rather than a compliance exercise performed by specialists.
Mature organizations embed risk management in project management methodologies, change management processes, vendor management, and strategic planning. Business cases include risk analysis. Decisions consider risk-return tradeoffs. Performance management includes risk objectives. This pervasive integration demonstrates that risk management has moved beyond awareness to active practice influencing organizational behavior.
Annual risk assessments indicate some risk management activity but don’t demonstrate integration. Appointing a chief risk officer provides governance structure but doesn’t ensure integration. Risk management software is a tool but doesn’t prove integration into business processes. Risk management integration into business processes represents the hallmark of mature risk management where risk considerations are fundamental to how the organization operates.
Question 159
An organization’s risk appetite statement should be PRIMARILY based on which of the following?
A) Industry benchmarks
B) Regulatory requirements
C) Organizational objectives and strategy
D) Historical loss data
Answer: C
Explanation:
Risk appetite defines how much risk an organization is willing to accept in pursuit of objectives. Understanding what should drive risk appetite ensures appropriate alignment between risk-taking and organizational direction.
Organizational objectives and strategy should primarily drive risk appetite because risk appetite must align with what the organization is trying to achieve and how it plans to compete. Different strategies require different risk profiles. Growth-focused strategies may require higher risk appetite while stability-focused strategies suggest lower appetite. Risk appetite enables strategy execution by defining acceptable risk boundaries for strategic initiatives.
Strategy determines which risks are necessary to accept for success. Organizations pursuing innovation strategies accept higher technology and market risks. Conservative strategies emphasize risk minimization. International expansion strategies require accepting country and currency risks. Risk appetite articulates how much of these strategy-enabling risks the organization will accept considering its capabilities, resources, and competitive position.
Risk appetite also considers organizational capacity to absorb losses, stakeholder expectations, and competitive dynamics. However, these factors are evaluated in context of strategic objectives. Organizations set risk appetite to enable strategy execution while remaining within their capability to manage risks. The appetite statement guides tactical decisions ensuring consistency with strategic direction.
Industry benchmarks provide reference points but different organizations pursue different strategies requiring different risk profiles. Regulatory requirements establish minimum standards but don’t determine appropriate appetite. Historical loss data informs understanding of risk exposure but doesn’t dictate future risk-taking. Organizational objectives and strategy represent the primary drivers for risk appetite ensuring risk-taking aligns with organizational direction.
Question 160
Which of the following is MOST important when developing key risk indicators for cybersecurity risks?
A) KRIs should be reviewed annually
B) KRIs should be aligned with business objectives
C) KRIs should be automated
D) KRIs should predict potential risk events
Answer: D
Explanation:
Key Risk Indicators serve as early warning systems for increasing risk exposure. Understanding the most critical KRI characteristic ensures organizations develop indicators that effectively support proactive risk management.
KRIs should predict potential risk events as this predictive capability is the fundamental purpose of risk indicators. Effective KRIs provide leading indicators signaling when risk levels are increasing before incidents occur, enabling proactive intervention. For cybersecurity risks, predictive KRIs might include metrics like percentage of unpatched systems, failed backup percentages, or phishing click rates that indicate vulnerability before actual compromises occur.
Predictive KRIs differ from lagging indicators that measure events after they happen. Incident counts are lagging indicators showing problems that already occurred. Predictive indicators measure conditions making incidents more likely, providing opportunity for prevention. For example, increasing percentage of systems with administrative privileges indicates rising risk before privilege abuse occurs. Growing attack surface from new internet-facing systems signals risk before exploitation.
Predictive capability requires KRIs to measure causal factors or precursor conditions rather than outcomes. The indicators must change detectably before risk events occur, providing warning time sufficient for response. KRI thresholds should trigger investigation and action while there’s still time to prevent incidents. This early warning enables the proactive risk management that justifies KRI investment.
Annual review is important but frequency doesn’t define KRI effectiveness. Alignment with business objectives is valuable but secondary to predictive capability. Automation improves efficiency but manual KRIs can still be effective. Predicting potential risk events represents the most important KRI characteristic enabling proactive risk management through early warning of increasing exposure.
Question 161
An organization has implemented compensating controls due to the high cost of recommended controls. What should be done to address the residual risk?
A) Document the risk acceptance
B) Implement additional controls
C) Transfer the risk to a third party
D) Conduct a new risk assessment
Answer: A
Explanation:
Compensating controls provide alternative risk mitigation when primary controls are not feasible. Understanding how to properly address remaining risk ensures appropriate accountability and transparency about risk exposure.
Documenting the risk acceptance addresses the residual risk remaining after implementing compensating controls. When compensating controls are less effective than recommended controls, residual risk exceeds levels that would exist with primary controls. This residual risk must be explicitly accepted by appropriate management with authority to make such decisions. Documentation creates accountability and ensures informed decision-making about remaining exposure.
Risk acceptance documentation should include assessment of residual risk levels, business justification for accepting the risk, explanation of why primary controls weren’t implemented, description of compensating controls in place, approval by appropriate authority, and conditions under which the acceptance will be reconsidered. This documentation ensures stakeholders understand risk exposure and decisions are made transparently.
Compensating controls represent a valid risk management approach when primary controls are cost-prohibitive, technically infeasible, or operationally disruptive. Organizations must balance risk reduction with practical constraints. However, conscious acceptance of residual risk through proper approval and documentation is essential. Without documentation, organizations may not realize their risk exposure or maintain appropriate oversight.
Implementing additional controls may not be feasible given the cost constraints that led to compensating controls. Risk transfer may not be available or cost-effective for all residual risks. Conducting a new assessment doesn’t address the residual risk that exists. Documenting the risk acceptance provides appropriate accountability and transparency about the residual risk remaining after implementing compensating controls.
Question 162
Which of the following is the PRIMARY benefit of conducting regular risk assessments?
A) Ensuring compliance with regulations
B) Identifying changes in the risk environment
C) Reducing the cost of controls
D) Satisfying audit requirements
Answer: B
Explanation:
Regular risk assessments maintain current understanding of organizational risk exposure as conditions change. Understanding the primary benefit ensures organizations invest appropriately in ongoing assessment activities.
Identifying changes in the risk environment is the primary benefit of conducting regular risk assessments because risk is dynamic and conditions constantly evolve. New threats emerge, business environments change, technologies advance, regulations evolve, and organizational activities shift. Regular assessments ensure risk understanding remains current, enabling organizations to adapt risk responses to changing conditions rather than managing based on outdated information.
Risk environment changes include emerging threats like new attack methods or vulnerabilities, business changes like new products or markets, technology changes like cloud adoption or new systems, regulatory changes like new requirements, and organizational changes like mergers or restructuring. Each change potentially affects risk levels requiring assessment updates to maintain accurate risk understanding.
Regular assessments also identify when existing risks increase or decrease. Controls may degrade over time, threat landscapes shift, or business criticality changes. Periodic reassessment detects these changes enabling appropriate risk response adjustments. Without regular assessment, organizations manage risks based on historical understanding that may no longer reflect reality.
Assessment frequency should align with rate of change in the risk environment. Rapidly changing areas require more frequent assessment. Critical risks warrant more frequent monitoring. The regular cadence ensures systematic review preventing risk management from becoming stale.
Ensuring compliance and satisfying audits may be secondary benefits but don’t capture the fundamental value. Reducing control costs is not a primary assessment purpose. Identifying changes in the risk environment represents the essential benefit enabling organizations to maintain current risk understanding and adapt responses to evolving conditions.
Question 163
An organization is selecting a risk management framework. Which factor should be the PRIMARY consideration?
A) Framework popularity in the industry
B) Alignment with organizational culture and structure
C) Framework certification requirements
D) Vendor support availability
Answer: B
Explanation:
Risk management frameworks provide structured approaches to managing risk. Selecting appropriate frameworks requires considering multiple factors to ensure effective implementation and adoption.
Alignment with organizational culture and structure is the primary consideration when selecting a risk management framework because frameworks must fit how the organization operates to be successfully adopted. Frameworks incompatible with organizational culture face resistance and struggle to gain traction. Structure alignment ensures the framework integrates with existing governance, reporting relationships, and decision-making processes rather than requiring disruptive organizational changes.
Cultural alignment considers factors including risk appetite, formality preferences, centralization versus decentralization, and decision-making styles. Organizations with formal hierarchical cultures need frameworks with clear authority structures and defined processes. Entrepreneurial cultures need flexible frameworks supporting innovation. Framework language, complexity, and approach should resonate with organizational culture to facilitate acceptance.
Structural alignment ensures the framework fits existing organizational design. Frameworks should leverage existing committees, reporting lines, and governance structures rather than requiring parallel structures. Integration with strategic planning, project management, and operational processes is easier when frameworks align with current structures. Misalignment creates friction and implementation challenges.
Framework popularity indicates market acceptance but doesn’t ensure organizational fit. Different organizations have different needs making one-size-fits-all recommendations ineffective. Certification requirements may be relevant for specific industries but don’t determine general suitability. Vendor support is valuable but secondary to fundamental fit. Alignment with organizational culture and structure represents the primary consideration ensuring framework adoption and effective implementation.
Question 164
An organization has outsourced its IT operations. Which of the following is the MOST important control to include in the service level agreement?
A) Disaster recovery testing requirements
B) Right to audit vendor controls
C) Penalty clauses for non-performance
D) Service availability requirements
Answer: B
Explanation:
Outsourcing transfers operational responsibility but not organizational accountability for risks. Service level agreements must include provisions enabling organizations to maintain appropriate oversight and assurance over outsourced operations.
Right to audit vendor controls is the most important control to include in the service level agreement because it enables the organization to independently verify that vendors are operating controls effectively and meeting security, compliance, and operational requirements. Without audit rights, organizations must rely solely on vendor representations about control effectiveness, creating information asymmetry and limiting ability to validate risk management.
Audit rights typically include ability to conduct audits directly, engage third parties to audit on behalf of the organization, or receive copies of independent audit reports like SOC 2 reports covering vendor controls. These rights should specify audit scope, frequency, notification requirements, and access to personnel and documentation. Comprehensive audit rights provide assurance mechanisms essential for managing third-party risk.
Audit rights enable verification that vendors maintain security controls protecting organizational data, comply with regulatory requirements, operate business continuity measures, and maintain agreed-upon service levels. Regular audits or audit reports provide ongoing assurance rather than one-time due diligence. Audit findings inform risk assessments and decisions about continuing vendor relationships.
Disaster recovery testing requirements are important but specific to one risk area. Penalty clauses provide financial recourse but don’t prevent issues or provide assurance. Service availability requirements define performance expectations but don’t enable verification. Right to audit vendor controls represents the most important control enabling comprehensive oversight and assurance over all aspects of outsourced operations.
Question 165
Which of the following BEST indicates that risk management practices are effective?
A) Risk assessments are completed on schedule
B) Risk mitigation plans are documented
C) Risk levels are trending within acceptable tolerance
D) Risk management policies are approved by the board
Answer: C
Explanation:
Risk management effectiveness should be measured by outcomes rather than activities. Understanding the best effectiveness indicator ensures organizations focus on results that actually reduce risk exposure.
Risk levels trending within acceptable tolerance best indicates effective risk management practices because it demonstrates that risk management activities are achieving their fundamental purpose of maintaining risk within organizational appetite and tolerance. This outcome measure shows risk management is producing desired results rather than just completing activities. Risks remaining within tolerance indicates controls are effective and risk responses are appropriate.
Effective risk management should cause risk levels to stabilize or decrease over time as controls mature and risk responses take effect. Trending analysis shows whether risk trajectories are favorable or concerning. Risks consistently within tolerance demonstrate that organizations are successfully managing their risk exposure. Sustained achievement of risk objectives provides concrete evidence of effectiveness.
This outcome-based measure captures the collective impact of all risk management activities including risk identification, assessment, response, and monitoring. Activities like assessments and documentation are important but don’t alone prove effectiveness. Only when these activities result in appropriate risk levels can risk management be considered truly effective.
Risk trending within tolerance also indicates risk management maturity because it suggests ongoing monitoring, responsive risk management, and effective governance. Organizations tracking risk trends demonstrate commitment to managing risk as a continuous process rather than periodic exercises.
Completing assessments on schedule shows process compliance but not effectiveness. Documented mitigation plans are activities not outcomes. Board-approved policies provide governance foundation but don’t demonstrate effectiveness. Risk levels trending within acceptable tolerance represents the best indicator that risk management practices are achieving their intended purpose.