The BEST way to manage Fourth-Nth Party risk is:
Include a provision in the vender contract requiring the vendor to provide notice and obtain written consent before outsourcing any service
Include a provision in the contract prohibiting the vendor from outsourcing any service which includes access to confidential data or systems
Incorporate notification and approval contract provisions for subcontracting that require evidence of due diligence as defined by a TPRM program
Require the vendor to maintain a cyber-insurance policy for any service that is outsourced which includes access to confidential data or systems
Fourth-Nth party risk refers to the potential threats and vulnerabilities associated with the subcontractors, vendors, or service providers of an organization’s direct third-party partners. This can create a complex network of dependencies and exposures that can affect the organization’s security, data protection, and business resilience. To manage this risk effectively, organizations should conduct comprehensive due diligence on their extended vendor and supplier network, and include contractual stipulations that require notification and approval for any subcontracting activities. This way, the organization can ensure that the subcontractors meet the same standards and expectations as the direct third-party partners, and that they have adequate controls and safeguards in place to protect the organization’s data and systems. Additionally, the organization should monitor and assess the performance and compliance of the subcontractors on a regular basis, and update the contract provisions as needed to reflect any changes in the risk environment. References:
In which phase of the TPRM lifecycle should terms for return or destruction of data be defined and agreed upon?
During contract negotiation
At third party selection and initial due diligence
When deploying ongoing monitoring
At termination and exit
Terms for return or destruction of data should be defined and agreed upon during contract negotiation, as this is the phase where the organization and the third party establish the expectations, obligations, and responsibilities for the relationship, including the handling of data. According to the Shared Assessments CTPRP Study Guide, contract negotiation is the phase where "the organization and the third party negotiate and execute a contract that clearly defines the expectations and responsibilities of both parties, including the scope of work, service level agreements, performance measures, reporting requirements, compliance obligations, security and privacy controls, incident response procedures, dispute resolution mechanisms, termination rights, and other relevant terms and conditions."1 One of the key contractual terms that should be addressed is the return or destruction of data, which specifies how the third party will return or dispose of the organization’s data at the end of the relationship, or upon request, in a secure and timely manner. This term is important for ensuring the organization’s data protection, confidentiality, and compliance, as well as reducing the risk of data breaches, leaks, or misuse by the third party or unauthorized parties.
The other phases of the TPRM lifecycle are not the best choices for defining and agreeing upon terms for return or destruction of data, because:
References:
Which statement provides the BEST description of inherent risk?
inherent risk is the amount of risk an organization can incur when there is an absence of controls
Inherent risk is the level of risk triggered by outsourcing & product or service
Inherent risk is the amount of risk an organization can accept based on their risk tolerance
Inherent risk is the level of risk that exists with all of the necessary controls in place
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:
Which statement is FALSE regarding the foundational requirements of a well-defined third party risk management program?
We conduct onsite or virtual assessments for all third parties
We have defined senior and executive management accountabilities for oversight of our TPRM program
We have established vendor risk ratings and classifications based on a tiered hierarchy
We have established Management and Board-level reporting to enable risk-based decisionmaking
A well-defined third party risk management program does not require conducting onsite or virtual assessments for all third parties, as this would be impractical, costly, and inefficient. Instead, a TPRM program should adopt a risk-based approach to determine the frequency, scope, and depth of assessments based on the inherent and residual risks posed by each third party. This means that some third parties may require more frequent and comprehensive assessments than others, depending on factors such as the nature, scope, and criticality of their services, the sensitivity and volume of data they access or process, the regulatory and contractual obligations they must comply with, and the results of previous assessments and monitoring activities. A risk-based approach to assessments allows an organization to allocate its resources and efforts more effectively and efficiently, while also ensuring that the most significant risks are adequately addressed and mitigated. References:
Which of the following BEST reflects the risk of a ‘shadow IT" function?
“Shadow IT" functions often fail to detect unauthorized use of information assets
“Shadow IT" functions often lack governance and security oversight
inability to prevent "shadow IT’ functions from using unauthorized software solutions
Failure to implement strong security controls because IT is executed remotely
Shadow IT refers to the use of IT systems, services, or devices that are not authorized, approved, or supported by the official IT department. Shadow IT can pose significant risks to an organization’s data security, compliance, performance, and reputation. One of the main risks of shadow IT is that it often lacks governance and security oversight. This means that the shadow IT functions may not follow the established policies, standards, and best practices for IT management, such as data protection, access control, encryption, backup, patching, auditing, and reporting. This can expose the organization to various threats, such as data breaches, cyberattacks, malware infections, legal liabilities, regulatory fines, and reputational damage. Additionally, shadow IT can create operational inefficiencies, compatibility issues, duplication of efforts, and increased costs for the organization.
According to the web search results from the search_web tool, shadow IT is a common and growing phenomenon in many organizations, especially with the proliferation of cloud-based services and applications. Some of the articles suggest the following best practices for managing and mitigating shadow IT risks123:
Therefore, the verified answer to the question is B. “Shadow IT" functions often lack governance and security oversight.
References:
Physical access procedures and activity logs should require all of the following EXCEPT:
Require multiple access controls for server rooms and data centers
Require physical access logs to be retained indefinitely for audit purposes
Record successful and unsuccessful attempts including investigation of unsuccessful access attempts
Include a process to trigger review of the logs after security events
Physical access procedures and activity logs are important components of third-party risk management, as they help to ensure the security and integrity of the physical assets and data of the organization and its third parties. However, requiring physical access logs to be retained indefinitely for audit purposes is not a best practice, as it may pose legal, regulatory, and operational challenges. According to the Supplemental Examination Procedures for Risk Management of Third-Party Relationships, physical access logs should be retained for a reasonable period of time, consistent with the organization’s policies and procedures, and in compliance with applicable laws and regulations1. Retaining physical access logs indefinitely may increase the risk of unauthorized access, data breaches, privacy violations, and litigation2. Therefore, the statement B is the correct answer, as it is the only one that does not reflect a best practice for physical access procedures and activity logs.
References:
An IT change management approval process includes all of the following components EXCEPT:
Application version control standards for software release updates
Documented audit trail for all emergency changes
Defined roles between business and IT functions
Guidelines that restrict approval of changes to only authorized personnel
Application version control standards for software release updates are not part of the IT change management approval process, but rather a technical aspect of the software development lifecycle. The IT change management approval process is a formal and structured way of evaluating, authorizing and scheduling changes to IT systems and infrastructure, based on predefined criteria and roles. The IT change management approval process typically includes the following components123:
Which of the following statements BEST represent the relationship between incident response and incident notification plans?
Cybersecurity incident response programs have the same scope and objectives as privacy incident notification procedures
All privacy and security incidents should be treated alike until analysis is performed to quantify the number of records impacted
Security incident response management is only included in crisis communication for externally reported events
A security incident may become a security breach based upon analysis and trigger the organization's incident notification or crisis communication process
Incident response and incident notification are two related but distinct processes that organizations should follow when dealing with security incidents. Incident response is the process of identifying, containing, analyzing, eradicating, and recovering from security incidents, while incident notification is the process of communicating the relevant information about the incident to the appropriate internal and external stakeholders, such as senior management, regulators, customers, and media12.
Not all security incidents are security breaches, which are defined as unauthorized access to or disclosure of sensitive or confidential information that could result in harm to the organization or individuals3. A security incident may become a security breach based on the analysis of the impact, scope, and severity of the incident, as well as the applicable legal and regulatory requirements. When a security breach is confirmed or suspected, the organization should trigger its incident notification or crisis communication process, which should include the following elements:
Incident notification and communication are critical for managing the reputation, trust, and compliance of the organization, as well as for mitigating the potential legal, financial, and operational consequences of a security breach. References:
Which of the following actions reflects the first step in developing an emergency response plan?
Conduct an assessment that includes an inventory of the types of events that have the greatest potential to trigger an emergency response plan
Consider work-from-home parameters in the emergency response plan
incorporate periodic crisis management team tabletop exercises to test different scenarios
Use the results of continuous monitoring tools to develop the emergency response plan
An emergency response plan (ERP) is a document that outlines the procedures and actions to be taken by an organization in the event of a disruptive incident that threatens its operations, assets, reputation, or stakeholders1. An ERP should be aligned with the organization’s business continuity and disaster recovery plans, and should cover the roles and responsibilities, communication channels, escalation processes, resources, and recovery strategies for different types of emergencies2.
The first step in developing an ERP is to conduct an assessment that includes an inventory of the types of events that have the greatest potential to trigger an ERP3. This assessment should consider the likelihood and impact of various scenarios, such as natural disasters, cyberattacks, pandemics, civil unrest, terrorism, or supply chain disruptions, and identify the critical functions, processes, assets, and dependencies that could be affected by these events4. The assessment should also evaluate the existing capabilities and gaps in the organization’s preparedness and response, and prioritize the areas that need improvement or enhancement5. The assessment should be based on a comprehensive risk analysis and a business impact analysis, and should involve input from relevant stakeholders, such as senior management, business units, IT, security, legal, compliance, human resources, and third parties.
The other options are not the first step in developing an ERP, but rather subsequent or complementary steps that should be performed after the initial assessment. Considering work-from-home parameters, incorporating periodic crisis management team tabletop exercises, and using the results of continuous monitoring tools are all important aspects of an ERP, but they are not the starting point for creating one. These steps should be based on the findings and recommendations of the assessment, and should be updated and tested regularly to ensure the effectiveness and relevance of the ERP. References: 1: What is an Emergency Response Plan? | IBM 2: Emergency Response Plan | Ready.gov 3: 8 Steps to Building a Third-Party Incident Response Plan | Prevalent 4: How to create an effective business continuity plan | CIO 5: Emergency Response Planning: 4 Steps to Creating a Plan : Third-Party Risk Management: Final Interagency Guidance : Improving Third-Party Incident Response | Prevalent
You are updating program requirements due to shift in use of technologies by vendors to enable hybrid work. Which statement is LEAST likely to represent components of an Asset
Management Program?
Asset inventories should include connections to external parties, networks, or systems that process data
Each asset should include an organizational owner who is responsible for the asset throughout its life cycle
Assets should be classified based on criticality or data sensitivity
Asset inventories should track the flow or distribution of items used to fulfill products and Services across production lines
Asset management is the process of identifying, tracking, and managing the physical and digital assets of an organization. An asset management program is a set of policies, procedures, and tools that help to ensure the optimal use, security, and disposal of assets. According to the Shared Assessments CTPRP Study Guide1, an asset management program should include the following components:
The statement that is least likely to represent a component of an asset management program is D. Asset inventories should track the flow or distribution of items used to fulfill products and Services across production lines. This statement describes a supply chain management function, not an asset management function. Supply chain management is the process of planning, coordinating, and controlling the flow of materials, information, and services from suppliers to customers. Supply chain management may involve some aspects of asset management, such as inventory control, quality assurance, or vendor risk management, but it is not the same as asset management . Asset management focuses on the assets that the organization owns or uses, not the assets that the organization produces or delivers.
References:
An organization has experienced an unrecoverable data loss event after restoring a system. This is an example of:
A failure to conduct a Root Cause Analysis (RCA)
A failure to meet the Recovery Time Objective (RTO)
A failure to meet the Recovery Consistency Objective (RCO)
A failure to meet the Recovery Point Objective (RPO)
An unrecoverable data loss event after restoring a system is indicative of a failure to meet the Recovery Point Objective (RPO). The RPO represents the maximum tolerable period in which data might be lost due to an incident and is a critical component of an organization's disaster recovery and business continuity planning. If data restoration efforts are unsuccessful and lead to unrecoverable data loss, it means that the organization's data backup and recovery processes were insufficient to meet the defined RPO, leading to a loss of data beyond the acceptable threshold. This situation underscores the importance of implementing effective data backup and recovery strategies that align with the organization's RPO to minimize data loss and ensure business continuity in the event of a disruption.
References:
Which statement is TRUE regarding the use of questionnaires in third party risk assessments?
The total number of questions included in the questionnaire assigns the risk tier
Questionnaires are optional since reliance on contract terms is a sufficient control
Assessment questionnaires should be configured based on the risk rating and type of service being evaluated
All topic areas included in the questionnaire require validation during the assessment
 Questionnaires are one of the most common and effective tools for conducting third party risk assessments. They help organizations gather information about the security and compliance practices of their vendors and service providers, as well as identify any gaps or weaknesses that may pose a risk to the organization. However, not all questionnaires are created equal. Depending on the nature and scope of the third party relationship, different types and levels of questions may be required to adequately assess the risk. Therefore, it is important to configure the assessment questionnaires based on the risk rating and type of service being evaluated12.
The risk rating of a third party is determined by various factors, such as the criticality of the service they provide, the sensitivity of the data they handle, the regulatory requirements they must comply with, and the potential impact of a breach or disruption on the organization. The higher the risk rating, the more detailed and comprehensive the questionnaire should be. For example, a high-risk third party that processes personal or financial data may require a questionnaire that covers multiple domains of security and privacy, such as data protection, encryption, access control, incident response, and audit. A low-risk third party that provides a non-critical service or does not handle sensitive data may require a questionnaire that covers only the basic security controls, such as firewall, antivirus, and password policy12.
The type of service that a third party provides also influences the configuration of the questionnaire. Different services may have different security and compliance standards and best practices that need to be addressed. For example, a third party that provides cloud-based services may require a questionnaire that covers topics such as cloud security architecture, data residency, service level agreements, and disaster recovery. A third party that provides software development services may require a questionnaire that covers topics such as software development life cycle, code review, testing, and vulnerability management12.
By configuring the assessment questionnaires based on the risk rating and type of service being evaluated, organizations can ensure that they ask the right questions to the right third parties, and obtain relevant and meaningful information to support their risk management decisions. Therefore, the statement that assessment questionnaires should be configured based on the risk rating and type of service being evaluated is TRUE12. References: 1: How to Use SIG Questionnaires for Better Third-Party Risk Management 2: Third-party risk assessment questionnaires - KPMG India
When working with third parties, which of the following requirements does not reflect a “Zero Trust" approach to access management?
Utilizing a solution that allows direct access by third parties to the organization's network
Ensure that access is granted on a per session basis regardless of network location, user, or device
Implement device monitoring, continual inspection and monitoring of logs/traffic
Require that all communication is secured regardless of network location
A Zero Trust approach to access management is based on the principle of verifying every access request as if it originates from an open network, regardless of the source, destination, or context. This means that no implicit trust is granted based on network location, user identity, or device status. Instead, every access request is evaluated based on multiple factors, such as user credentials, device health, data sensitivity, and threat intelligence. A Zero Trust approach also requires that all communication is encrypted and protected, and that access is granted on a per session basis with the least privilege principle123.
Utilizing a solution that allows direct access by third parties to the organization’s network does not reflect a Zero Trust approach, because it implies that the network perimeter is a reliable boundary for security and trust. This assumption is risky, because it exposes the organization to potential breaches and attacks from compromised or malicious third parties, who may have access to sensitive data and resources without proper verification or protection. A Zero Trust approach would require that third parties use secure and isolated channels to access the organization’s network, such as VPNs, proxies, or gateways, and that their access is monitored and controlled based on granular policies and conditions123. References:
An outsourcer's vendor risk assessment process includes all of the following EXCEPT:
Establishing risk evaluation criteria based on company policy
Developing risk-tiered due diligence standards
Setting remediation timelines based on the severity level of findings
Defining assessment frequency based on resource capacity
An outsourcer’s vendor risk assessment process should include all the steps mentioned in options A, B, and C, as they are essential for ensuring a consistent, comprehensive, and effective evaluation of the vendor’s performance, compliance, and risk profile. However, option D is not a necessary or recommended part of the vendor risk assessment process, as it does not reflect the actual level of risk posed by the vendor, but rather the availability of resources within the outsourcer’s organization. Defining assessment frequency based on resource capacity could lead to under-assessing or over-assessing vendors, depending on the outsourcer’s workload, budget, and staff. This could result in missing critical issues, wasting time and money, or creating gaps in the vendor oversight program. Therefore, option D is the correct answer, as it is the only one that does not belong to the vendor risk assessment process. References: The following resources support the verified answer and explanation:
An IT asset management program should include all of the following components EXCEPT:
Maintaining inventories of systems, connections, and software applications
Defining application security standards for internally developed applications
Tracking and monitoring availability of vendor updates and any timelines for end of support
Identifying and tracking adherence to IT asset end-of-life policy
 An IT asset management program is a set of processes and tools that help an organization manage its IT assets throughout their lifecycle, from acquisition to disposal. An IT asset management program should include the following components1234:
Defining application security standards for internally developed applications is not a component of an IT asset management program, but rather a component of an application development and security program. An application development and security program is a set of processes and tools that help an organization design, develop, test, deploy, and maintain secure and reliable applications, whether they are internally developed or acquired from external sources. An application development and security program should include the following components5 :
References:
Which of the following indicators is LEAST likely to trigger a reassessment of an existing vendor?
Change in vendor location or use of new fourth parties
Change in scope of existing work (e.g., new data or system access)
Change in regulation that impacts service provider requirements
Change at outsourcer due to M&A
 This answer is correct because a change at outsourcer due to merger and acquisition (M&A) is the least likely indicator to trigger a reassessment of an existing vendor. This is because the outsourcer is not the direct vendor of the organization, but rather a third party that the vendor uses to perform some of its services. Therefore, the impact of the change at the outsourcer on the vendor’s performance and risk level may not be significant or immediate. However, the other indicators (A, B, and C) are more likely to trigger a reassessment of an existing vendor, as they directly affect the vendor’s operations, capabilities, and compliance status. For example:
Which of the following BEST reflects components of an environmental controls testing program?
Scheduling testing of building access and intrusion systems
Remote monitoring of HVAC, Smoke, Fire, Water or Power
Auditing the CCTV backup process and card-key access process
Conducting periodic reviews of personnel access controls and building intrusion systems
Remote monitoring of HVAC, Smoke, Fire, Water, or Power systems best reflects components of an environmental controls testing program. These systems are critical to ensuring the physical security and operational integrity of data centers and IT facilities. Environmental controls testing programs are designed to verify that these systems are functioning correctly and can effectively respond to environmental threats. This includes monitoring temperature and humidity (HVAC), detecting smoke or fire, preventing water damage, and ensuring uninterrupted power supply. Regular testing and monitoring of these systems help prevent equipment damage, data loss, and downtime due to environmental factors.
References:
When conducting an assessment of a third party's physical security controls, which of the following represents the innermost layer in a ‘Defense in Depth’ model?
Public internal
Restricted entry
Private internal
Public external
In the ‘Defense in Depth’ security model, the innermost layer typically focuses on protecting the most sensitive and critical assets, which are often categorized as 'Private internal'. This layer includes security controls and measures that are designed to safeguard the core, confidential aspects of an organization's infrastructure and data. It encompasses controls such as access controls, encryption, and monitoring of sensitive systems and data to prevent unauthorized access and ensure data integrity and confidentiality. The 'Private internal' layer is crucial for maintaining the security of critical information and systems that are essential to the organization's operations and could have the most significant impact if compromised. Implementing robust security measures at this layer is vital for mitigating risks associated with physical access to critical infrastructure and sensitive information.
References:
Which vendor statement provides the BEST description of the concept of least privilege?
We require dual authorization for restricted areas
We grant people access to the minimum necessary to do their job
We require separation of duties for performance of high risk activities
We limit root and administrator access to only a few personnel
The concept of least privilege is a security principle that requires giving each user, service, and application only the permissions needed to perform their work and no more12. It is one of the most important concepts in network and system security, as it reduces the attack surface and the risk of unauthorized access, data breaches, and malware infections12. The statement B best describes this concept, as it implies that the vendor follows the principle of least privilege by granting people access to the minimum necessary to do their job. The other statements do not capture the essence of the concept, as they either describe other security practices (such as dual authorization and separation of duties) or limit the scope of the concept to a specific type of access (such as root and administrator access).
References:
Which statement is TRUE regarding artifacts reviewed when assessing the Cardholder Data Environment (CDE) in payment card processing?
The Data Security Standards (DSS) framework should be used to scope the assessment
The Report on Compliance (ROC) provides the assessment results completed by a qualified security assessor that includes an onsite audit
The Self-Assessment Questionnaire (SAQ) provides independent testing of controls
A System and Organization Controls (SOC) report is sufficient if the report addresses the same location
The Cardholder Data Environment (CDE) is the part of the network that stores, processes, or transmits cardholder data or sensitive authentication data, as well as any connected or security-impacting systems123. The CDE is subject to the Payment Card Industry Data Security Standard (PCI DSS), which is a set of requirements and guidelines for ensuring the security and compliance of payment card transactions123. The PCI DSS defines various artifacts that are reviewed when assessing the CDE, such as:
References:Â The following resources support the verified answer and explanation:
Which activity BEST describes conducting due diligence of a lower risk vendor?
Accepting a service providers self-assessment questionnaire responses
Preparing reports to management regarding the status of third party risk management and remediation activities
Reviewing a service provider's self-assessment questionnaire and external audit report(s)
Requesting and filing a service provider's external audit report(s) for future reference
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:
Which of the following is NOT a key component of TPRM requirements in the software development life cycle (SDLC)?
Maintenance of artifacts that provide proof that SOLC gates are executed
Process for data destruction and disposal
Software security testing
Process for fixing security defects
In the context of Third-Party Risk Management (TPRM) requirements within the Software Development Life Cycle (SDLC), a process for data destruction and disposal is not typically considered a key component. The primary focus within SDLC in TPRM is on ensuring secure software development practices, which includes maintaining artifacts to prove that SDLC gates are executed, conducting software security testing, and having processes in place for fixing security defects. While data destruction and disposal are important security considerations, they are generally associated with data lifecycle management and information security management practices rather than being integral to the SDLC process itself.
References:
Which statement BEST reflects the factors that help you determine the frequency of cyclical assessments?
Vendor assessments should be conducted during onboarding and then be replaced by continuous monitoring
Vendor assessment frequency should be based on the level of risk and criticality of the vendor to your operations as determined by their vendor risk score
Vendor assessments should be scheduled based on the type of services/products provided
Vendor assessment frequency may need to be changed if the vendor has disclosed a data breach
The frequency of cyclical assessments is one of the key factors that determines the effectiveness and efficiency of a TPRM program. Cyclical assessments are periodic reviews of the vendor’s performance, compliance, and risk posture that are conducted after the initial onboarding assessment. The frequency of cyclical assessments should be aligned with the organization’s risk appetite and tolerance, and should reflect the level of risk and criticality of the vendor to the organization’s operations. A common approach to determine the frequency of cyclical assessments is to use a vendor risk score, which is a numerical value that represents the vendor’s inherent and residual risk based on various criteria, such as the type, scope, and complexity of the services or products provided, the vendor’s security and privacy controls, the vendor’s compliance with relevant regulations and standards, the vendor’s past performance and incident history, and the vendor’s business continuity and disaster recovery capabilities. The vendor risk score can be used to categorize the vendors into different risk tiers, such as high, medium, and low, and assign appropriate frequencies for cyclical assessments, such as annually, biannually, or quarterly. For example, a high-risk vendor may require an annual assessment, while a low-risk vendor may require a biannual or quarterly assessment. The vendor risk score and the frequency of cyclical assessments should be reviewed and updated regularly to account for any changes in the vendor’s risk profile or the organization’s risk appetite.
The other three statements do not best reflect the factors that help you determine the frequency of cyclical assessments, as they are either too rigid, too vague, or too reactive. Statement A implies that vendor assessments are only necessary during onboarding and can be replaced by continuous monitoring afterwards. However, continuous monitoring alone is not sufficient to ensure the vendor’s compliance and risk management, as it may not capture all the aspects of the vendor’s performance and risk posture, such as contractual obligations, service level agreements, audit results, and remediation actions. Therefore, vendor assessments should be conducted during onboarding and at regular intervals thereafter, complemented by continuous monitoring. Statement C suggests that vendor assessments should be scheduled based on the type of services or products provided, without considering the other factors that may affect the vendor’s risk level and criticality, such as the vendor’s security and privacy controls, the vendor’s compliance with relevant regulations and standards, the vendor’s past performance and incident history, and the vendor’s business continuity and disaster recovery capabilities. Therefore, statement C is too vague and does not provide a clear and consistent basis for determining the frequency of cyclical assessments. Statement D indicates that vendor assessment frequency may need to be changed if the vendor has disclosed a data breach, implying that the frequency of cyclical assessments is only adjusted in response to a negative event. However, this approach is too reactive and may not prevent or mitigate the impact of the data breach, as the vendor’s risk level and criticality may have already increased before the data breach occurred. Therefore, statement D does not reflect a proactive and risk-based approach to determining the frequency of cyclical assessments. References:
Which cloud deployment model is primarily focused on the application layer?
Infrastructure as a Service
Software as a Service
Function a3 a Service
Platform as a Service
Software as a Service (SaaS) is a cloud deployment model that provides users with access to software applications over the internet, without requiring them to install, maintain, or update the software on their own devices. SaaS is primarily focused on the application layer, as it delivers the complete functionality of the software to the end users, while abstracting away the underlying infrastructure, platform, and middleware layers. SaaS providers are responsible for managing the servers, databases, networks, security, and scalability of the software, as well as ensuring its availability, performance, and compliance. SaaS users only pay for the software usage, usually on a subscription or pay-per-use basis, and can access the software from any device and location, as long as they have an internet connection. Some examples of SaaS applications are Gmail, Salesforce, Dropbox, and Netflix. References:
Which statement does NOT reflect current practice in addressing fourth party risk or subcontracting risk?
Third party contracts and agreements should require prior notice and approval for subcontracting
Outsourcers should rely on requesting and reviewing external audit reports to address subcontracting risk
Outsourcers should inspect the vendor's TPRM program and require evidence of the assessments of subcontractors
Third party contracts should include capturing, maintaining, and tracking authorized subcontractors
This statement does not reflect current practice in addressing fourth party risk or subcontracting risk because it is not sufficient to rely on external audit reports alone. Outsourcers should also perform their own due diligence and monitoring of the subcontractors, as well as ensure that the third party has a robust TPRM program in place. External audit reports may not cover all the relevant aspects of subcontracting risk, such as data security, compliance, performance, and quality. Moreover, external audit reports may not be timely, accurate, or consistent, and may not reflect the current state of the subcontractor’s operations. Therefore, outsourcers should adopt a more proactive and comprehensive approach to managing subcontracting risk, rather than relying on external audit reports. References:
Which of the following would be a component of an arganization’s Ethics and Code of Conduct Program?
Participation in the company's annual privacy awareness program
A disciplinary process for non-compliance with key policies, including formal termination or change of status process based on non-compliance
Signing acknowledgement of Acceptable Use policy for use of company assets
A process to conduct periodic access reviews of critical Human Resource files
An organization’s Ethics and Code of Conduct Program is a set of policies, procedures, and practices that define the expected standards of behavior and ethical values for all employees and stakeholders. A key component of such a program is a disciplinary process that outlines the consequences and actions for violating the code of conduct or any other relevant policies. A disciplinary process helps to enforce the code of conduct, deter unethical behavior, and protect the organization’s reputation and integrity. A disciplinary process should include clear criteria for determining the severity and frequency of violations, the roles and responsibilities of the parties involved, the steps and timelines for investigation and resolution, and the range of sanctions and remedies available. A disciplinary process should also be fair, consistent, transparent, and respectful of the rights and dignity of the accused and the accuser. A disciplinary process may involve formal termination or change of status of the employee, depending on the nature and impact of the violation. Therefore, option B is a correct component of an organization’s Ethics and Code of Conduct Program.
The other options are not necessarily components of an Ethics and Code of Conduct Program, although they may be related or supportive of it. Option A, participation in the company’s annual privacy awareness program, is more likely to be a component of a Privacy Program, which is a specific area of ethics and compliance that deals with the protection and use of personal information. Option C, signing acknowledgement of Acceptable Use policy for use of company assets, is more likely to be a component of an Information Security Program, which is another specific area of ethics and compliance that deals with the safeguarding and management of data and systems. Option D, a process to conduct periodic access reviews of critical Human Resource files, is more likely to be a component of an Internal Control Program, which is a general area of ethics and compliance that deals with the design and implementation of controls to ensure the reliability and accuracy of financial and operational information. References:
Which of the following factors is MOST important when assessing the risk of shadow IT in organizational security?
The organization maintains adequate policies and procedures that communicate required controls for security functions
The organization requires security training and certification for security personnel
The organization defines staffing levels to address impact of any turnover in security roles
The organization's resources and investment are sufficient to meet security requirements
Shadow IT is the use and management of any IT technologies, solutions, services, projects, and infrastructure without formal approval and support of internal IT departments. Shadow IT can pose significant security risks to the organization, such as data breaches, compliance violations, malware infections, or network disruptions. Therefore, assessing and mitigating the risk of shadow IT is an essential part of organizational security.
One of the most important factors when assessing the risk of shadow IT is whether the organization maintains adequate policies and procedures that communicate required controls for security functions. Policies and procedures are the documents that define the organization’s security objectives, standards, roles, responsibilities, and processes. They provide guidance and direction for the organization’s security activities, such as risk assessment, vendor management, incident response, data protection, access control, etc. They also establish the expectations and requirements for the organization’s employees, vendors, and other stakeholders regarding the use and management of IT resources.
By maintaining adequate policies and procedures that communicate required controls for security functions, the organization can:
By doing so, the organization can reduce the likelihood and impact of shadow IT, and increase the visibility and accountability of its IT environment. The organization can also foster a culture of security awareness and responsibility among its employees, vendors, and other stakeholders, and encourage them to report and resolve any shadow IT incidents or problems.
The other factors, such as the organization’s security training and certification, staffing levels, and resources and investment, are also relevant for assessing the risk of shadow IT, but they are not as important as the organization’s policies and procedures. Security training and certification can help the organization’s security personnel to acquire and maintain the necessary skills and knowledge to deal with shadow IT, but they do not address the root causes or motivations of shadow IT. Staffing levels can affect the organization’s ability to detect and respond to shadow IT, but they do not prevent or deter shadow IT from occurring. Resources and investment can enable the organization to provide adequate and appropriate IT resources to its employees, vendors, and other stakeholders, but they do not guarantee the satisfaction or compliance of those parties. References:
Which statement BEST describes the use of risk based decisioning in prioritizing gaps identified at a critical vendor when defining the corrective action plan?
The assessor determined that gaps should be analyzed, documented, reviewed for compensating controls, and submitted to the business owner to approve risk treatment plan
The assessor decided that the critical gaps should be discussed in the closing meeting so that the vendor can begin to implement corrective actions immediately
The assessor concluded that all gaps should be logged and treated as high severity findings since the assessment was performed on a critical vendor
The assessor determined that all gaps should be logged and communicated that if the gaps were corrected immediately they would not need to be included in the findings report
According to the Shared Assessments Certified Third Party Risk Professional (CTPRP) Study Guide, risk based decisioning is the process of applying risk criteria to prioritize and address the gaps identified during a third-party risk assessment1. The assessor should analyze the gaps based on the impact, likelihood, and urgency of the risk, and document the findings and recommendations in a report. The assessor should also review the existing or proposed compensating controls that could mitigate the risk, and submit the report to the business owner for approval of the risk treatment plan. The risk treatment plan could include accepting, transferring, avoiding, or reducing the risk, depending on the risk appetite and tolerance of the organization1.
The other statements do not reflect the best use of risk based decisioning, as they either ignore the risk analysis and documentation process, or apply a uniform or arbitrary approach to prioritizing and addressing the gaps. The assessor should not decide or conclude on the risk treatment plan without consulting the business owner, as the business owner is ultimately responsible for the third-party relationship and the risk management decisions1. The assessor should also not communicate that the gaps would not be included in the report if they were corrected immediately, as this could compromise the integrity and transparency of the assessment process and the report2.
References:
Which statement is FALSE regarding the risk factors an organization may include when defining TPRM compliance requirements?
Organizations include TPRM compliance requirements within vendor contracts, and periodically review and update mandatory contract provisions
Organizations rely on regulatory mandates to define and structure TPRM compliance requirements
Organizations incorporate the use of external standards and frameworks to align and map TPRM compliance requirements to industry practice
Organizations define TPRM policies based on the company’s risk appetite to shape requirements based on the services being outsourced
TPRM compliance requirements are the rules and expectations that an organization must follow when engaging with third parties, such as vendors, suppliers, partners, or contractors. These requirements are derived from various sources, such as laws, regulations, standards, frameworks, contracts, policies, and best practices. However, relying solely on regulatory mandates to define and structure TPRM compliance requirements is a false statement, because123:
Therefore, the correct answer is B. Organizations rely on regulatory mandates to define and structure TPRM compliance requirements, as this is a false statement regarding the risk factors an organization may include when defining TPRM compliance requirements. References:
Which statement is FALSE regarding the methods of measuring third party risk?
Risk can be measured both qualitatively and quantitatively
Risk can be quantified by calculating the severity of impact and likelihood of occurrence
Assessing risk impact requires an analysis of prior events, frequency of occurrence, and external trends to analyze and predict the potential of a particular event happening
Risk likelihood or probability is a critical element in quantifying inherent or residual risk
This statement is false because assessing risk impact does not require an analysis of prior events, frequency of occurrence, and external trends. These factors are relevant for assessing risk likelihood or probability, not impact. Risk impact is the potential consequence or damage that a risk event may cause to the organization or its stakeholders. Risk impact can be measured qualitatively (e.g., high, medium, low) or quantitatively (e.g., monetary value, percentage of revenue, number of customers affected). To assess risk impact, the organization needs to consider the nature and scope of the risk, the potential harm or loss, and the sensitivity or tolerance of the organization or its stakeholders to the risk. References:
Which statement provides the BEST example of the purpose of scoping in third party assessments?
Scoping is used to reduce the number of questions the vendor has to complete based on vendor “classification
Scoping is the process an outsourcer uses to configure a third party assessment based on the risk the vendor presents to the organization
Scoping is an assessment technique only used for high risk or critical vendors that require on-site assessments
Scoping is used primarily to limit the inclusion of supply chain vendors in third party assessments
Scoping is a critical step in third party assessments, as it determines the scope and depth of the assessment based on the inherent risk, impact, and complexity of the vendor relationship. Scoping helps to ensure that the assessment is relevant, efficient, and consistent with the outsourcer’s risk appetite and objectives. Scoping also helps to avoid over or under assessing the vendor, which could result in unnecessary costs, delays, or gaps in risk management. Scoping is not a one-time activity, but rather an ongoing process that should be reviewed and updated throughout the vendor lifecycle. Scoping should be aligned with the outsourcer’s third party risk management framework and policies, and follow the best practices and guidelines provided by the Shared Assessments Program and other industry standards. References:
Which statement is NOT an accurate reflection of an organizations requirements within an enterprise information security policy?
Security policies should define the organizational structure and accountabilities for oversight
Security policies should have an effective date and date of last review by management
Security policies should be changed on an annual basis due to technology changes
Security policies should be organized based upon an accepted control framework
An enterprise information security policy (EISP) is a management-level document that details the organization’s philosophy, objectives, and expectations regarding information security. It sets the direction, scope, and tone for all security efforts and provides a framework for developing and implementing security programs and controls. According to the web search results from the search_web tool, some of the key elements of an EISP are:
However, option C, a statement that security policies should be changed on an annual basis due to technology changes, is not an accurate reflection of an organization’s requirements within an EISP. While technology changes may affect the security environment and the threats and vulnerabilities that the organization faces, they are not the only factor that determines the need for changing security policies. Other factors, such as business changes, legal changes, risk changes, audit findings, incident reports, and best practices, may also trigger the need for reviewing and updating security policies. Therefore, option C is the correct answer, as it is the only one that does not reflect an organization’s requirements within an EISP. References: The following resources support the verified answer and explanation:
Which of the following components is NOT typically included in external continuous monitoring solutions?
Status updates on localized events based on geolocation
Alerts on legal and regulatory actions involving the vendor
Metrics that track SLAs for performance management
Reports that identify changes in vendor financial viability
External continuous monitoring solutions are tools or services that provide objective and timely data on the cybersecurity posture and performance of third-party vendors. They typically include components such as:
However, metrics that track SLAs for performance management are not typically included in external continuous monitoring solutions, as they are more relevant for internal monitoring and reporting. SLAs are service level agreements that define the expected quality, availability, and reliability of the vendor’s services or products, as well as the penalties or remedies for non-compliance. SLAs are usually measured and reported by the vendor itself, or by a third-party auditor or assessor, based on the specific criteria and frequency agreed upon by the parties . Therefore, option C is the correct answer. References:
For services with system-to-system access, which change management requirement
MOST effectively reduces the risk of business disruption to the outsourcer?
Approval of the change by the information security department
Documenting sufficient time for quality assurance testing
Communicating the change to customers prior ta deployment to enable external acceptance testing
Documenting and legging change approvals
For services with system-to-system access, ensuring sufficient time for quality assurance (QA) testing before implementing changes is crucial to reducing the risk of business disruption to the outsourcer. This requirement ensures that any modifications to the system are thoroughly vetted for potential issues that could impact the outsourcer's operations. QA testing allows for the identification and remediation of bugs, compatibility issues, and other potential problems that could lead to operational disruptions or security vulnerabilities. By allocating adequate time for QA testing, organizations can ensure that changes are fully functional and secure, thereby maintaining the integrity and availability of services provided to the outsourcer. This practice is aligned with industry standards for change management, which advocate for comprehensive testing and validation processes to ensure the reliability and stability of system changes.
References: