CTPRP Exam Dumps - Certified Third-Party Risk Professional (CTPRP)

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:

• Best practices in secure software development, as outlined in frameworks like the Secure Software Development Framework (SSDF) by NIST, emphasize the importance of secure coding, vulnerability testing, and remediation processes rather than data disposal practices.
• The "Software Security Framework (SSF)" by the Open Web Application Security Project (OWASP) provides guidance on integrating security practices into the SDLC, focusing on areas like threat modeling, secure coding, and security testing.

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:

• Third-Party Risk Management 101: Guiding Principles
• Mastering the TPRM Lifecycle
• Third Party Risk Management Maturity Assessment

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:

• Shared Assessments CTPRP Study Guide, page 15, section 2.2.2
• Cloud Computing Deployment Models and Architectures, section on Cloud Computing Models
• Layered Architecture of Cloud, section on Application Layer

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:

• Shared Assessments Program, page 13: “Outsourcers should not rely solely on external audit reports to address subcontracting risk. Outsourcers should also inspect the vendor’s TPRM program and require evidence of the assessments of subcontractors.”
• Five Best Practices to Manage and Control Third-Party Risk, page 3: "Restricting privileged accounts

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:

• 1: Creating an Effective Code of Conduct (and Code Program) - Corporate Compliance Insights
• 2: Code of Conduct & Ethics (Examples and Best Practices) - Status.net
• 3: Why Have a Code of Conduct - Free Ethics & Compliance Toolkit
• 4: “Code of Ethics” and “Code of Conduct” - GeeksforGeeks
• 5: Six Tips on How to Implement a Strong Ethics Program - KnowledgeLeader

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:

• Educate and inform its employees about the security risks and implications of shadow IT, and the benefits and advantages of using authorized and supported IT resources.
• Establish and enforce clear and consistent rules and boundaries for the use and management of IT resources, and the consequences and penalties for violating them.
• Monitor and audit the compliance and performance of its employees, vendors, and other stakeholders regarding the use and management of IT resources, and identify and address any deviations or issues.
• Review and update its policies and procedures regularly, and communicate any changes or updates to its employees, vendors, and other stakeholders.

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:

• : Shadow IT Explained: Risks & Opportunities - BMC Software
• : What is Shadow IT? | IBM
• : Shadow IT: What Are the Risks and How Can You Mitigate Them? - Ekran System
• : Policies and Procedures - Shared Assessments

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:

• 1: Shared Assessments Certified Third Party Risk Professional (CTPRP) Study Guide, pages 29-30, 33-34
• 2: Third-Party Risk Management: Final Interagency Guidance, page 10

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:

• Regulatory mandates are not the only source of TPRM compliance requirements. Organizations may also need to consider other factors, such as industry benchmarks, customer expectations, stakeholder interests, ethical principles, and social responsibility.
• Regulatory mandates are not always comprehensive, clear, or consistent. Organizations may face different or conflicting regulations across jurisdictions, sectors, or domains. Organizations may also need to interpret and apply the regulations to their specific context and risk profile, which may require additional guidance or expertise.
• Regulatory mandates are not always sufficient, effective, or efficient. Organizations may need to go beyond the minimum requirements of the regulations to achieve their business objectives, mitigate their risks, or enhance their performance. Organizations may also need to adopt more flexible, scalable, and innovative approaches to TPRM compliance, rather than following a rigid, one-size-fits-all, or check-the-box model.

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:

• 1: Understanding TPRM Compliance: A Comprehensive Guide | Prevalent
• 2: What Is Third-Party Risk Management (TPRM)? 2024 Guide | UpGuard
• 3: Third-Party Risk Management and ISO Requirements for 2022 | Reciprocity