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
Which requirement is NOT included in IT asset end-of-life (EOL) processes?
The requirement to conduct periodic risk assessments to determine end-of-life
The requirement to track status using a change initiation request form
The requirement to track updates to third party provided systems or applications for any planned end-of-life support
The requirement to establish defined procedures for secure destruction al sunset of asset
In IT asset end-of-life (EOL) processes, the requirement to conduct periodic risk assessments specifically to determine end-of-life is not typically included. EOL processes generally focus on managing the decommissioning and secure disposal of IT assets that have reached the end of their useful life or support period. This includes tracking the status of assets, managing updates and support for third-party systems and applications, and establishing procedures for the secure destruction of assets at sunset. While risk assessments are crucial in overall IT asset management, they are not usually a direct component of determining an asset's EOL status, which is more often based on operational effectiveness, manufacturer support, and technological obsolescence.
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 statement is TRUE regarding the onboarding process far new hires?
New employees and contractors should not be on-boarded until the results of applicant screening are approved
it is not necessary to have employees, contractors, and third party users sign confidentiality or non-disclosure agreements
All job roles should require employees to sign non-compete agreements
New employees and contactors can opt-out of having to attend security and privacy awareness training if they hold existing certifications
The onboarding process for new hires is a key part of the third-party risk management program, as it ensures that the right people are hired and trained to perform their roles effectively and securely. One of the best practices for onboarding new hires is to conduct applicant screening, which may include background checks, reference checks, verification of credentials, and assessment of skills and competencies. Applicant screening helps to identify and mitigate potential risks such as fraud, theft, corruption, or data breaches that may arise from hiring unqualified, dishonest, or malicious individuals. Therefore, it is important to wait for the results of applicant screening before onboarding new employees and contractors, as this can prevent costly and damaging incidents in the future.
The other statements are false regarding the onboarding process for new hires. It is necessary to have employees, contractors, and third-party users sign confidentiality or non-disclosure agreements, as this protects the company’s sensitive information and intellectual property from unauthorized disclosure or misuse. Non-compete agreements may not be required for all job roles, as they may limit the employee’s ability to work for other companies or in the same industry after leaving the current employer. They may also be subject to legal challenges depending on the jurisdiction and the scope of the agreement. Security and privacy awareness training is essential for all new employees and contractors, regardless of their existing certifications, as it educates them on the company’s policies, procedures, and standards for protecting data and systems from cyber threats. It also helps to foster a culture of security and compliance within the organization. References:
During the contract negotiation process for a new vendor, the vendor states they have legal obligations to retain data for tax purposes. However, your company policy requires data
return or destruction at contract termination. Which statement provides the BEST approach to address this conflict?
Determine if a policy exception and approval is required, and require that data safeguarding obligations continue after termination
Change the risk rating of the vendor to reflect a higher risk tier
Insist the vendor adheres to the policy and contract provisions without exception
Conduct an assessment of the vendor's data governance and records management program
The best approach to address the conflict between the vendor’s legal obligations to retain data for tax purposes and the company’s policy to require data return or destruction at contract termination is A. Determine if a policy exception and approval is required, and require that data safeguarding obligations continue after termination. This approach recognizes that the vendor may have valid reasons to retain some data for a certain period of time, and that the company may have flexibility to grant exceptions to its policy under certain circumstances. However, this approach also ensures that the company maintains oversight and control over the data that the vendor retains, and that the vendor continues to comply with the data safeguarding obligations, such as encryption, access control, audit, and breach notification, until the data is returned or destroyed. This approach balances the interests and risks of both parties, and minimizes the potential for data breaches, misuse, or loss.
The other approaches are not the best ways to address the conflict, as they may create more problems or risks for either party. B. Change the risk rating of the vendor to reflect a higher risk tier. This approach does not resolve the conflict, but rather shifts the responsibility to the company to manage the increased risk of the vendor retaining the data. Changing the risk rating may also affect the contract terms, such as pricing, service level agreements, or liability clauses, and may require renegotiation or termination of the contract. C. Insist the vendor adheres to the policy and contract provisions without exception. This approach is too rigid and may not be feasible or reasonable for the vendor, especially if they have legal obligations to retain the data. This approach may also damage the relationship and trust between the parties, and may lead to disputes or litigation. D. Conduct an assessment of the vendor’s data governance and records management program. This approach is too time-consuming and costly, and may not be necessary or relevant for the conflict. Conducting an assessment may provide some assurance about the vendor’s data practices, but it does not address the underlying issue of the conflicting data retention requirements. Moreover, conducting an assessment may not be possible or appropriate during the contract negotiation process, as it may require access to the vendor’s systems, data, or personnel. 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:
You are reviewing assessment results of workstation and endpoint security. Which result should trigger more investigation due to greater risk potential?
Use of multi-tenant laptops
Disabled printing and USB devices
Use of desktop virtualization
Disabled or blocked access to internet
Workstation and endpoint security refers to the protection of devices that connect to a network from malicious actors and exploits1. These devices include laptops, desktops, tablets, smartphones, and IoT devices. Workstation and endpoint security can involve various measures, such as antivirus software, firewalls, encryption, authentication, patch management, and device management1.
Among the four options, the use of multi-tenant laptops poses the greatest risk potential for workstation and endpoint security. Multi-tenant laptops are laptops that are shared by multiple users or organizations, such as in a cloud-based environment2. This means that the laptop’s resources, such as memory, CPU, storage, and network, are divided among different tenants, who may have different security policies, requirements, and access levels2. This can create several challenges and risks, such as:
Therefore, the use of multi-tenant laptops should trigger more investigation due to greater risk potential, and require more stringent and consistent security controls, such as:
References: 1: What is Desktop Virtualization? | IBM1 2: Multitenant organization scenario and Microsoft Entra capabilities2
Which statement is FALSE regarding background check requirements for vendors or service providers?
Background check requirements are not applicable for vendors or service providers based outside the United States
Background checks should be performed prior to employment and may be updated after employment based upon criteria in HR policies
Background check requirements should be applied to employees, contract workers and temporary workers
Background check requirements may differ based on level of authority, risk, or job role
Background check requirements are applicable for vendors or service providers based outside the United States, as well as those based within the country. According to the Shared Assessments Program, background checks are a key component of third-party risk management and should be conducted for all third parties that have access to sensitive data, systems, or facilities, regardless of their location1. The FCRA also applies to background checks performed by U.S. employers on foreign nationals who work outside the U.S. for a U.S. employer or its affiliates2. Therefore, statement A is false and the correct answer is A. 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: The following resources support the verified answer and explanation:
Which of the following factors is LEAST likely to trigger notification obligations in incident response?
Regulatory requirements
Data classification or sensitivity
Encryption of data
Contractual terms
Notification obligations in incident response are the legal or contractual duties to inform relevant parties about a security breach or incident that affects their data or systems. These obligations may vary depending on the type, scope, and impact of the incident, as well as the jurisdiction, industry, and contractual agreements involved. The factors that are most likely to trigger notification obligations are:
The factor that is least likely to trigger notification obligations is:
References:
You are updating the inventory of regulations that impact your TPRM program during the company's annual risk assessment. Which statement provides the optimal approach to
prioritizing the regulations?
identify the applicable regulations that require an extension of specific obligations to service providers
Narrow the focus only on the regulations that directly apply to personal information
Include the regulations that have the greater risk of triggering enforcement or fines/penalties
Emphasize the federal regulations since they supersede state regulations
Third-party risk management (TPRM) is the process of identifying, assessing, and mitigating the risks associated with outsourcing business activities or functions to external entities. TPRM is influenced by various regulations that aim to protect the interests of customers, stakeholders, and regulators from the potential harm caused by third-party failures or misconduct. These regulations may vary depending on the industry, jurisdiction, and nature of the third-party relationship. Therefore, it is important for organizations to update their inventory of regulations that impact their TPRM program during their annual risk assessment, and prioritize the regulations that are most relevant and critical for their business objectives and risk appetite.
The optimal approach to prioritizing the regulations is to identify the applicable regulations that require an extension of specific obligations to service providers. This means that the organization should focus on the regulations that impose certain requirements or expectations on the organization and its third-party partners, such as data protection, security, compliance, reporting, auditing, or performance standards. These regulations may also specify the roles and responsibilities of the organization and the service provider, the scope and frequency of due diligence and monitoring activities, the contractual clauses and terms, and the remediation and termination procedures. By identifying these regulations, the organization can ensure that its TPRM program is aligned with the regulatory expectations and obligations, and that it can effectively manage and mitigate the risks associated with its third-party relationships.
Some examples of regulations that require an extension of specific obligations to service providers are:
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:
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.
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Which factor in patch management is MOST important when conducting postcybersecurity incident analysis related to systems and applications?
Configuration
Log retention
Approvals
Testing
In patch management, testing is the most crucial factor when conducting post-cybersecurity incident analysis related to systems and applications. Proper testing of patches before deployment ensures that they effectively address vulnerabilities without introducing new issues or incompatibilities that could impact system functionality or security. Testing allows organizations to verify that the patch resolves the identified security issue without adversely affecting the system or application's performance. It also helps in identifying potential conflicts with existing configurations or dependencies. Effective testing strategies include regression testing, performance testing, and security testing to ensure comprehensive validation of the patch's effectiveness and safety before widespread deployment. This approach aligns with best practices in patch management, emphasizing the importance of thorough testing to mitigate the risk of unintended consequences and ensure the continued security and stability of systems and applications.
References:
Which policy requirement is typically NOT defined in an Asset Management program?
The Policy states requirements for the reuse of physical media (e.9., devices, servers, disk drives, etc.)
The Policy requires that employees and contractors return all company data and assets upon termination of their employment, contract or agreement
The Policy defines requirements for the inventory, identification, and disposal of equipment “and/or physical media
The Policy requires visitors (including other tenants and maintenance personnel) to sign-in and sign-out of the facility, and to be escorted at all times
An Asset Management program is a set of policies, procedures, and practices that aim to optimize the value, performance, and lifecycle of the organization’s assets, such as physical, financial, human, or information assets123. An Asset Management program typically defines policy requirements for the following aspects of asset management:
However, option D, a policy requirement that requires visitors (including other tenants and maintenance personnel) to sign-in and sign-out of the facility, and to be escorted at all times, is typically not defined in an Asset Management program. Rather, this requirement is more likely to be defined in a Physical Security program, which is a set of policies, procedures, and practices that aim to protect the organization’s premises, assets, and personnel from unauthorized access, damage, or harm . A Physical Security program typically defines policy requirements for the following aspects of physical security:
Therefore, option D is the correct answer, as it is the only one that does not reflect a policy requirement that is typically defined in an Asset Management program. References: The following resources support the verified answer and explanation:
Which of the following is NOT an example of a type of application security testing?
Cookie consent scanning
Interactive testing
Static testing
Dynamic testing
Application security testing (AST) is a process of finding and eliminating vulnerabilities in software applications. There are different types of AST tools that can help with this process, such as static, dynamic, and interactive testing. Static testing analyzes the source code of the application without executing it, dynamic testing simulates attacks on the running application from the outside, and interactive testing combines both static and dynamic analysis to find more vulnerabilities and provide more context. Cookie consent scanning is not a type of AST, but rather a tool that checks if a website complies with the cookie consent regulations, such as the EU General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). Cookie consent scanning does not test the security of the application, but rather the privacy and compliance of the website. 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.
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Which example BEST represents the set of restrictive areas that require an additional authentication factor for access control?
Datacenters; telecom rooms; server rooms; exterior building entrance
Datacenters; telecom rooms; security operations centers; loading docks
Telecom rooms; parking garage; security operations centers; exterior building entrance
Exterior building entrance; datacenters; telecom rooms; printer rooms
Restrictive areas are those that contain sensitive or critical assets, systems, or information that require additional protection from unauthorized access or tampering. Access control is the process of granting or denying access to these areas based on predefined policies, rules, and criteria. An additional authentication factor is a method of verifying the identity or authorization of a user or device that is used in conjunction with another factor, such as a password, a token, or a biometric feature. Additional authentication factors enhance the security and reliability of access control by reducing the risk of impersonation, compromise, or theft of credentials.
The example that best represents the set of restrictive areas that require an additional authentication factor for access control is A. Datacenters; telecom rooms; server rooms; exterior building entrance. These areas contain vital infrastructure, equipment, and data that are essential for the organization’s operations, performance, and security. Unauthorized access to these areas could result in significant damage, disruption, or loss of data, services, or resources. Therefore, these areas should be protected by multiple layers of access control, including physical and logical barriers, as well as additional authentication factors, such as smart cards, biometrics, or one-time passwords.
The other examples are less likely to represent the set of restrictive areas that require an additional authentication factor for access control, because they either contain less sensitive or critical assets, systems, or information, or they are more accessible or visible to the public or other authorized users. For example:
References:
Which statement is NOT an example of the purpose of internal communications and information sharing using TPRM performance metrics?
To communicate the status of findings identified in vendor assessments and escalate issues es needed
To communicate the status of policy compliance with TPRM onboarding, periodic assessment and off-boarding requirements
To document the agreed upon corrective action plan between external parties based on the severity of findings
To develop and provide periodic reporting to management based on TPRM results
The purpose of internal communications and information sharing using TPRM performance metrics is to inform and align the organization’s stakeholders on the status, progress, and outcomes of the TPRM program. This includes communicating the results of vendor assessments, the compliance level of the organization’s policies and procedures, and the periodic reporting to management and other relevant parties. However, documenting the corrective action plan between external parties is not an internal communication, but rather an external one. This is because the corrective action plan is a formal agreement between the organization and the vendor to address and resolve the issues identified in the assessment. Therefore, this statement is not an example of the purpose of internal communications and information sharing using TPRM performance metrics. References:
When updating TPRM vendor classification requirements with a focus on availability, which
risk rating factors provide the greatest impact to the analysis?
Type of data by classification; volume of records included in data processing
Financial viability of the vendor; ability to meet performance metrics
Network connectivity; remote access to applications
impact on operations and end users; impact on revenue; impact on regulatory compliance
TPRM vendor classification is the process of categorizing vendors based on their criticality, risk level, and service type. Vendor classification helps to prioritize and allocate resources for vendor assessment, monitoring, and remediation. Vendor classification should be updated periodically to reflect changes in the business environment, vendor performance, and regulatory requirements.
When updating TPRM vendor classification requirements with a focus on availability, the risk rating factors that provide the greatest impact to the analysis are the impact on operations and end users, the impact on revenue, and the impact on regulatory compliance. This is because:
Therefore, these three factors are the most important to consider when updating TPRM vendor classification requirements with a focus on availability, as they reflect the potential consequences and risks of vendor unavailability for the business.
References:
When evaluating compliance artifacts for change management, a robust process should include the following attributes:
Approval, validation, auditable.
Logging, approvals, validation, back-out and exception procedures
Logging, approval, back-out.
Communications, approval, auditable.
Change management is the process of controlling and documenting any changes to the scope, objectives, requirements, deliverables, or resources of a project or a program. Change management ensures that the impact of any change is assessed and communicated to all stakeholders, and that the changes are implemented in a controlled and coordinated manner. Compliance artifacts are the documents, records, or reports that demonstrate the adherence to the change management process and the regulatory or industry standards.
A robust change management process should include the following attributes:
References:
Which example of analyzing a vendor's response should trigger further investigation of their information security policies?
Determination that the security policies include contract or temporary workers
Determination that the security policies do not specify any requirements for third party governance and oversight
Determination that the security policies are approved by management and available to constituents including employees and contract workers
Determination that the security policies are communicated to constituents including full and part-time employees
One of the key elements of a robust information security policy is the definition and implementation of requirements for third party governance and oversight. This means that the vendor should have clear and consistent processes and procedures for managing and monitoring the information security risks and controls of their subcontractors, suppliers, or service providers. Third party governance and oversight should include the following aspects12:
Which statement is FALSE regarding the different types of contracts and agreements between outsourcers and service providers?
Contract addendums are not sufficient for addressing third party risk obligations as each requirement must be outlined in the Master Services Agreement (MSA)
Evergreen contracts are automatically renewed for each party after the maturity period, unless terminated under existing contract provisions
Requests for Proposals (RFPs) for outsourced services should include mandatory requirements based on an organization's TPRM program policies, standards and procedures
Statements of Work (SOWs) define operational requirements and obligations for each party
Contract addendums are supplementary documents that modify or amend the original contract terms. They can be used to address third party risk obligations, such as security, privacy, compliance, or performance standards, without having to rewrite the entire MSA. However, contract addendums should be consistent with the MSA and clearly specify the scope, duration, and responsibilities of each party. Contract addendums can also be used to update or revise the contract terms in response to changing business needs or regulatory requirements12.
The other statements are true regarding the different types of contracts and agreements between outsourcers and service providers. Evergreen contracts are contracts that do not have a fixed end date and are automatically renewed unless one party decides to terminate them under the existing contract provisions3. RFPs are documents that solicit proposals from potential service providers for a specific project or service. RFPs should include mandatory requirements based on an organization’s TPRM program policies, standards and procedures, such as risk assessment, due diligence, monitoring, reporting, and remediation . SOWs are documents that define the operational requirements and obligations for each party, such as the scope, deliverables, timelines, costs, quality, and performance metrics . References:
Which capability is LEAST likely to be included in the annual testing activities for Business Continuity or Disaster Recovery plans?
Plans to enable technology and business operations to be resumed at a back-up site
Process to validate that specific databases can be accessed by applications at the designated location
Ability for business personnel to perform their functions at an alternate work space location
Require participation by third party service providers in collaboration with industry exercises
Business Continuity or Disaster Recovery (BC/DR) plans are designed to ensure the continuity of critical business functions and processes in the event of a disruption or disaster. BC/DR plans should include annual testing activities to validate the effectiveness and readiness of the plans, as well as to identify and address any gaps or weaknesses. Testing activities should cover the three main areas of BC/DR: people, processes, and technology12.
The four options given in the question represent different types of testing activities that may be included in the BC/DR plans. However, option D is the least likely to be included, as it is not a mandatory or common practice for most organizations. While it is beneficial to involve third party service providers in the BC/DR testing, as they may play a vital role in the recovery process, it is not a requirement or a standard for most industries. Third party service providers may have their own BC/DR plans and testing schedules, which may not align with the organization’s plans and objectives. Moreover, requiring their participation in industry exercises may pose challenges in terms of coordination, confidentiality, and cost34.
Therefore, option D is the correct answer, as it is the least likely to be included in the annual testing activities for BC/DR plans. The other options are more likely to be included, as they are essential for ensuring the availability and functionality of the technology, processes, and personnel that support the critical business operations. These options are:
References:
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:
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 cloud deployment model is focused on the management of hardware equipment?
Function as a service
Platform as a service
Software as a service
Infrastructure as a service
Infrastructure as a service (IaaS) is a cloud deployment model that provides users with access to virtualized hardware resources, such as servers, storage, and network devices. Users can install and run their own operating systems and applications on the cloud infrastructure, and have full control over the configuration and management of the hardware equipment. IaaS is suitable for organizations that need high scalability, flexibility, and customization of their cloud environment. IaaS is different from other cloud deployment models, such as function as a service (FaaS), platform as a service (PaaS), and software as a service (SaaS), which provide users with higher-level services and abstract away the underlying hardware details. References:
What attribute is MOST likely to be included in the software development lifecycle (SDLC) process?
Scheduling the frequency of automated vulnerability scans
Scanning for data input validation in production
Conducting peer code reviews
Defining the scope of annual penetration tests
Peer code reviews are an essential part of the software development lifecycle (SDLC) process, as they help to improve the quality, security, and maintainability of the code. Peer code reviews involve having other developers review the code written by a developer before it is merged into the main branch or deployed to production. Peer code reviews can help to identify and fix errors, bugs, vulnerabilities, performance issues, coding standards violations, design flaws, and other issues that may affect the functionality or usability of the software. Peer code reviews also facilitate knowledge sharing, collaboration, and feedback among the development team, which can enhance the skills and productivity of the developers123.
The other options are not as likely to be included in the SDLC process, as they are either performed at different stages or not directly related to the development of the software. Scheduling the frequency of automated vulnerability scans and defining the scope of annual penetration tests are more related to the security testing and monitoring of the software, which are usually done after the development phase or as part of the maintenance phase. Scanning for data input validation in production is also a security measure that is done after the software is deployed, and it is not a good practice to rely on production testing alone, as it may expose the software to potential attacks or data breaches. Data input validation should be done during the development and testing phases, as well as in production123. References:
Which set of procedures is typically NOT addressed within data privacy policies?
Procedures to limit access and disclosure of personal information to third parties
Procedures for handling data access requests from individuals
Procedures for configuration settings in identity access management
Procedures for incident reporting and notification
Data privacy policies are documents that outline how an organization collects, uses, stores, shares, and protects personal information from its customers, employees, partners, and other stakeholders1. Data privacy policies should address the following key elements2:
Procedures for configuration settings in identity access management are typically not addressed within data privacy policies, as they are more related to the technical and operational aspects of data security and access control. Identity access management (IAM) is a framework of policies, processes, and technologies that enable an organization to manage and verify the identities and access rights of its users and devices3. IAM configuration settings determine how users and devices are authenticated, authorized, and audited when accessing data and resources. IAM configuration settings should be aligned with the data privacy policies and principles, but they are not part of the data privacy policies themselves. IAM configuration settings should be documented and maintained separately from data privacy policies, and should be reviewed and updated regularly to ensure compliance and security. References: 1: What is a Data Privacy Policy? | OneTrust 2: Privacy Policy Checklist: What to Include in Your Privacy Policy 3: What is identity and access management? | IBM : [Identity and Access Management Configuration Settings] : [Why data privacy and third-party risk teams need to work … - OneTrust] : [Privacy Risk Management - ISACA] : [What Every Chief Privacy Officer Should Know About Third-Party Risk …]
Tracking breach, credential exposure and insider fraud/theft alerts is an example of which continuous monitoring technique?
Monitoring surface
Vulnerabilities
Passive and active indicators of compromise
Business intelligence
Continuous monitoring is a process of collecting and analyzing data on the performance and security of third-party vendors on an ongoing basis. Continuous monitoring helps to identify and mitigate potential risks, such as data breaches, credential exposures, insider fraud/theft, and other cyber incidents, that may affect the organization and its customers. Continuous monitoring can use various techniques, such as monitoring surface, vulnerabilities, passive and active indicators of compromise, and business intelligence.
Passive and active indicators of compromise are examples of continuous monitoring techniques that track the signs of malicious activity or compromise on the third-party vendor’s systems or networks. Passive indicators of compromise are data sources that do not require direct interaction with the target, such as threat intelligence feeds, dark web monitoring, or external scanning. Active indicators of compromise are data sources that require direct interaction with the target, such as penetration testing, malware analysis, or incident response. Both passive and active indicators of compromise can provide valuable information on the current state and potential threats of the third-party vendor’s environment.
The other options are not examples of continuous monitoring techniques that track breach, credential exposure and insider fraud/theft alerts. Monitoring surface is a technique that measures the size and complexity of the third-party vendor’s attack surface, such as the number and type of internet-facing assets, domains, and services. Vulnerabilities are a technique that identifies the weaknesses or flaws in the third-party vendor’s systems or applications that can be exploited by attackers, such as outdated software, misconfigurations, or unpatched bugs. Business intelligence is a technique that analyzes the business performance and reputation of the third-party vendor, such as financial stability, customer satisfaction, or regulatory compliance. 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
Which statement is TRUE regarding a vendor's approach to Environmental, Social, and Governance (ESG) programs?
ESG expectations are driven by a company's executive team for internal commitments end not external entities
ESG requirements and programs may be directed by regulatory obligations or in response to company commitments
ESG commitments can only be measured qualitatively so it cannot be included in vendor due diligence standards
ESG obligations only apply to a company with publicly traded stocks
ESG programs are initiatives that aim to improve the environmental, social, and governance performance of a vendor or service provider. ESG programs may be driven by various factors, such as regulatory obligations, customer expectations, stakeholder pressure, industry standards, or company commitments. Therefore, statement B is true and the correct answer is B. Statement A is false because ESG expectations may come from external entities, such as regulators, investors, customers, or civil society. Statement C is false because ESG commitments can be measured both qualitatively and quantitatively, using indicators such as carbon emissions, diversity, ethics, or compliance. Statement D is false because ESG obligations may apply to any company, regardless of its size, ownership, or sector. References:
All of the following processes are components of controls evaluation in the Third Party Risk Assessment process EXCEPT:
Reviewing compliance artifacts for the presence of control attributes
Negotiating contract terms for the right to audit
Analyzing assessment results to identify and report risk
Scoping the assessment based on identified risk factors
Controls evaluation is the process of verifying and validating the effectiveness of the controls implemented by the third party to mitigate the identified risks. It involves reviewing the evidence provided by the third party, such as policies, procedures, certifications, attestations, or test results, to determine if the controls are adequate, consistent, and compliant with the requirements and standards of the organization. Controls evaluation also involves analyzing the assessment results to identify any gaps, weaknesses, or issues in the third party’s controls, and reporting the findings and recommendations to the relevant stakeholders. Negotiating contract terms for the right to audit is not a component of controls evaluation, but rather a component of contract management. Contract management is the process of establishing, maintaining, and enforcing the contractual agreements between the organization and the third party. It involves defining the roles, responsibilities, expectations, and obligations of both parties, as well as the terms and conditions for service delivery, performance measurement, risk management, dispute resolution, and termination. Negotiating contract terms for the right to audit is a key aspect of contract management, as it allows the organization to monitor and verify the third party’s compliance with the contract and the applicable regulations and standards. It also enables the organization to conduct independent audits or assessments of the third party’s controls, processes, and performance, and to request remediation actions if necessary. References:
If a system requires ALL of the following for accessing its data: (1) a password, (2) a
security token, and (3) a user's fingerprint, the system employs:
Biometric authentication
Challenge/Response authentication
One-Time Password (OTP) authentication
Multi-factor authentication
Multi-factor authentication (MFA) is an electronic authentication method that requires a user to present two or more pieces of evidence (or factors) to an authentication mechanism. The factors can be something the user knows (such as a password or a PIN), something the user has (such as a smartphone or a security token), or something the user is (such as a fingerprint or a facial recognition). MFA enhances the security of online accounts and applications by making it harder for attackers to gain access with stolen or guessed credentials. MFA is recommended as a best practice for third-party risk management, as it can reduce the risk of unauthorized access, data breaches, and identity theft. MFA is also a requirement for some regulatory standards and frameworks, such as PCI DSS, HIPAA, and NIST 800-63. References:
Which factor is the LEAST important attribute when classifying personal data?
The volume of data records processed or retained
The data subject category that identifies the data owner
The sensitivity level of specific data elements that could identify an individual
The assignment of a confidentiality level that differentiates public or non-public information
According to the GDPR, personal data is any information relating to an identified or identifiable natural person (data subject). The GDPR does not consider the volume of data records as a relevant factor for classifying personal data, but rather the nature and context of the data. The GDPR requires data controllers and processors to apply appropriate technical and organizational measures to ensure a level of security appropriate to the risk of processing personal data, taking into account factors such as the state of the art, the costs of implementation, the nature, scope, context and purposes of processing, and the risks of varying likelihood and severity for the rights and freedoms of natural persons. Therefore, the volume of data records is not a decisive attribute for classifying personal data, but rather an indicator of the potential impact of a data breach or misuse.
The other factors listed in the question are more important attributes for classifying personal data, as they relate to the identification, protection, and rights of the data subjects. The data subject category that identifies the data owner refers to the type of natural person whose personal data is processed, such as customers, employees, patients, students, etc. This factor is important for determining the purpose and legal basis of processing, as well as the data subject’s rights and expectations1. The sensitivity level of specific data elements that could identify an individual refers to the degree of harm or discrimination that could result from the disclosure or misuse of such data, such as racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, genetic or biometric data, health data, sex life or sexual orientation, or criminal convictions or offenses2. The GDPR imposes stricter rules and obligations for the processing of such special categories of personal data, as they pose a higher risk to the data subject’s fundamental rights and freedoms. The assignment of a confidentiality level that differentiates public or non-public information refers to the degree of access and disclosure that is permitted or required for the personal data, depending on the data subject’s consent, the legitimate interests of the data controller or processor, or the applicable laws and regulations1. The GDPR requires data controllers and processors to implement data protection by design and by default, meaning that they should only process the personal data that is necessary for the specific purpose and limit the access to those who need to know.
References:
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:
The set of shared values and beliefs that govern a company’s attitude toward risk is known as:
Risk tolerance
Risk treatment
Risk culture
Risk appetite
Risk culture is the term used to describe the collective way that an organization thinks about, manages, and responds to risk. It is influenced by the organization’s values, beliefs, norms, and practices, as well as the external environment and stakeholders. Risk culture affects how employees perceive, communicate, and act on risk issues, and how they balance risk and reward in their decision making. A strong risk culture is one that supports the organization’s strategic objectives, fosters accountability and transparency, and promotes learning and improvement. A weak risk culture is one that undermines the organization’s risk management framework, creates silos and conflicts, and exposes the organization to excessive or unnecessary risks. References: