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Your organization has recently acquired a set of new global third party relationships due to M&A. You must define your risk assessment process based on your due diligence
standards. Which risk factor is LEAST important in defining your requirements?
The risk of increased expense to conduct vendor assessments based on client contractual requirements
The risk of natural disasters and physical security risk based on geolocation
The risk of increased government regulation and decreased political stability based on country risk
The financial risk due to local economic factors and country infrastructure
The risk of increased expense to conduct vendor assessments based on client contractual requirements is the least important factor in defining your risk assessment process for new global third party relationships. This is because the expense of vendor assessments is not a direct risk to your organization’s security, compliance, reputation, or performance, but rather a cost of doing business that can be budgeted and optimized. While vendor assessments are necessary and beneficial, they are not the primary driver of your risk assessment process, which should focus on the potential impact and likelihood of adverse events or incidents involving your third parties. The other factors (B, C, and D) are more important because they directly affect the level of risk exposure and the mitigation strategies for your third parties. For example, natural disasters and physical security risks can disrupt your third party’s operations and service delivery, government regulation and political stability can affect your third party’s compliance and legal obligations, and financial risk can affect your third party’s solvency and reliability. Therefore, these factors should be considered more carefully when defining your risk assessment process. 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 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
At which level of reporting are changes in TPRM program metrics rare and exceptional?
Business unit
Executive management
Risk committee
Board of Directors
TPRM program metrics are the indicators that measure the performance, effectiveness, and maturity of the TPRM program. They help to monitor and communicate the progress, achievements, and challenges of the TPRM program to various stakeholders, such as business units, executive management, risk committees, and board of directors. However, the level of reporting and the frequency of changes in TPRM program metrics vary depending on the stakeholder’s role, responsibility, and interest123:
Therefore, the correct answer is D. Board of Directors, as this is the level of reporting where changes in TPRM program metrics are rare and exceptional. References:
Which statement is FALSE regarding the primary factors in determining vendor risk classification?
The geographic area where the vendor is located may trigger specific regulatory obligations
The importance to the outsourcer's recovery objectives may trigger a higher risk tier
The type and volume of personal data processed may trigger a higher risk rating based on the criticality of the systems
Network connectivity or remote access may trigger a higher vendor risk classification only for third parties that process personal information
This statement is false because network connectivity or remote access may trigger a higher vendor risk classification for any third party that has access to the organization’s network, systems, or data, regardless of whether they process personal information or not. Network connectivity or remote access increases the exposure of the organization to cyberattacks, data breaches, or unauthorized access by malicious actors. Therefore, the organization should assess the security controls and practices of the third party, such as encryption, authentication, firewall, antivirus, and patch management, to ensure that they meet the organization’s standards and expectations. The organization should also monitor the network activity and performance of the third party, and establish clear policies and procedures for granting, revoking, or modifying access rights. The other statements (A, B, and C) are true regarding the primary factors in determining vendor risk classification, as they reflect the potential impact, likelihood, and severity of the risks associated with the vendor’s location, importance, and data processing. 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:
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 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 is TRUE regarding defining vendor classification or risk tiering in a TPRM program?
Vendor classification and risk tiers are based upon residual risk calculations
Vendor classification and risk tiering should only be used for critical third party relationships
Vendor classification and corresponding risk tiers utilize the same due diligence standards for controls evaluation based upon policy
Vendor classification and risk tier is determined by calculating the inherent risk associated with outsourcing a specific product or service
Vendor classification or risk tiering is a process of categorizing vendors based on the level of security risk they introduce to an organization12. It is a key component of a third-party risk management (TPRM) program, as it helps to prioritize and allocate resources for vendor assessment, monitoring, and remediation12. The statement D is true, as it reflects the first step of vendor classification or risk tiering, which is to determine the inherent risk of each vendor relationship based on the nature, scope, and complexity of the product or service being outsourced3 . Inherent risk is the risk that exists before any controls or mitigating factors are applied3 . By calculating the inherent risk, an organization can assign each vendor to a risk tier that reflects the potential impact and likelihood of a security breach or incident involving the vendor3 .
The other statements are false, as they do not accurately describe the vendor classification or risk tiering process. The statement A is false, as vendor classification and risk tiers are not based on residual risk calculations, but on inherent risk calculations. Residual risk is the risk that remains after controls or mitigating factors are applied3 . Residual risk is used to evaluate the effectiveness of the controls and the need for further action, but not to classify or tier vendors3 . The statement B is false, as vendor classification and risk tiering should be used for all third party relationships, not only for critical ones. Vendor classification and risk tiering helps to identify and prioritize the critical vendors, but also to manage the low and medium risk vendors according to their respective risk profiles12. The statement C is false, as vendor classification and corresponding risk tiers do not utilize the same due diligence standards for controls evaluation based upon policy, but different ones. Due diligence standards are the criteria and methods used to assess the security posture and performance of vendors. Due diligence standards should vary according to the risk tier of the vendor, as higher risk vendors require more rigorous and frequent evaluation than lower risk vendors.
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 statement is FALSE regarding analyzing results from a vendor risk assessment?
The frequency for conducting a vendor reassessment is defined by regulatory obligations
Findings from a vendor risk assessment may be defined at the entity level, and are based o na Specific topic or control
Identifying findings from a vendor risk assessment can occur at any stage in the contract lifecycle
Risk assessment findings identified by controls testing or validation should map back to the information gathering questionnaire and agreed upon framework
The frequency for conducting a vendor reassessment is not necessarily defined by regulatory obligations, but rather by the risk rating and criticality of the vendor, as well as the changes in the vendor’s environment, performance, and controls. Regulatory obligations may provide some guidance or minimum requirements for vendor reassessment, but they are not the sole determinant of the reassessment frequency. According to the Shared Assessments Program Tools User Guide, "The frequency of reassessment should be based on the risk rating and criticality of the vendor, as well as any changes in the vendor’s environment, performance, or controls. Regulatory guidance may also influence the frequency of reassessment."1 Similarly, the CTPRP Study Guide states, "The frequency of reassessment should be based on the risk rating and criticality of the vendor, as well as any changes in the vendor’s environment, performance, or controls. Regulatory guidance may also influence the frequency of reassessment."2
References:
Which type of contract provision is MOST important in managing Fourth-Nth party risk after contract signing and on-boarding due diligence is complete?
Subcontractor notice and approval
Indemnification and liability
Breach notification
Right to audit
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 partners12. After contract signing and on-boarding due diligence is complete, the most important type of contract provision to manage Fourth-Nth party risk is subcontractor notice and approval. This provision requires the third party to inform the organization of any subcontracting arrangements and obtain the organization’s consent before engaging any Fourth-Nth parties345. This provision enables the organization to have visibility and control over the extended network of suppliers and service providers, and to assess the potential risks and impacts of any outsourcing decisions. Subcontractor notice and approval also helps the organization to ensure that the Fourth-Nth parties comply with the same standards and expectations as the third party, and to hold the third party accountable for the performance and security of the Fourth-Nth parties345. References:
The following statements reflect user obligations defined in end-user device policies
EXCEPT:
A statement specifying the owner of data on the end-user device
A statement that defines the process to remove all organizational data, settings and accounts alt offboarding
A statement detailing user responsibility in ensuring the security of the end-user device
A statement that specifies the ability to synchronize mobile device data with enterprise systems
End-user device policies are policies that establish the rules and requirements for the use and management of devices that access organizational data, networks, and systems. These policies typically include user obligations that define the responsibilities and expectations of the users regarding the security, privacy, and compliance of the devices they use. According to the web search results from the search_web tool, some common user obligations defined in end-user device policies are:
However, option D, a statement that specifies the ability to synchronize mobile device data with enterprise systems, is not a user obligation defined in end-user device policies. Rather, this statement is a feature or functionality that may be enabled or disabled by the organization or the device manager, depending on the security and compliance needs of the organization. This statement may also be part of a device configuration policy or a mobile device management policy, which are different from end-user device policies. Therefore, option D is the correct answer, as it is the only one that does not reflect a user obligation defined in end-user device policies. References: The following resources support the verified answer and explanation:
Information classification of personal information may trigger specific regulatory obligations. Which statement is the BEST response from a privacy perspective:
Personally identifiable financial information includes only consumer report information
Public personal information includes only web or online identifiers
Personally identifiable information and personal data are similar in context, but may have different legal definitions based upon jurisdiction
Personally Identifiable Information and Protected Healthcare Information require the exact same data protection safequards
Personal information is any information that can be used to identify an individual, either directly or indirectly, such as name, address, email, phone number, ID number, etc. Personal data is a term used in some jurisdictions, such as the European Union, to refer to personal information that is subject to data protection laws and regulations. However, the scope and definition of personal data may vary depending on the jurisdiction and the context. For example, the GDPR defines personal data as “any information relating to an identified or identifiable natural person” and includes online identifiers, such as IP addresses, cookies, or device IDs, as well as special categories of data, such as biometric, genetic, health, or political data. On the other hand, the US does not have a single federal law that regulates personal data, but rather a patchwork of sector-specific and state-level laws that may have different definitions and requirements. For example, the California Consumer Privacy Act (CCPA) defines personal information as “information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household” and excludes publicly available information from its scope. Therefore, from a privacy perspective, it is important to understand the different legal definitions and obligations that may apply to personal information or personal data depending on the jurisdiction and the context of the data processing activity. References:
Which of the following statements is FALSE regarding a virtual assessment:
Virtual assessment agendas and planning should identify who should be available for interviews
Virtual assessment planning should identify what documentation is available for review prior to and during the assessment
Virtual assessments should be used to validate or confirm understanding of key controls, and not be used simply to review questionnaire responses
Virtual assessments include using interviews with subject matter experts since controls evaluation and testing cannot be performed virtually
Virtual assessments are a method of conducting third party risk assessments remotely, using various tools and techniques to collect and verify information about the third party’s controls, processes, and performance. Virtual assessments can be used to evaluate various risk domains, such as information security, privacy, resiliency, and compliance, depending on the scope and objectives of the assessment. Virtual assessments can also be used to complement or supplement onsite assessments, especially when travel or access restrictions are in place.
One of the key components of virtual assessments is the use of interviews with subject matter experts (SMEs) from the third party, who can provide insights and clarifications on the third party’s policies, procedures, practices, and evidence. Interviews can also be used to validate or confirm the understanding of key controls, and not just to review questionnaire responses. However, interviews are not the only way to perform controls evaluation and testing in virtual assessments. Other methods include:
Therefore, the statement that virtual assessments include using interviews with SMEs since controls evaluation and testing cannot be performed virtually is false, as there are other ways to perform controls evaluation and testing in virtual assessments, besides interviews.
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 factor is MOST important when scoping assessments of cloud-based third parties that access, process, and retain personal data?
The geographic location of the vendor's outsourced datacenters since assessments are only required for international data transfers
The identification of the type of cloud hosting deployment or service model in order to confirm responsibilities between the third party and the cloud hosting provider
The definition of requirements for backup capabilities for power generation and redundancy in the resilience plan
The contract terms for the configuration of the environment which may prevent conducting the assessment
The most important factor when scoping assessments of cloud-based third parties that access, process, and retain personal data is to identify the type of cloud hosting deployment or service model. This is because different cloud models have different implications for the allocation of security responsibilities between the third party and the cloud hosting provider. For example, in a Software as a Service (SaaS) model, the cloud provider is responsible for most of the security controls, while in an Infrastructure as a Service (IaaS) model, the third party is responsible for securing its own data and applications. Therefore, it is essential to understand the type of cloud model and the corresponding security roles and responsibilities before conducting an assessment. This will help to avoid gaps, overlaps, or conflicts in security controls and expectations. 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 type of contract termination is MOST likely to occur after failure to remediate assessment findings?
Regulatory/supervisory termination
Termination for convenience
Normal termination
Termination for cause
Termination for cause is the type of contract termination that is most likely to occur after failure to remediate assessment findings. This is because termination for cause is based on a breach of contract by the third-party, such as non-compliance, poor performance, fraud, or misconduct. Failure to remediate assessment findings indicates that the third-party has not met the contractual obligations or expectations of the entity, and thus exposes the entity to increased risk and liability. Termination for cause allows the entity to end the contract immediately or after a notice period, and to seek damages or remedies from the third-party. Termination for cause is different from other types of contract termination, such as:
Data loss prevention in endpoint security is the strategy for:
Assuring there are adequate data backups in the event of a disaster
Preventing exfiltration of confidential information by users who access company systems
Enabling high-availability to prevent data transactions from loss
Preventing malware from entering secure systems used for processing confidential information
According to the Shared Assessments Certified Third Party Risk Professional (CTPRP) Study Guide, data loss prevention (DLP) is a strategy for preventing the unauthorized disclosure, transfer, or misuse of sensitive data, such as personally identifiable information (PII), personal health information (PHI), or intellectual property (IP)1. Endpoint security is a component of DLP that focuses on protecting the devices (such as laptops, tablets, or smartphones) that access and store sensitive data from internal or external threats2. Therefore, data loss prevention in endpoint security is the strategy for preventing exfiltration of confidential information by users who access company systems, as this could result in data breaches, regulatory fines, reputational damage, or competitive disadvantage3.
The other options are not the best descriptions of data loss prevention in endpoint security, as they either relate to different aspects of data protection or security, or do not address the specific goal of preventing data exfiltration. Data backups are a strategy for ensuring data recovery in the event of a disaster, but they do not prevent data loss or leakage from unauthorized access or transfer. High-availability is a strategy for ensuring data availability and continuity, but it does not prevent data loss or leakage from malicious or accidental actions. Malware prevention is a strategy for ensuring data integrity and confidentiality, but it does not prevent data loss or leakage from legitimate users who may misuse or overshare data.
References:
Which of the following is NOT an attribute in the vendor inventory used to assign risk rating and vendor classification?
Type of data accessed, processed, or retained
Type of systems accessed
Type of contract addendum
Type of network connectivity
Vendor inventory is a list of all the third-party vendors that an organization engages with, along with relevant information about their products, services, contracts, and risks. Vendor inventory is a crucial tool for vendor risk management, as it helps an organization identify, assess, monitor, and mitigate the potential risks associated with its vendors. Vendor inventory also helps an organization prioritize its vendor oversight activities, allocate its resources efficiently, and comply with its regulatory obligations12.
One of the key steps in creating and maintaining a vendor inventory is to assign a risk rating and a vendor classification to each vendor, based on various attributes that reflect the level of risk and criticality they pose to the organization. The risk rating and vendor classification help an organization determine the frequency and depth of its vendor due diligence, review, and audit processes, as well as the appropriate controls and remediation actions to implement3 .
Some of the common attributes used to assign risk rating and vendor classification are :
The type of contract addendum is NOT an attribute used to assign risk rating and vendor classification, as it is not directly related to the risk or criticality of the vendor. The type of contract addendum is a legal document that modifies or supplements the original contract between the vendor and the organization, such as adding or deleting terms, clauses, or provisions. The type of contract addendum may reflect the changes or updates in the vendor relationship, such as scope, duration, price, service level, etc., but it does not indicate the level of risk or impact that the vendor has on the organization. Therefore, the type of contract addendum is not a relevant factor for vendor risk assessment and management . 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 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 statement is TRUE regarding the tools used in TPRM risk analyses?
Risk treatment plans define the due diligence standards for third party assessments
Risk ratings summarize the findings in vendor remediation plans
Vendor inventories provide an up-to-date record of high risk relationships across an organization
Risk registers are used for logging and tracking third party risks
Risk registers are tools that help organizations document, monitor, and manage their third party risks. They typically include information such as the risk description, category, source, impact, likelihood, rating, owner, status, and action plan. Risk registers enable organizations to prioritize their risks, assign responsibilities, track progress, and report on their risk posture. According to the CTPRP Study Guide, "A risk register is a tool for capturing and managing risks throughout the third-party lifecycle. It provides a comprehensive view of the organization’s third-party risk profile and facilitates risk reporting and communication."1 Similarly, the GARP Best Practices Guidance for Third-Party Risk states, "A risk register is a tool that records and tracks the risks associated with third parties. It helps to identify, assess, and prioritize risks, as well as to assign ownership, mitigation actions, and target dates."2
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Which of the following components are typically NOT part of a cloud hosting vendor assessment program?
Reviewing the entity's image snapshot approval and management process
Requiring security services documentation and audit attestation reports
Requiring compliance evidence that provides the definition of patching responsibilities
Conducting customer performed penetration tests
A cloud hosting vendor assessment program is a process of evaluating the security, compliance, and performance of a cloud service provider (CSP) that hosts an organization’s data or applications. A cloud hosting vendor assessment program typically includes the following components123:
The component that is typically NOT part of a cloud hosting vendor assessment program is conducting customer performed penetration tests. Penetration testing is a method of simulating a cyberattack on a system or network to identify and exploit vulnerabilities and weaknesses. While penetration testing can be a valuable tool to assess the security posture of a CSP, it is not usually included in a cloud hosting vendor assessment program for the following reasons :
Therefore, the verified answer to the question is D. Conducting customer performed penetration tests.
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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:
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Which factor is less important when reviewing application risk for application service providers?
Remote connectivity
The number of software releases
The functionality and type of data the application processes
APl integration
When reviewing application risk for application service providers, the most important factors are the functionality and type of data the application processes, the remote connectivity options, and the APl integration methods. These factors determine the level of exposure, sensitivity, and complexity of the application, and thus the potential impact and likelihood of a security breach or a compliance violation. The number of software releases is less important, as it does not directly affect the application’s security or functionality. However, it may indicate the maturity and quality of the software development process, which is another aspect of application risk assessment. References:
You receive a call from a vendor that two laptops and a tablet are missing that were used to process your company data. The asset loss occurred two years ago, but was only recently discovered. That statement may indicate that this vendor is lacking an adequate:
Asset Management Program
Physical and Environmental Security Program
Data Loss Prevention Program
Information Security Incident Notification Policy
The scenario described indicates a lack in the vendor's Asset Management Program. An effective Asset Management Program includes maintaining an accurate inventory of hardware and devices, monitoring their status, and promptly identifying and responding to any losses or discrepancies. The failure to discover the loss of laptops and a tablet that processed company data for two years suggests deficiencies in tracking and managing physical assets. This lapse can lead to risks associated with data security, regulatory compliance, and operational integrity. A robust Asset Management Program should ensure that all assets are accounted for, their usage is monitored, and any anomalies or losses are quickly identified and addressed.
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Which approach demonstrates GREATER maturity of physical security compliance?
Leveraging periodic reporting to schedule facility inspections based on reported events
Providing a checklist for self-assessment
Maintaining a standardized scheduled for confirming controls to defined standards
Conducting unannounced checks an an ac-hac basis
According to the Shared Assessments Certified Third Party Risk Professional (CTPRP) Study Guide, physical security compliance is the process of ensuring that the physical assets and personnel of an organization are protected from unauthorized access, theft, damage, or harm1. Physical security compliance can be achieved by implementing various measures, such as locks, alarms, cameras, guards, fences, badges, etc. However, these measures need to be regularly monitored, tested, and verified to ensure their effectiveness and alignment with the defined standards and policies2. Therefore, maintaining a standardized schedule for confirming controls to defined standards demonstrates a greater maturity of physical security compliance, as it indicates a proactive and consistent approach to assessing and improving the physical security posture of an organization3.
The other options do not reflect a high level of physical security compliance maturity, as they either rely on reactive or ad hoc methods, or lack sufficient verification and validation mechanisms. Leveraging periodic reporting to schedule facility inspections based on reported events may indicate a lack of preventive and predictive measures, as well as a dependency on external or internal incidents to trigger the inspections. Providing a checklist for self-assessment may indicate a lack of independent and objective evaluation, as well as a potential for bias or error in the self-assessment process. Conducting unannounced checks on an ad hoc basis may indicate a lack of planning and coordination, as well as a potential for disruption or inconsistency in the checks.
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When evaluating remote access risk, which of the following is LEAST applicable to your analysis?
Logging of remote access authentication attempts
Limiting access by job role of business justification
Monitoring device activity usage volumes
Requiring application whitelisting
Application whitelisting is a security technique that allows only authorized applications to run on a device or network, preventing malware or unauthorized software from executing. While this can be a useful security measure, it is not directly related to remote access risk evaluation, which focuses on the security of the connection and the access rights of the remote users. The other options are more relevant to remote access risk evaluation, as they help to monitor, control, and audit the remote access activities and prevent unauthorized or malicious access. References:
Which of the following is typically NOT included within the scape of an organization's network access policy?
Firewall settings
Unauthorized device detection
Website privacy consent banners
Remote access
A network access policy is a set of rules and conditions that define how authorized users and devices can access the network resources and services of an organization. It typically includes the following elements12:
Therefore, the correct answer is C. Website privacy consent banners, as they are typically not included within the scope of an organization’s network access policy. References:
Which of the following data safeguarding techniques provides the STRONGEST assurance that data does not identify an individual?
Data masking
Data encryption
Data anonymization
Data compression
Data anonymization is the process of removing or altering any information that can be used to identify an individual from a data set. This technique provides the strongest assurance that data does not identify an individual, as it makes it impossible or extremely difficult to link the data back to the original source. Data anonymization can be achieved by various methods, such as generalization, suppression, perturbation, or pseudonymization12. Data anonymization is often used for privacy protection, compliance with data protection regulations, and data sharing purposes3. References:
TESTED 19 Apr 2025