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Government regulations and political stability are crucial factors for compliance and legal obligations, especially in global third-party relationships. These factors can significantly affect a vendor’s ability to operate smoothly and meet contractual obligations, hence they should be prioritized in the risk assessment process.

Periodic risk assessments specifically to determine EOL are not typically included in IT asset EOL processes. EOL determinations are based more on operational effectiveness and other mentioned factors rather than on risk assessments, which are more general and not focused solely on EOL status.

In the e-commerce scenario, the primary focus should be on how the payment gateway outage affects sales transactions and overall online revenue, as this directly correlates to the business’s ability to generate income during the outage.

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:
* Logging: This means that any change request or proposal is recorded in a change log or a change register, along with the details of the change initiator, the change description, the change category, the change priority, the change status, and the change history. Logging helps to track and monitor the progress and outcome of each change, and to provide an audit trail for compliance purposes.
* Approvals: This means that any change request or proposal is reviewed and approved by the appropriate authority or stakeholder, such as the project manager, the sponsor, the customer, the steering committee, or the regulatory body. Approvals help to ensure that the change is justified, feasible, aligned with the project or program objectives, and acceptable to the affected parties.
* Validation: This means that any change request or proposal is verified and tested to ensure that it meets the quality standards, the functional and non-functional requirements, and the expected benefits and outcomes. Validation helps to ensure that the change is implemented correctly, effectively, and efficiently, and that it does not introduce any errors, defects, or risks.
* Back-out and exception procedures: This means that any change request or proposal has a contingency plan or a rollback plan in case the change fails, causes problems, or is rejected. Back-out and exception procedures help to minimize the negative impact of the change, and to restore the original state or the baseline of the project or program. They also help to handle any deviations or issues that may arise during the change implementation or the change review.
References:
* CTPRP Job Guide
* An Agile Approach to Change Management
* CM Overview
* Management Artifacts and its Types
* Achieving Regulatory and Industry Standards Compliance with the Scaled Agile Framework
* 8 Steps for an Effective Change Management Process

Auditors would likely assess the effectiveness of encryption on sensitive data within the ‘Private internal’ layer to ensure that the data remains secure from unauthorized access and breaches. This assessment helps verify that the encryption protocols are adequately protecting the data as intended.

Having updated and tested communication tools is essential for effective communication during an emergency, ensuring that all occupants receive timely and clear instructions and updates about the situation, which is crucial for maintaining order and safety.

To strengthen an organization’s risk reality effectively, it is essential to implement values and practices that promote consistent, risk-aware decision-making. This involves cultivating an environment where risk considerations are naturally integrated into daily decisions, ensuring that the organization’s approach to risk management is proactive and deeply embedded in its culture.

The correct answer details the initial actions required, including assessing the severity and impact of the incident and activating the appropriate response team. This ensures that the incident is managed effectively and with the appropriate level of response.

The primary objective of a third party risk assessment is to validate that the vendor/service provider has adequate controls in place based on the organization’s risk posture. A third party risk assessment (also known as supplier risk assessment) quantifies the risks associated with third-party vendors and suppliers that provide products or services to your organization1. This assessment is useful for analyzing both new and ongoing supplier relationships. The growing risk of supply chain attacks makes it critical to conduct thorough and regular risk assessments of your third parties. A third party risk assessment helps you identify, measure, and mitigate the potential risks that your third parties pose to your organization, such as data breaches, cyberattacks, compliance violations, operational disruptions, reputational damage, or financial losses. A third party risk assessment also helps you align your third party risk management (TPRM) program with your organization’s risk appetite, policies, standards, and procedures. A third party risk assessment typically involves the following steps1:
* Scoping: Define the scope of the assessment based on the type, nature, and criticality of the third party relationship. Determine the relevant risk domains, such as security, privacy, compliance, business continuity, etc.
* Data collection: Gather information from the third party using various methods, such as questionnaires, surveys, interviews, audits, tests, or evidence reviews.
* Analysis: Analyze the data collected and compare it with your organization’s risk criteria, benchmarks, and best practices. Identify any gaps, weaknesses, or issues in the third party’s controls, processes, or performance.
* Reporting: Document the findings and recommendations of the assessment in a clear and concise report.
Communicate the results to the relevant stakeholders, such as senior management, business owners, or regulators.
* Remediation: Follow up with the third party to ensure that they implement the necessary actions to address the identified risks. Monitor and track the progress and effectiveness of the remediation plan.
* Review: Review and update the assessment periodically or whenever there are significant changes in the third party relationship, the risk environment, or the regulatory requirements.
The other statements are not the primary objective of a third party risk assessment, although they may be related or secondary objectives. Assessing the appropriateness of non-disclosure agreements regarding the organization’s systems/data is a legal objective that may be part of the contract negotiation or review process.
Determining the scope of the business relationship is a strategic objective that may be part of the vendor selection or due diligence process. Evaluating the risk posture of all vendors/service providers in the vendor inventory is a holistic objective that may be part of the vendor risk management or governance process.
References:
* 1: Third-Party Risk Assessment: A Practical Guide – BlueVoyant
* : What Is Third-Party Risk Management (TPRM)? 2024 Guide | UpGuard
* : What is Third-Party Risk Management? | Blog | OneTrust

The appropriate use of a remote wipe feature is exemplified when a company device containing sensitive information is lost during business travel, necessitating immediate action to secure the data.

Including stipulations in contracts that require notification and approval for any subcontracting activities is a critical measure for managing Fourth-Nth party risks. This ensures that the organization retains control over who is involved in its supply chain and that all entities meet the established security and compliance requirements.

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:
* 1: Contracts and third-party risk – KPMG UK
* 2: Third-Party Risk & Contract Management: A Comprehensive Beginner’s Guide – Trackado
* 3: What Is an Evergreen Contract? | Legal Beagle
* : [Best Practices Guidance for Third Party Risk – GARP]
* : Third-Party Risk Management: A Comprehensive Guide – UpGuard
* : Statement of Work (SOW) – Definition, Contents & Examples
* : How to Write a Statement of Work for Any Industry | Smartsheet

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:
* Guidance on Cloud Security Assessment and Authorization – ITSP.50.105, Canadian Centre for Cyber Security, May 2020, Section 2.1.1
* The Importance of Properly Scoping Cloud Environments, PCI Security Standards Council and Cloud Security Alliance, August 2021
* Third party and cloud: Regulatory challenges, KPMG, 2022, Section 2.1
* Certified Third Party Risk Professional (CTPRP) Study Guide, Shared Assessments, 2021, Section 4.2.2

Software as a Service (SaaS) is a cloud deployment model that provides users with access to software applications over the internet, without requiring them to install, maintain, or update the software on their own devices. SaaS is primarily focused on the application layer, as it delivers the complete functionality of the software to the end users, while abstracting away the underlying infrastructure, platform, and middleware layers. SaaS providers are responsible for managing the servers, databases, networks, security, and scalability of the software, as well as ensuring its availability, performance, and compliance. SaaS users only pay for the software usage, usually on a subscription or pay-per-use basis, and can access the software from any device and location, as long as they have an internet connection. Some examples of SaaS applications are Gmail, Salesforce, Dropbox, and Netflix. References:
* Shared Assessments CTPRP Study Guide, page 15, section 2.2.2
* Cloud Computing Deployment Models and Architectures, section on Cloud Computing Models
* Layered Architecture of Cloud, section on Application Layer

Data subjects must be notified without undue delay if the data breach poses a high risk to their rights and freedoms, emphasizing the importance of timely and transparent communication to mitigate potential harm.

The correct answer specifies the range of external parties that must be informed according to the protocols, ensuring all relevant stakeholders are appropriately notified.