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Shared Assessments Certified Third-Party Risk Professional (CTPRP) Sample Questions (Q307-Q312):
NEW QUESTION # 307
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?
Answer: C
Explanation:
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:
* The General Data Protection Regulation (GDPR): This is a European Union regulation that governs the collection, processing, and transfer of personal data of individuals in the EU. The GDPR requires organizations to implement appropriate technical and organizational measures to protect the personal data, and to only engage with service providers that can provide sufficient guarantees of data protection.
The GDPR also requires organizations to enter into written contracts with their service providers that specify the subject matter, duration, nature, and purpose of the data processing, as well as the rights and obligations of both parties. The GDPR also imposes strict notification and reporting requirements in case of data breaches or violations.
* The Health Insurance Portability and Accountability Act (HIPAA): This is a US federal law that regulates the privacy and security of health information of individuals. The HIPAA requires covered entities, such as health care providers, health plans, and health care clearinghouses, to safeguard the health information of their patients, and to only disclose or share it with authorized parties. The HIPAA also requires covered entities to enter into business associate agreements with their service providers that handle or access the health information on their behalf. These agreements must specify the permitted and required uses and disclosures of the health information, the safeguards and measures to protect the health information, and the reporting and notification obligations in case of breaches or incidents.
* The Sarbanes-Oxley Act (SOX): This is a US federal law that aims to improve the accuracy and reliability of corporate financial reporting and disclosure. The SOX requires public companies to establish and maintain internal controls over their financial reporting processes, and to assess and report on the effectiveness of these controls. The SOX also requires public companies to ensure that their external auditors are independent and qualified, and to disclose any material weaknesses or deficiencies in their internal controls. The SOX also applies to the service providers that perform or support the financial reporting functions of the public companies, such as accounting firms, information technology vendors, or consultants. The SOX requires public companies to evaluate and monitor the internal controls of their service providers, and to include them in their scope of audit and reporting.
References:
* Third-Party Risk Management and Mitigation | Gartner
* Best Practices to Jumpstart Third-Party Risk Management Program
* Third-party risk management best practices and why they matter
* GDPR and Third-Party Risk Management
* HIPAA Compliance for Business Associates and Third-Party Service Providers
* SOX Compliance Requirements for Third-Party Service Providers
NEW QUESTION # 308
How does a risk register facilitate communication within an organization?
Answer: A
Explanation:
A risk register facilitates communication by providing a structured format that is accessible to multiple departments or stakeholders within an organization. This enables ongoing discussions and reviews of risks, enhancing the collaborative effort to manage and mitigate these risks effectively.
NEW QUESTION # 309
Which example of analyzing a vendor's response should trigger further investigation of their information security policies?
Answer: C
Explanation:
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:
* Establishing criteria and standards for selecting and evaluating third parties based on their information security capabilities and performance
* Conducting regular and comprehensive assessments and audits of third parties' information security policies, practices, and incidents
* Ensuring contractual agreements and service level agreements (SLAs) with third parties include information security clauses and obligations
* Maintaining visibility and communication with third parties regarding their information security status and issues
* Implementing corrective actions and remediation plans for any identified information security gaps or weaknesses
* Terminating or suspending the relationship with third parties that fail to meet the information security expectations or requirements If a vendor's response does not specify any requirements for third party governance and oversight, it should trigger further investigation of their information security policies.
This indicates that the vendor may not have a comprehensive and effective approach to managing the information security risks and impacts of their extended network of partners. This could expose the vendor and their clients to potential data breaches, cyberattacks, compliance violations, or reputational
* damages. Therefore, the vendor should be asked to provide more details and evidence of how they ensure the information security of their third parties, and how they address any information security incidents or issues involving their third parties. References:
* 1: Third-Party Information Security Risk Management Policy - SecurityStudio
* 2: Ensuring Data Protection for Third Parties: Best Practices | UpGuard Blog
NEW QUESTION # 310
A company's contract with a vendor includes clauses on data breach notification. What should be detailed in these clauses?
Answer: A
Explanation:
Clauses related to data breach notification in contracts should detail the procedures for notifying relevant stakeholders, define the timelines for such notifications, and describe what information must be shared. This ensures a coordinated and timely response that complies with legal and contractual obligations.
NEW QUESTION # 311
Which of the following is NOT typically included in IT asset end-of-life (EOL) processes?
Answer: C
Explanation:
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.
NEW QUESTION # 312
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