CGEIT Practice Test 2 — 10 Questions

Question 1

An organization is transitioning from a traditional project-based IT budget to a Value Stream-aligned funding model. Which mechanism is most effective for ensuring that IT investments remain tethered to realized enterprise value?

Choose an answer to begin — your selection is scored in the full session.

Accepted Answer

Integrating Value Stream Key Performance Indicators (KPIs) into the portfolio governance cycle.. Value Stream-aligned funding requires governance mechanisms that measure and steer investment by the value delivered through each stream, so embedding Value Stream KPIs into the portfolio governance cycle creates the feedback loop that keeps funding tethered to realized enterprise value. This connects funding decisions to outcome metrics rather than project completion milestones. It is the only option that directly measures value realization and feeds it back into governance.

Answer

Automating the project portfolio management (PPM) approval workflow.

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Implementing a formal Chargeback accounting system.

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Moving to a strict Capital Expenditure (CAPEX) prioritization process.

Question 2

Which document should provide the framework for how IT resources are prioritized and allocated?

Accepted Answer

IT Strategic Plan. The IT Strategic Plan is the governing document that translates enterprise strategy into IT direction, including how IT resources (budget, people, technology) will be prioritized and allocated over the planning horizon. It provides the framework — principles, investment priorities, and capability roadmap — within which budgets and SLAs operate. The other documents are downstream artifacts that execute or constrain specific aspects of that framework.

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Annual IT Operating Budget

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Disaster Recovery Plan

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Service Level Agreement (SLA)

Question 3

What is the primary benefit of categorizing IT investments into a portfolio?

Accepted Answer

To balance the investment mix between innovation, growth, and maintenance.. IT portfolio management categorizes investments so leadership can see the aggregate mix and deliberately balance spending across innovation (transformational), growth (evolutionary), and maintenance (operational) categories. This balance ensures the organization is not over-investing in keeping the lights on while starving future capability, and it aligns IT spend with strategic risk appetite. The primary benefit is therefore portfolio balance, not scheduling, vendor uniformity, or cost cutting.

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To ensure every project is completed at the same time.

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To force all projects to use the same software vendor.

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To reduce the cost of IT staff salaries.

Question 4

A financial services company is evaluating its IT resource allocation for the upcoming fiscal year. The CIO presents a plan that allocates 85% of the IT budget to maintaining existing infrastructure and only 15% to new strategic initiatives. The board has mandated a digital transformation agenda. Which governance action should the IT steering committee take?

Accepted Answer

Direct the CIO to develop a revised IT investment portfolio that gradually shifts resources towards strategic initiatives while maintaining essential operations.. The IT steering committee should direct the CIO to create a revised investment portfolio that gradually shifts resources toward strategic initiatives. This balances the need for digital transformation with the necessity of maintaining critical operations, ensuring governance oversight and strategic alignment without introducing undue operational risk.

Answer

Approve the budget as presented to ensure operational stability.

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Escalate the decision to the board of directors for a final ruling on the budget.

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Reject the budget and demand an immediate increase in the strategic allocation to 50%.

Question 5

Which action should the governance body take if a major IT risk is identified that exceeds the enterprise's risk appetite?

Accepted Answer

Formally communicate the risk to the board and propose a risk treatment plan. When a major IT risk exceeds the enterprise's risk appetite, the governance body must escalate it formally to the board and propose a risk treatment plan (mitigate, transfer, avoid, or accept with justification). This fulfills the governance body's oversight duty and ensures informed decision-making at the highest level. Simply ignoring or redefining risk appetite to fit the situation undermines the integrity of the risk management framework.

Answer

Wait for the risk to manifest before taking action

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Re-evaluate the definition of risk appetite to match the current state

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Request the IT department to simply delete the system causing the risk

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Ignore the risk if it helps achieve a short-term profit target

Question 6

A healthcare provider is evaluating its IT resource sourcing strategy. The CIO wants to ensure that the strategy supports both cost efficiency and compliance with patient data regulations. Which TWO of the following governance actions are MOST important to include in the sourcing strategy? (Choose two.)

Accepted Answer

Establish a regular review process to monitor vendor performance against both cost and compliance metrics.. A sourcing strategy that supports cost efficiency and compliance must include rigorous vendor evaluation before contracting and continuous monitoring after. These actions ensure that vendors meet regulatory requirements and cost targets throughout the relationship. The other options either impose unnecessary technical constraints, bypass governance, or concentrate risk without addressing compliance.

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Outsource all IT functions to a single vendor to achieve economies of scale.

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Delegate all sourcing decisions to the procurement department to expedite contracting.

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Require all vendors to use the same technology stack as the healthcare provider to simplify integration.

Question 7

Which TWO of the following factors should influence the frequency of risk reporting to the board?

Accepted Answer

The current risk posture and volatility of the environment.. Option B is correct because the frequency of risk reporting should be driven by the organization's current risk posture and the volatility of its environment — when risk levels are elevated or the threat landscape is changing rapidly, the board needs more frequent updates to maintain effective oversight. Option E is correct because risks that are significant to business objectives (for example, those threatening critical services, regulatory compliance, or strategic goals) warrant more frequent reporting than low-impact risks, since the board's primary governance role is to protect the achievement of those objectives. The remaining options do not belong: the size of the IT office building (A) is a physical facility detail with no bearing on governance reporting cadence, the number of years board members have served (C) is a tenure consideration unrelated to risk materiality or volatility, and the color of the report cover page (D) is a cosmetic formatting choice with no impact on reporting frequency.

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The size of the IT office building.

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The number of years the board members have served.

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The color of the risk report cover page.

Question 8

A newly appointed CIO is establishing an IT governance framework. Which approach best ensures that IT governance activities are integrated into existing business decision-making processes?

Accepted Answer

Embedding IT governance roles and responsibilities into existing business management functions. Embedding IT governance roles and responsibilities into existing business management functions ensures governance is not a parallel silo but part of how the business already makes decisions. This approach leverages existing decision-making forums, reporting lines, and accountability structures, which is the most effective way to integrate IT governance into business processes per COBIT and ISO/IEC 38500.

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Requiring all IT decisions to be signed off by the board of directors

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Implementing an IT-only governance framework based strictly on COBIT 2019

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Creating a separate IT governance committee with independent reporting lines

Question 9

What is the primary role of the IT governance framework in an enterprise?

Accepted Answer

To align IT strategy with business strategy and deliver value. The primary role of an IT governance framework is to align IT strategy with business strategy and ensure IT delivers value while managing risk and optimizing resources. This alignment is the core purpose defined by ISO/IEC 38500 and COBIT, ensuring IT investments support business objectives rather than operating as a separate technical function.

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To serve as a technical manual for system administration

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To automate all IT monitoring and reporting

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To replace the need for IT management

Question 10

Which THREE activities are required when managing the 'Benefits Lifecycle'?

Accepted Answer

Tracking the realization of benefits after implementation.. The Benefits Lifecycle requires identifying and quantifying potential benefits (E) so that expected value is defined, measurable, and agreed before delivery begins. It also requires ensuring project deliverables align with business requirements (C), because benefits can only be realized if the outputs actually satisfy the intended business outcomes. Finally, it requires tracking the realization of benefits after implementation (B), since benefits management continues post-delivery to verify that the forecast value is actually achieved. Options A and D do not belong: reducing stakeholder numbers is not a benefits lifecycle activity, and updating source code documentation is a technical maintenance task unrelated to benefits management.

Answer

Reducing the number of project stakeholders.

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Updating the project's source code documentation.