The correct course of action is to require the cloud provider to sign a Business Associate Agreement (BAA). Under HIPAA, a BAA is a mandatory contract that ensures any business associate handling electronic protected health information (ePHI) agrees to implement appropriate safeguards and is liable for breaches. Without a BAA, the cloud provider has no contractual obligation to protect patient data, even if they have a SOC 2 report that lacks HIPAA-specific controls. On the CompTIA SecurityX CAS-004 exam, this scenario tests your understanding of the legal and regulatory layers of cloud risk management, often appearing as a distractor where candidates mistakenly accept a SOC 2 report as sufficient. A common trap is thinking encryption alone or risk acceptance replaces the need for a BAA—remember, HIPAA mandates a contractual chain of accountability. Memory tip: BAA = “Before All Access,” meaning you secure the agreement before any ePHI touches the cloud.
CAS-004 Governance, Risk and Compliance Practice Question
This CAS-004 practice question tests your understanding of governance, risk and compliance. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A healthcare organization is planning to migrate patient data to a cloud provider. The risk assessment identifies that the provider's SOC 2 report does not cover HIPAA controls. What is the BEST course of action?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue: "best"
Why it matters: Signals that multiple options may be partially correct. Choose the option that most directly solves the exact problem described, not the one that sounds most complete.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Require the provider to sign a Business Associate Agreement (BAA)
Option B is correct because a BA agreement is required under HIPAA to ensure the provider contractually agrees to safeguard ePHI. Option A is wrong because the risk assessment should drive decisions, not just acceptance. Option C is wrong because encryption does not eliminate the need for contractual protections. Option D is wrong because a SOC 2 report without HIPAA coverage does not suffice.
Key principle: NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Request the provider's most recent SOC 3 report
Why it's wrong here
SOC 3 is a summary and still may not cover HIPAA
✗
Accept the risk and proceed with migration
Why it's wrong here
Risk should be mitigated, not automatically accepted
✓
Require the provider to sign a Business Associate Agreement (BAA)
Why this is correct
Mandatory under HIPAA for covered entities
Clue confirmation
The clue word "best" in the question point toward this answer.
Related concept
Static NAT maps one inside address to one outside address.
✗
Require the provider to encrypt all data at rest and in transit
Why it's wrong here
Encryption is necessary but not sufficient without BAA
Common exam traps
Common exam trap: NAT rules depend on direction and matching traffic
NAT is not only about the public address. The inside/outside interface roles and the ACL or rule that matches traffic are just as important.
Detailed technical explanation
How to think about this question
NAT questions usually test address translation, overload/PAT behaviour, static mappings and whether the right traffic is being translated. Read the interface direction and address terms carefully.
KKey Concepts to Remember
Static NAT maps one inside address to one outside address.
PAT allows many inside hosts to share one public address using ports.
Inside local and inside global describe the private and translated addresses.
NAT ACLs identify traffic for translation, not always security filtering.
TExam Day Tips
→Identify inside and outside interfaces first.
→Check whether the scenario needs static NAT, dynamic NAT or PAT.
→Do not confuse NAT matching ACLs with normal packet-filtering intent.
Key takeaway
NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
Real-world example
How this comes up in practice
A small business has 20 workstations on the 192.168.1.0/24 network and one public IP from its ISP. The router uses PAT (NAT overload) so all 20 devices share one public address using different source ports. NAT questions test whether you understand the four address terms and which direction each translation applies.
What to study next
Got this wrong? Here's your next step.
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related CAS-004 NAT questions on configuration and troubleshooting.
Governance, Risk and Compliance — This question tests Governance, Risk and Compliance — Static NAT maps one inside address to one outside address..
What is the correct answer to this question?
The correct answer is: Require the provider to sign a Business Associate Agreement (BAA) — Option B is correct because a BA agreement is required under HIPAA to ensure the provider contractually agrees to safeguard ePHI. Option A is wrong because the risk assessment should drive decisions, not just acceptance. Option C is wrong because encryption does not eliminate the need for contractual protections. Option D is wrong because a SOC 2 report without HIPAA coverage does not suffice.
What should I do if I get this CAS-004 question wrong?
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related CAS-004 NAT questions on configuration and troubleshooting.
Are there clue words in this question I should notice?
Yes — watch for: "best". Signals that multiple options may be partially correct. Choose the option that most directly solves the exact problem described, not the one that sounds most complete.
What is the key concept behind this question?
Static NAT maps one inside address to one outside address.
About these practice questions
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These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A healthtech startup is developing a mobile app that collects PHI. They plan to use a third-party cloud provider for data storage. What is the most critical compliance requirement before signing the contract?
hard
A.Verify the provider's data center locations comply with data residency laws
✓ B.Execute a Business Associate Agreement (BAA) with the provider
C.Review the provider's SOC 2 Type II report
D.Ensure all data is encrypted at rest and in transit
Why B: Under HIPAA, a Business Associate Agreement (BAA) is a mandatory contract that ensures the third-party cloud provider (a business associate) will safeguard Protected Health Information (PHI). Without a BAA, the startup would be in direct violation of HIPAA's Privacy and Security Rules, regardless of other security measures. This requirement is non-negotiable before any PHI is shared or stored by the provider.
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Question Discussion
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