- A
Insert a right-to-audit clause allowing the organization to inspect the CSP's facilities.
Why wrong: Audit rights provide visibility but do not prevent data from being stored in conflicting jurisdictions.
- B
Include a Data Processing Agreement (DPA) that requires data to be stored only in approved jurisdictions.
A DPA with data residency clauses legally restricts where data can be stored, addressing the compliance risk.
- C
Negotiate a service-level agreement (SLA) guaranteeing 99.99% uptime.
Why wrong: Uptime guarantees do not address data residency or conflicting privacy laws.
- D
Require the CSP to sign a business associate agreement (BAA) under HIPAA.
Why wrong: A BAA is specific to healthcare data; it does not address data residency or general privacy laws.
Quick Answer
The correct answer is to include a Data Processing Agreement (DPA) that requires data to be stored only in approved jurisdictions. This clause directly addresses the CSP data jurisdiction conflict by legally binding the provider to specific geographic data handling requirements, thereby mitigating the compliance risk of conflicting privacy laws and potential regulatory penalties. On the CompTIA SecurityX CAS-004 exam, this scenario tests your understanding of third-party risk management and contractual controls, often appearing in questions about vendor assessments or data sovereignty. A common trap is to confuse a DPA with a Service Level Agreement (SLA), which focuses on uptime rather than data residency. Remember the memory tip: DPA = Data Placement Agreement, ensuring your data stays in the approved place.
CAS-004 Governance, Risk and Compliance Practice Question
This CAS-004 practice question tests your understanding of governance, risk and compliance. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. 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.
During a third-party risk assessment, an organization discovers that a cloud service provider (CSP) stores data in a jurisdiction with conflicting privacy laws. The organization's legal team advises that this could expose the organization to regulatory penalties. Which of the following contractual clauses would best address this compliance risk?
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 choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Include a Data Processing Agreement (DPA) that requires data to be stored only in approved jurisdictions.
A Data Processing Agreement (DPA) is the correct contractual mechanism to enforce data residency restrictions. By requiring the CSP to store data only in approved jurisdictions, the DPA directly addresses the compliance risk of conflicting privacy laws and potential regulatory penalties, as it legally binds the provider to specific geographic data handling requirements.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Insert a right-to-audit clause allowing the organization to inspect the CSP's facilities.
Why it's wrong here
Audit rights provide visibility but do not prevent data from being stored in conflicting jurisdictions.
- ✓
Include a Data Processing Agreement (DPA) that requires data to be stored only in approved jurisdictions.
Why this is correct
A DPA with data residency clauses legally restricts where data can be stored, addressing the compliance risk.
Clue confirmation
The clue word "best" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Negotiate a service-level agreement (SLA) guaranteeing 99.99% uptime.
Why it's wrong here
Uptime guarantees do not address data residency or conflicting privacy laws.
- ✗
Require the CSP to sign a business associate agreement (BAA) under HIPAA.
Why it's wrong here
A BAA is specific to healthcare data; it does not address data residency or general privacy laws.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Cisco often tests the distinction between operational controls (audit clauses, SLAs) and legal/compliance controls (DPAs), trapping candidates who confuse visibility with enforcement or apply US-specific agreements (like BAAs) to global privacy issues.
Detailed technical explanation
How to think about this question
Under the hood, a DPA typically incorporates Standard Contractual Clauses (SCCs) or Binding Corporate Rules (BCRs) to legally enforce data transfer restrictions, often referencing specific geographic boundaries like the EU/EEA. In a real-world scenario, if a CSP uses sub-processors in a jurisdiction with conflicting laws (e.g., the US CLOUD Act vs. GDPR), the DPA must explicitly prohibit such transfers or require additional safeguards like encryption with keys held outside that jurisdiction.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A practitioner preparing for the CAS-004 exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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Governance, Risk and Compliance — study guide chapter
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FAQ
Questions learners often ask
What does this CAS-004 question test?
Governance, Risk and Compliance — This question tests Governance, Risk and Compliance — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Include a Data Processing Agreement (DPA) that requires data to be stored only in approved jurisdictions. — A Data Processing Agreement (DPA) is the correct contractual mechanism to enforce data residency restrictions. By requiring the CSP to store data only in approved jurisdictions, the DPA directly addresses the compliance risk of conflicting privacy laws and potential regulatory penalties, as it legally binds the provider to specific geographic data handling requirements.
What should I do if I get this CAS-004 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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?
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 11, 2026
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