hardMultiple ChoiceObjective-mapped
CAS-004 Practice Question: During a third-party risk assessment, an…
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?
⚠ Common exam trap
The CAS-004 exam 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.
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.
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.
- ✗
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.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This CAS-005 practice question is part of Courseiva's free CompTIA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CAS-005 exam.