Question 487 of 1,013
Vendor Due Diligence: Best First Action Before Contract
A company is considering a new SaaS vendor that will process customer records. What is the best first action before signing the contract?
Quick Answer
The answer is to perform vendor due diligence and review the vendor’s security controls before signing any contract. This is the correct first action because it proactively assesses whether the SaaS vendor’s security posture can adequately protect customer records, aligning with the Security+ principle of “trust but verify.” By reviewing controls like encryption, access management, and compliance certifications (e.g., GDPR, HIPAA), you identify risks before any data is shared or a legally binding agreement is signed. On the SY0-701 exam, this question tests your understanding of the third-party risk management lifecycle, often appearing as a trap where students choose “sign a BPA” or “run a penetration test” too early—remember, due diligence comes before any legal or technical action. A helpful memory tip is “DD before BPA”: Due Diligence must happen before you even discuss a Business Partner Agreement.
⚠ Common exam trap
Candidates often think 'allowing access immediately and monitoring' is acceptable due to a false sense of security from logging tools, but CompTIA tests that proactive due diligence is mandatory before any data sharing, as monitoring alone cannot prevent contractual or compliance violations.
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
✓
Perform vendor due diligence and review the vendor's security controls
Performing vendor due diligence and reviewing the vendor's security controls is the best first action because it proactively assesses the SaaS vendor's ability to protect customer records before any data is shared. This aligns with the principle of 'trust but verify' and ensures that the vendor's security posture meets the company's compliance requirements (e.g., GDPR, HIPAA) and risk tolerance before signing a legally binding contract.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Perform vendor due diligence and review the vendor's security controls
Why this is correct
Before onboarding a vendor that will handle sensitive records, the organization should evaluate the vendor's security posture, contractual terms, and control maturity.
- ✗
Allow the vendor access immediately and monitor for misuse afterward
Why it's wrong here
Granting access first creates unnecessary risk and skips the basic review needed before data is shared.
- ✗
Ask the vendor to send a marketing brochure and pricing sheet only
Why it's wrong here
Marketing materials do not provide security evidence or assurance about how customer data will be protected.
- ✗
Wait until a security incident occurs before reviewing the vendor
Why it's wrong here
Incident-driven review is too late; due diligence is meant to prevent or reduce risk before onboarding.
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Same concept, more angles
1 more way this is tested on SY0-701
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 company is evaluating a new payroll SaaS provider that will store employee tax and bank details. Before signing the contract, which action BEST supports vendor due diligence?
medium- A.Ask the vendor for a marketing brochure describing platform features and uptime claims.
- ✓ B.Review a current independent security attestation and verify contractual security obligations.
- C.Accept the vendor’s assurance that its customers have never experienced incidents.
- D.Wait until after go-live and then review the security posture during the first annual audit.
Why B: Vendor due diligence for a SaaS provider handling sensitive employee data (tax and bank details) requires verifying independent security attestations (e.g., SOC 2 Type II, ISO 27001 certification) and ensuring contractual security obligations (e.g., data encryption, breach notification, right to audit) are explicitly defined. This provides objective, audited evidence of the vendor's security posture rather than relying on marketing claims or unverified assurances.
Last reviewed: Jun 11, 2026
This SY0-701 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 SY0-701 exam.
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