Third-Party Due Diligence: Security Questionnaire, Audit Report
Before contracting with a cloud-based payroll provider, the security team requests a security questionnaire, proof of controls, and an independent audit report. What activity is this?
Quick Answer
The answer is third-party due diligence, because the security team is systematically evaluating a vendor’s security posture before entering a contract. This process involves reviewing a security questionnaire to assess policies, proof of controls such as SOC 2 reports to verify implemented safeguards, and an independent audit report to confirm compliance with standards like ISO 27001. On the Security+ SY0-701 exam, this concept tests your understanding of vendor risk management and supply chain security, often appearing in questions about pre-onboarding assessments. A common trap is confusing this with penetration testing or vulnerability scanning, which are reactive technical checks, not proactive vendor evaluations. Remember the mnemonic “Q-A-R” for Questionnaire, Audit report, and Report of controls—these three artifacts form the core of any thorough third-party due diligence review.
⚠ Common exam trap
Many candidates confuse third-party due diligence with business continuity testing, because both involve reviewing documentation, but due diligence is pre-contractual risk evaluation, not post-incident recovery verification.
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
✓
Third-party due diligence, because the team is evaluating vendor risk before onboarding.
The security team's request for a security questionnaire, proof of controls, and an independent audit report before contracting with a cloud-based payroll provider is a classic example of third-party due diligence. This process evaluates the vendor's security posture, compliance, and risk level before onboarding, ensuring that sensitive payroll data is protected. It is a proactive risk management activity, not a reactive test or training exercise.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Business continuity testing, because the team is checking recovery procedures.
Why it's wrong here
Business continuity testing validates recovery procedures and failover, not a supplier's control posture. Requesting questionnaires, control evidence and an independent audit report is vendor due diligence, assessing a third party's security before onboarding. Continuity testing would be correct for exercising your own recovery plans after a disruption.
- ✓
Third-party due diligence, because the team is evaluating vendor risk before onboarding.
Why this is correct
Third-party due diligence is the process of reviewing a vendor’s security posture, controls, and supporting evidence before trusting them with business data or services. The questionnaire and audit report are classic inputs for that review.
- ✗
Security awareness training, because the vendor is being taught safe behavior.
Why it's wrong here
Requesting questionnaires, control evidence and independent audit reports is vendor due diligence and third-party risk assessment, not teaching safe behaviour. Awareness training is tempting because it also addresses human behaviour, but it targets internal staff, whereas this activity evaluates a supplier's controls before contracting.
- ✗
Data classification, because the team is labeling the payroll data type.
Why it's wrong here
Data classification labels information by sensitivity to determine handling rules; it produces no questionnaire, control evidence or audit report. The scenario describes assessing a supplier's security posture before contracting, which is vendor due diligence. Classification would be correct when deciding how payroll data must be stored, shared and protected internally.
Go deeper
Related to this question
Learn chapter
Security Awareness Training
Key term
Compliance
Compliance is the process of ensuring that an organization follows laws, regulations, standards, and internal policies that apply to its operations and data handling.
Key term
General Data Protection Regulation
A European Union law that gives individuals control over their personal data and sets strict rules for how organizations collect, store, and process that data.
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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. Which missing control best improves oversight of the supplier?
medium- ✓ A.Right-to-audit clause.
- B.Allow the supplier to choose any encryption algorithm it wants.
- C.Disable all contract reviews after signature.
- D.Require the vendor to use employee badges for all facilities.
Why A: A right-to-audit clause is the missing control that best improves oversight of the supplier because it grants the organization contractual authority to examine the supplier's security controls, processes, and compliance evidence. Without this clause, the organization has no formal mechanism to verify that the supplier is adhering to agreed-upon security requirements, leaving oversight entirely dependent on trust.
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.