The organization may lose control of intellectual property is the correct choice because the contract clause permitting the vendor to reuse developed code in other projects effectively transfers ownership or licensing rights, stripping the organization of exclusive control over its proprietary logic and algorithms. This loss of intellectual property control is the auditor’s primary concern, as it can enable competitors to access sensitive business logic, undermining long-term strategic advantage. On the CISA exam, this scenario tests your understanding of vendor contract risks within the system development lifecycle, specifically how code reuse clauses create hidden IP exposure. A common trap is focusing on code quality or security vulnerabilities, but the auditor’s core duty is safeguarding organizational assets. Remember the mnemonic “IP Reuse = Loss of Control” to recall that any reuse clause in outsourced development shifts the primary risk from technical defects to intellectual property governance.
CISA Practice Question: Information Systems Acquisition, Development and Implementation
This CISA practice question tests your understanding of information systems acquisition, development and implementation. 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.
An IS auditor is evaluating a system development project that uses an outsourced team. The contract allows the vendor to reuse some of the developed code in other projects. What is the auditor's PRIMARY concern?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue: "primary"
Why it matters: Asks for the main purpose or function, not a secondary benefit. Eliminate answers that describe side-effects or partial functions.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
The organization may lose control of intellectual property.
The contract clause allowing the vendor to reuse developed code in other projects directly transfers ownership or licensing rights of the intellectual property (IP) to the vendor. This means the organization may lose exclusive control over the code, potentially allowing competitors to access proprietary logic or algorithms. The IS auditor's primary concern is safeguarding the organization's IP assets, as this loss can have long-term strategic and competitive implications.
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.
✗
The vendor might not deliver on time.
Why it's wrong here
Schedule risk is not directly tied to code reuse.
✓
The organization may lose control of intellectual property.
Why this is correct
Reuse rights could dilute exclusivity and security control.
Clue confirmation
The clue word "primary" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
✗
The vendor may not maintain the code after the project ends.
Why it's wrong here
Maintenance is important but not directly related to reuse.
✗
The vendor may use substandard development practices.
Why it's wrong here
This is a general risk, not specific to code reuse.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates focus on operational risks (delays, maintenance, quality) rather than the contractual and legal risk of losing intellectual property rights, which is the auditor's primary concern when the vendor is explicitly allowed to reuse code.
Detailed technical explanation
How to think about this question
In software development contracts, 'reusable code' clauses often define whether the developed work is a 'work made for hire' (where the client owns all IP) or a licensed deliverable. If the vendor retains the right to reuse the code, the organization may only receive a non-exclusive license, meaning the vendor can sell or license the same code to other clients, including direct competitors. This is a critical distinction in intellectual property law (e.g., under the US Copyright Act or EU Software Directive) and is a key audit point during contract review to ensure the organization's strategic assets are protected.
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 CISA 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.
Information Systems Acquisition, Development and Implementation — This question tests Information Systems Acquisition, Development and Implementation — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: The organization may lose control of intellectual property. — The contract clause allowing the vendor to reuse developed code in other projects directly transfers ownership or licensing rights of the intellectual property (IP) to the vendor. This means the organization may lose exclusive control over the code, potentially allowing competitors to access proprietary logic or algorithms. The IS auditor's primary concern is safeguarding the organization's IP assets, as this loss can have long-term strategic and competitive implications.
What should I do if I get this CISA 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: "primary". Asks for the main purpose or function, not a secondary benefit. Eliminate answers that describe side-effects or partial functions.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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