CISM Information Security Risk Management Practice Question
A company engages a third-party vendor to process customer data. Which of the following is the most critical step in managing the associated risk?
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
✓
Conducting a due diligence assessment before contracting
Conducting due diligence before contracting is essential to identify risks and ensure the vendor meets security requirements. Vulnerability scans are part of due diligence but not the most critical step. NDA and liability clauses are important but secondary to initial assessment.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Requiring the vendor to sign a non-disclosure agreement
Why it's wrong here
NDA is important but does not assess the vendor's security posture.
- ✓
Conducting a due diligence assessment before contracting
Why this is correct
Pre-contract due diligence is the most critical to identify and mitigate risks early.
- ✗
Performing a vulnerability scan of the vendor's network
Why it's wrong here
Vulnerability scanning is a part of due diligence but not the most critical standalone step.
- ✗
Including a clause that transfers liability to the vendor
Why it's wrong here
Liability clauses only transfer financial risk, not security risk.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This CISM practice question is part of Courseiva's free ISACA 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 CISM exam.