CISM Information Security Programme Practice Question
A company is assessing nth-party risk from a critical cloud provider. Which approach should be taken to manage this risk effectively?
⚠ Common exam trap
CISM often tests the misconception that direct auditing of nth parties is feasible or that ignoring them is acceptable, when the correct governance answer is always to push responsibility down through contracts and reporting.
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
✓
Require the cloud provider to contractually manage and report on their subcontractors
The correct approach is to require the cloud provider to contractually manage and report on their subcontractors. Under CISM's governance principles, an organization cannot feasibly audit every nth-party (subcontractor) directly, so it must extend its risk management through contractual flow-down clauses. This ensures the provider assumes responsibility for vetting, monitoring, and reporting on its own supply chain, giving the customer visibility and accountability without overstepping operational boundaries.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Replace the cloud provider with an in-house solution
Why it's wrong here
Replacing the provider with an in-house solution removes the cloud dependency but not the underlying nth-party exposure, since internal platforms also rely on subprocessors. It is tempting as total control, yet the question asks how to manage the risk, which is achieved through provider attestations and contractual flow-down.
- ✗
Conduct a direct audit of the provider's subcontractors
Why it's wrong here
Directly auditing a provider's subcontractors is rarely contractually permitted and does not scale across a cloud supply chain. It is tempting because direct assurance feels strongest, yet the practical route is obtaining the provider's own third-party attestations and flow-down requirements covering its subprocessors.
- ✗
Ignore nth-party risk as it is out of scope
Why it's wrong here
Nth-party risk sits within the provider's subprocessor chain, which still affects the company's data and service continuity, so it cannot be excluded from scope. Ignoring it is tempting when the subcontractor is unknown, but due diligence via the provider's attestations and contractual flow-down is required.
- ✓
Require the cloud provider to contractually manage and report on their subcontractors
Why this is correct
Contractual flow-down obligations make the cloud provider accountable for vetting, monitoring and reporting on its own subcontractors, satisfying the stem's nth-party risk requirement. Direct assessment of every downstream supplier is impractical, so the provider becomes the control point.
Go deeper
Related to this question
About these practice questions
This CISM question is part of Courseiva's 924-question bank — original exam-style content with full explanations and wrong-answer analysis, never real exam questions or exam dumps. Learn why practice questions differ from exam dumps →
JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official ISACA exam blueprint
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.