CISM Information Security Risk Management Practice Question
A large retail chain with hundreds of stores uses point-of-sale (POS) systems that run an outdated operating system. The annual risk assessment identified this as a high-risk issue because the OS is no longer patched and has known vulnerabilities. The business unit manager opposes replacing all POS systems immediately due to cost and potential disruption to operations. As the risk manager, you need to recommend a risk response that balances risk reduction with business continuity. Which strategy is most appropriate?
⚠ Common exam trap
CISM often tests the misconception that risk transfer (cyber insurance) eliminates risk — candidates must recognize that insurance only transfers financial impact, not the likelihood or operational impact of an attack, and is not a substitute for mitigation.
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
✓
Risk mitigation: implement compensating controls and schedule a phased upgrade
Risk mitigation with compensating controls and a phased upgrade balances risk reduction with business continuity. It acknowledges the high risk of outdated POS systems, implements immediate compensating controls (e.g., network segmentation, enhanced monitoring, virtual patching) to reduce exposure, and schedules a phased replacement to avoid operational disruption and spread costs over time.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Risk avoidance: immediately replace all POS systems with modern ones
Why it's wrong here
Immediate replacement of every POS system is risk avoidance, eliminating the exposure outright, but it ignores the stated cost and operational disruption the business unit opposes. It tempts because avoidance is appropriate when a risk is intolerable and no compensating control can reduce it to acceptable levels.
- ✓
Risk mitigation: implement compensating controls and schedule a phased upgrade
Why this is correct
Compensating controls (network segmentation, strict POS hardening, enhanced monitoring) reduce exposure from the unpatched OS while a phased upgrade preserves store operations and spreads cost, directly satisfying the stem's dual constraint of risk reduction and business continuity.
- ✗
Risk acceptance: accept the risk because the business cannot afford replacement
Why it's wrong here
Acceptance leaves known exploitable POS vulnerabilities unaddressed despite the assessment rating them high-risk, exceeding typical tolerance. It tempts because acceptance is valid for low risks within appetite, or where treatment cost demonstrably outweighs the expected loss.
- ✗
Risk transfer: purchase cyber insurance to cover potential losses from POS attacks
Why it's wrong here
Cyber insurance reimburses losses after a POS breach but leaves the unpatched OS exploitable, so incident likelihood is unchanged. It tempts because transfer suits high-severity, low-frequency risks, yet it cannot replace remediation of known critical vulnerabilities affecting cardholder data.
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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.