CISM Information Security Risk Management Practice Question
A multinational organization is evaluating its risk appetite for a new cloud-based customer relationship management (CRM) system. The system will store personal data across multiple jurisdictions with varying data protection laws. The risk committee has set a risk appetite statement that allows only low residual risk. Which of the following controls is MOST critical to ensure compliance with the risk appetite?
⚠ Common exam trap
The trap here is that candidates often select encryption (Option C) as the most critical control because it is a strong technical safeguard, but they overlook that encryption does not address the risk of authorized users misusing data, which is the primary driver of residual risk in a multi-jurisdictional environment with strict compliance requirements.
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
✓
Implement data classification and strict role-based access controls
The risk appetite allows only low residual risk, meaning controls must directly reduce the likelihood or impact of a data breach to an acceptable level. Data classification and strict role-based access controls (RBAC) are the most critical because they enforce least-privilege access to personal data, directly mitigating the primary risk of unauthorized exposure across jurisdictions with varying data protection laws. Without proper classification and RBAC, even encryption or monitoring cannot prevent an authorized user from improperly accessing or exfiltrating data, leaving residual risk above the low threshold.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Implement data classification and strict role-based access controls
Why this is correct
Data classification identifies which records fall under each jurisdiction's data protection laws, and role-based access controls enforce least privilege across those categories. This satisfies the low-residual-risk appetite by limiting exposure of regulated personal data held in the multinational CRM.
- ✗
Conduct continuous monitoring and logging of all system activities
Why it's wrong here
Continuous monitoring and logging provide detection and audit evidence but do not themselves reduce the likelihood or impact of a cross-jurisdictional data protection breach. Logging is the correct control for accountability and forensic readiness. Achieving low residual risk across varying laws demands a control that directly constrains where and how personal data is processed.
- ✗
Encrypt all data at rest and in transit using strong algorithms
Why it's wrong here
Encryption protects confidentiality of stored and transmitted records, yet it does not address lawful transfer, retention limits, or subject rights that differ between jurisdictions. It is the right control for protecting data against interception or media theft. Compliance with divergent data protection laws instead hinges on contractual and transfer-mechanism controls.
- ✗
Negotiate service-level agreements (SLAs) with cloud provider for uptime
Why it's wrong here
Uptime SLAs address availability, which is unrelated to the legal exposure created by storing personal data under conflicting data protection regimes. Such agreements are correct when service continuity is the dominant risk. Low residual risk here depends on controlling cross-border data flows and processing terms, not on availability guarantees.
Quick reference
Access Control Model Comparison
| Model | Acronym | Who Controls Access? | Best For |
|---|---|---|---|
| Discretionary Access Control | DAC | Resource owner | Small teams, file shares |
| Mandatory Access Control | MAC | System / security labels | Classified govt / military |
| Role-Based Access Control | RBAC | Administrator (via roles) | Enterprise environments |
| Attribute-Based Access Control | ABAC | Policy engine (user + resource attributes) | Fine-grained, dynamic policies |
| Rule-Based Access Control | RuBAC | System rules / ACLs | Firewall rules, network ACLs |
Go deeper
Related to this question
About these practice questions
Courseiva writes every CISM question from scratch — 924 in total, each with an explanation and a wrong-answer breakdown. None are copied from real exams or dumps. Learn why practice questions differ from exam dumps →
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.