Making Risk Treatment Decisions Based on Cost-Benefit Analysis
During a risk assessment, an organization identifies that its legacy payment system has a high likelihood of exploitation due to unpatched vulnerabilities. The system is critical for daily operations. Which risk treatment option should the organization PRIMARILY consider?
⚠ Common exam trap
It's easy for candidates to confuse risk transfer (insurance) with risk mitigation, failing to recognize that insurance does not address the technical vulnerability itself, and that acceptance is only appropriate after a cost-benefit analysis shows residual risk is within tolerance.
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 compensating controls to reduce the risk
Implementing compensating controls, such as network segmentation, application-layer firewalls, or intrusion detection systems (IDS), directly reduces the residual risk of exploiting unpatched vulnerabilities in the legacy payment system without disrupting its critical daily operations. This aligns with the CISM principle that when a risk cannot be remediated (e.g., due to system criticality or vendor end-of-life), compensating controls are the primary treatment to bring risk within the organization's appetite.
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 compensating controls to reduce the risk
Why this is correct
Compensating controls directly address the unpatched vulnerabilities without requiring remediation the legacy system cannot support, reducing likelihood while preserving daily payment operations. Because the system is critical and cannot be patched, mitigation through alternative safeguards satisfies the risk-reduction requirement better than avoidance, transfer, or acceptance.
- ✗
Accept the risk as a cost of doing business
Why it's wrong here
Acceptance leaves unpatched, highly exploitable vulnerabilities in a system whose outage would halt daily operations, so no control reduces the exposure. It is tempting where annualised loss is below treatment cost, which requires low likelihood and non-critical impact — neither present here.
- ✗
Avoid the risk by decommissioning the system
Why it's wrong here
Decommissioning removes the risk but also removes a system the organisation depends on for daily operations, so the business impact is unacceptable. It is tempting because elimination is the cleanest treatment, and it would be correct if the capability could be replaced or retired without disrupting operations.
- ✗
Purchase cyber insurance to transfer the risk
Why it's wrong here
Insurance compensates financial loss after an incident; it does not patch the vulnerabilities or prevent the payment system from being compromised or taken offline. It is tempting as a residual-risk backstop, and would be correct alongside remediation once the primary exposure has been reduced.
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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.