CRISC Risk Response and Reporting Practice Question
A financial services company is implementing a vendor risk management program. Which THREE of the following are key components of an effective vendor risk assessment process? (Select THREE)
⚠ Common exam trap
Candidates often confuse risk transfer mechanisms (like cyber insurance) with risk assessment activities, leading them to select option C, when in fact insurance does not evaluate the vendor's actual security posture or operational 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
✓
Contract compliance reviews
Option A (Contract compliance reviews) is correct because an effective vendor risk assessment process must verify that the vendor continuously meets the security, privacy, and service-level obligations defined in the contract, ensuring accountability and detecting drift from agreed controls. Option B (Ongoing monitoring via annual reassessments) is correct because vendor risk is not static; periodic reassessments (at least annually, or upon significant changes) are needed to re-evaluate the vendor's security posture, financial health, and compliance status over the life of the relationship. Option D (Initial onboarding assessment including security questionnaires) is correct because due diligence before engagement is a foundational step—standardized questionnaires (e.g., SIG, CAIQ) help evaluate the vendor's controls, data handling practices, and risk level before any data or access is granted. Option C is not among the marked correct answers because, while reviewing a vendor's cyber insurance policy can be a useful supplementary check, it is not one of the core components of the risk assessment process itself. Option E is not correct because a vendor self-assessment without independent validation is insufficient—it lacks verification and objectivity, which are essential to a credible risk 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.
- ✓
Contract compliance reviews
Why this is correct
Contract compliance reviews verify that the vendor's actual security and privacy practises match the contractual obligations agreed at onboarding, providing the assurance the financial services company needs that third-party risk remains within its stated tolerance throughout the relationship.
- ✓
Ongoing monitoring via annual reassessments
Why this is correct
Annual reassessments sustain ongoing monitoring after onboarding, ensuring the vendor's risk profile, controls and financial standing are re-evaluated periodically rather than assumed static, which is essential when the relationship and its data access persist over time.
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Review of vendor's cyber insurance policy
Why it's wrong here
Cyber insurance is a financial risk-transfer control, not an assessment component; it does not evaluate the vendor's actual security posture. Reviewing it belongs in contract and risk-treatment discussions. An assessment instead examines controls, data handling and compliance evidence to determine inherent and residual risk.
- ✓
Initial onboarding assessment including security questionnaires
Why this is correct
An initial onboarding assessment with security questionnaires establishes the vendor's baseline control posture before any data or system access is granted, enabling the financial services company to classify risk and impose proportionate requirements from the outset.
- ✗
Vendor self-assessment without validation
Why it's wrong here
Unvalidated self-assessment lets a vendor overstate its controls, producing unreliable risk data. Effective assessment requires independent validation through evidence review, testing or audits. Self-assessment alone is acceptable only for low-risk vendors where verification cost outweighs the exposure.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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