CRISC Risk Response and Mitigation Practice Question
An organization decides to outsource its data center operations to a third party. This is an example of which risk response?
⚠ Common exam trap
Many candidates confuse risk transfer with risk reduction, mistakenly thinking that outsourcing reduces the risk of hardware failure, when in fact it only shifts the financial liability for that failure, not the operational impact on the business.
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 transfer
Outsourcing data center operations transfers the financial and operational risks associated with managing the infrastructure to a third-party provider. This is a classic risk transfer response because the organization retains ownership of the data and business accountability but shifts the liability for physical security, hardware maintenance, and uptime to the vendor via contractual agreements, such as SLAs with penalty clauses.
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 reduction
Why it's wrong here
Outsourcing transfers the operational risk to the vendor rather than lowering its likelihood or impact, so no mitigation control is applied. Risk reduction tempts because adding controls does lower exposure, and it would be correct where the organisation retains the activity but strengthens safeguards against it.
- ✓
Risk transfer
Why this is correct
Outsourcing shifts the financial impact of data centre failures to the third party, satisfying the stem's need to reallocate risk ownership. Unlike risk avoidance, which eliminates the activity, or mitigation, which reduces likelihood, transfer moves the consequence to another party via contract.
- ✗
Risk acceptance
Why it's wrong here
No formal acknowledgement of residual risk without further action occurs; the outsourced risk is shifted to the provider under contract. Acceptance tempts because it applies where an organisation consciously retains a risk, and it would be correct if the firm kept the data centre risk and funded any losses itself.
- ✗
Risk avoidance
Why it's wrong here
The organisation still depends on data centre operations and retains accountability, so the risk is transferred, not eliminated by ceasing the activity. Avoidance tempts because exiting an activity removes its exposure entirely, and it would be correct if the organisation stopped operating data centres altogether.
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Same concept, more angles
1 more way this is tested on CRISC
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. Refer to the exhibit. Based on the risk register, which risk response is applied to the risk with the highest inherent risk?
medium- ✓ A.Transfer
- B.Avoid
- C.Accept
- D.Mitigate
Why A: The risk with the highest inherent risk (Risk A, with a score of 25) involves a critical database server lacking encryption at rest. The risk response chosen is 'Transfer,' which is implemented by purchasing a cyber insurance policy that specifically covers data breach costs and regulatory fines. This shifts the financial impact of the risk to the insurer without altering the technical vulnerability or likelihood of the event.
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This CRISC 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 CRISC exam.