easyMultiple Choice
CRISC Practice Question: Uses a third-party SaaS provider for payroll…
An organization uses a third-party SaaS provider for payroll processing. Which of the following is the BEST technique to identify risks associated with this vendor?
⚠ Common exam trap
The trap here is that candidates often overvalue a penetration test report (Option A) as the definitive risk identification tool, forgetting that for a SaaS payroll provider, operational and compliance risks (e.g., data privacy, availability, change management) are equally or more critical than pure technical vulnerabilities.
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
✓
Review the vendor's SOC 2 Type II report and conduct an on-site assessment
The SOC 2 Type II report provides an independent auditor's assessment of the vendor's controls over security, availability, processing integrity, confidentiality, and privacy over a period of time, which is critical for identifying risks in a payroll SaaS processing sensitive employee data. An on-site assessment allows the organization to verify physical and logical controls, observe operations, and discuss specific risk scenarios directly with vendor personnel, offering a deeper risk identification than any single document or review.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Request a penetration test report from the vendor
Why it's wrong here
A penetration test report addresses exploitable vulnerabilities in the vendor's infrastructure, not the breadth of payroll-processing risks such as data handling, subprocessors or contractual controls. It is tempting because penetration testing genuinely evidences security assurance, and would suit a scenario demanding proof of technical hardening rather than enterprise risk identification.
- ✗
Check online user reviews and ratings
Why it's wrong here
Public reviews reflect subjective user sentiment and cannot evidence the vendor's control environment, so they fail to identify payroll-specific risks like data residency or subprocessor exposure. They are tempting because reputation screening is quick and free, and would be reasonable for shortlisting consumer software, not for formal vendor risk assessment.
- ✗
Read the vendor's marketing materials and case studies
Why it's wrong here
Marketing materials and case studies are vendor-authored promotional content, so they omit control gaps and incident history. They are tempting because they are readily available, but vendor risk identification requires independent evidence such as SOC 2 reports or completed security questionnaires.
- ✓
Review the vendor's SOC 2 Type II report and conduct an on-site assessment
Why this is correct
A SOC 2 Type II report provides independent evidence over time that the vendor's controls operate effectively, while an on-site assessment verifies actual implementation. Together they identify payroll-processing risks the vendor's self-reported claims would miss.
Go deeper
Related to this question
About these practice questions
One of 1,062 original CRISC practice questions on Courseiva, each with a full explanation and wrong-answer analysis — not exam dumps or protected exam content. Learn why practice questions differ from exam dumps →
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. An organization wants to identify risks related to third-party vendors. Which approach best supports continuous risk identification?
medium- A.Contractual clauses requiring self-assessment
- B.On-site audits every two years
- ✓ C.Automated monitoring of vendor security controls via a third-party risk platform
- D.Annual vendor risk assessments
Why C: Automated monitoring via a third-party risk platform enables continuous, real-time visibility into vendor security controls, such as firewall rule changes, vulnerability scan results, and compliance posture. This approach aligns with the CRISC principle of ongoing risk identification, as it detects changes in risk exposure between formal assessment cycles without relying on periodic snapshots.
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.