- A
Criticality of service provided
Service criticality directly impacts business impact if disrupted.
- B
Number of vendor employees
Why wrong: Number of employees is not a direct risk factor.
- C
Level of data access the vendor has
Data sensitivity is a primary factor for risk tiering.
- D
Annual contract value
Why wrong: Contract value is not a primary risk tiering factor.
- E
Vendor geographic location
Why wrong: Location may be considered but is not a primary tiering criterion.
Question 345 of 1,000
CRISC Risk Response and Reporting Practice Question
This CRISC practice question tests your understanding of risk response and reporting. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
During a third-party risk management review, the organization is tiering its vendors based on risk. Which TWO of the following criteria are most relevant for determining vendor risk tier?
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
✓
Criticality of service provided
The criticality of the service provided (A) directly determines the potential business impact if the vendor fails, making it a primary factor in risk tiering. Similarly, the level of data access (C) dictates the confidentiality and privacy risks, as vendors handling sensitive or regulated data (e.g., PII, PHI) pose higher inherent risk. Both criteria align with the ISACA risk management framework, which prioritizes impact and data sensitivity over financial or operational metrics.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Criticality of service provided
Why this is correct
Service criticality directly impacts business impact if disrupted.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Number of vendor employees
Why it's wrong here
Number of employees is not a direct risk factor.
- ✓
Level of data access the vendor has
Why this is correct
Data sensitivity is a primary factor for risk tiering.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Annual contract value
Why it's wrong here
Contract value is not a primary risk tiering factor.
- ✗
Vendor geographic location
Why it's wrong here
Location may be considered but is not a primary tiering criterion.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Cisco often tests the misconception that financial metrics like contract value or vendor size directly correlate with risk, but the CRISC exam emphasizes that risk is driven by data sensitivity and business impact, not cost or scale.
Detailed technical explanation
How to think about this question
In practice, vendor risk tiering often uses a composite score based on data classification (e.g., public, internal, confidential, restricted) and service criticality (e.g., uptime SLAs, regulatory compliance). For example, a cloud SaaS provider handling customer PII under GDPR would be Tier 1, while a janitorial service with no data access would be Tier 3. The NIST SP 800-53 framework and ISO 27001 both emphasize data access and service impact as primary risk factors, not vendor headcount or contract value.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A practitioner preparing for the CRISC exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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Risk Response and Reporting — study guide chapter
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FAQ
Questions learners often ask
What does this CRISC question test?
Risk Response and Reporting — This question tests Risk Response and Reporting — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Criticality of service provided — The criticality of the service provided (A) directly determines the potential business impact if the vendor fails, making it a primary factor in risk tiering. Similarly, the level of data access (C) dictates the confidentiality and privacy risks, as vendors handling sensitive or regulated data (e.g., PII, PHI) pose higher inherent risk. Both criteria align with the ISACA risk management framework, which prioritizes impact and data sensitivity over financial or operational metrics.
What should I do if I get this CRISC question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Last reviewed: Jul 4, 2026
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.
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