Isaca Updated CRISC Exam Questions and Answers by julian

Residual risk is the remaining risk after the risk response has been implemented. Residual risk can be expressed as a combination of the probability and impact of the risk scenario, or as a single value such as loss expectancy. Residual risk can be compared with the inherent risk, which is the risk level before considering the existing controls or responses, to evaluate the risk reduction and value creation of the risk response. Senior management has asked the risk practitioner for the overall residual risk level for a process that contains numerous risk scenarios. The best way to provide this information is to calculate the average of anticipated residual risklevels for each risk scenario, and to present it as a single value or a range. This can help to provide a comprehensive and consistent view of the residual risk exposure and performance of the process, as well as to align it with the organization’s risk appetite and tolerance. The sum of residual risk levels for each scenario, the loss expectancy for aggregated risk scenarios, or the highest loss expectancy among the risk scenarios are not the best ways to provide the overall residual risk level, as they may overestimate or underestimate the risk exposure and performance of the process, and may not reflect the actual risk reduction and value creation of the risk response. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.2.2, p. 108-109

The most reliable evidence of a control’s effectiveness is a system-generated testing report. A system-generated testing report is a document that shows the results of automated tests performed by the system to verify that the control is functioning as intended and producing the expected outcomes. A system-generated testing report is reliable, because it is objective, consistent, accurate, and timely, and because it can provide a high level of assurance and confidence in the control’s effectiveness. The other options are not as reliable as a system-generated testing report, although they may provide some evidence of the control’s effectiveness. A risk and control self-assessment, senior management’s attestation, and a detailed process walk-through are all examples of manual or subjective evidence, which may be prone to errors, biases, or inconsistencies, and which may provide a lower level of assurance and confidence in the control’s effectiveness. References = Risk and Information Systems Control Study Manual, Chapter 3, Section 3.4.1, page 3-32.

The most essential factor for an effective change control environment is the separation of development and production environments. This ensures that changes are tested and verified in a controlled environment before being implemented in the live environment, reducing the risk of errors, failures, and unauthorized modifications. Business management approval of change requests, requirement of an implementation rollback plan, and IT management review of implemented changes are important elements of change control, but they are not as essential as the separation of environments. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 3, Section 3.2.1.2, page 123.

 The production environment is the environment where the application is deployed and used by the end users. The production environment should be protected from unauthorized or unintended changes that could compromise the availability, integrity, or confidentiality of the application and its data. Developers have access to the production environment presents the greatest risk to an application, as it could allow them tobypass the change management process, introduce errors or vulnerabilities, or manipulate the application or its data for malicious purposes. The other options are not as risky as developers having access to the production environment, as they involve different aspects of the application lifecycle:

Application controls are manual means that the application relies on human intervention to perform some functions or validations, such as data entry, reconciliation, or authorization. This could increase the risk of human error, fraud, or inefficiency, but it does not directly affect the production environment.

Application development is outsourced means that the application is developed by a third party, such as a vendor or a contractor. This could increase the risk of quality issues, contractual disputes, or intellectual property rights, but it does not directly affect the production environment.

Source code is escrowed means that the source code of the application is deposited with a trusted third party, such as a lawyer or a bank. This could provide assurance and continuity in case the original developer is unable or unwilling to maintain or support the application, but it does not directly affect the production environment. References = Risk and Information Systems Control Study Manual, 7th Edition, Chapter 4, Section 4.1.1.1, pp. 144-145.