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NEW QUESTION: 1
The Chief Executive Officer (CEO) of a large prestigious enterprise has decided to reduce business costs by outsourcing to a third party company in another country. Functions to be outsourced include: business analysts, testing, software development and back office functions that deal with the processing of customer data. The Chief Risk Officer (CRO) is concerned about the outsourcing plans. Which of the following risks are MOST likely to occur if adequate controls are not implemented?
A. Cultural differences, increased cost of doing business and divestiture issues
B. Geographical regulation issues, loss of intellectual property and interoperability agreement issues
C. Improper handling of client data, interoperability agreement issues and regulatory issues
D. Improper handling of customer data, loss of intellectual property and reputation damage
Answer: D
Explanation:
The risk of security violations or compromised intellectual property (IP) rights is inherently elevated when working internationally. A key concern with outsourcing arrangements is making sure that there is sufficient protection and security in place for personal information being transferred and/or accessed under an outsourcing agreement.
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