Cost-benefit analysis (CBA) is a method of comparing the costs and benefits of different alternatives for achieving a desired outcome. CBA can help information security managers to choose the best controls to mitigate risk to acceptable levels by providing a rational and objective basis for decision making. CBA can also help information security managers to justify their choices to senior management, stakeholders, and auditors by demonstrating the value and return on investment of the selected controls. CBA can also help information security managers to prioritize and allocate resources for implementing and maintaining the controls12.
CBA involves the following steps12:
* Identify the objectives and scope of the analysis
* Identify the alternatives and options for achieving the objectives
* Identify and quantify the costs and benefits of each alternative
* Compare the costs and benefits of each alternative using a common metric or criteria
* Select the alternative that maximizes the net benefit or minimizes the net cost
* Perform a sensitivity analysis to test the robustness and validity of the results
* Document and communicate the results and recommendations
CBA is mainly driven by the information security manager's decision, but it can also take into account other factors such as best practices, control frameworks, and regulatory requirements. However, these factors are not the primary drivers of CBA, as they may not always reflect the specific needs and context of the organization. Best practices are general guidelines or recommendations that may not suit every situation or environment. Control frameworks are standardized models or methodologies that may not cover all aspects or dimensions of information security. Regulatory requirements are mandatory rules or obligations that may not address all risks or threats faced by the organization. Therefore, CBA is the best method to choose the most appropriate and effective controls to mitigate risk to acceptable levels, as it considers the costs and benefits of each control in relation to the organization's objectives, resources, and environment12. References = CISM Domain 2: Information Risk Management (IRM) [2022 update], Five Key Considerations When Developing Information Security Risk Treatment Plans

The third party's lack of compliance with local regulations poses the greatest risk to the organization, as it may expose the organization to legal, regulatory, or reputational consequences, such as fines, sanctions, lawsuits, or loss of customer trust. Payroll information is considered sensitive personal data that may be subject to different privacy and security laws depending on the jurisdiction where it is generated, processed, or stored. Therefore, the organization should ensure that the third party adheres to the applicable regulations and standards, and obtains the necessary certifications or attestations to demonstrate compliance.
References = CISM Review Manual 2022, page 361; CISM Exam Content Outline, Domain 1, Task
1.22; Ensuring Vendor Compliance and Third-Party Risk Mitigation; How to Manage Access Risk Regarding Third-Party Service Providers

Decreasing false positives is the best indicator that the information security manager has tuned the system to address senior management's concern that the organization's intrusion prevention system (IPS) may repeatedly disrupt business operations. False positives are alerts generated by the IPS when it mistakenly blocks legitimate traffic or activity, causing disruption or downtime. Decreasing false positives means that the IPS has been configured to reduce such errors and minimize unnecessary interruptions. Increasing false negatives is not a good indicator because it means that the IPS has failed to detect or block malicious traffic or activity, increasing the risk of compromise or damage. Decreasing false negatives is not a good indicator because it does not affect business operations, but rather improves security detection or prevention. Increasing false positives is not a good indicator because it means that the IPS has increased its errors and interruptions, worsening senior management's concern. References: https://www.isaca.org/resources/isaca-journal/issues
/2017/volume-6/the-value-of-penetration-testing https://www.isaca.org/resources/isaca-journal/issues/2016
/volume-5/security-scanning-versus-penetration-testing

A Service Level Agreement (SLA) is the contractual document that specifies and guarantees the availability levels the third-party hosting provider must meet. It provides the clearest and most enforceable commitment to availability.
"SLAs establish measurable commitments that can be monitored and enforced, providing a high level of assurance that service availability will meet business requirements."
- CISM Review Manual 15th Edition, Chapter 3: Information Security Program Development and Management, Section: Outsourcing and Third-Party Management* ISACA's practice questions highlight SLAs as the most direct and reliable assurance for third-party service availability.

According to the CISM Review Manual, an organization's security posture is the overall condition of its information security, which is determined by the effectiveness of its security program and the alignment of its security objectives with its business goals. To understand the security posture, the senior leadership needs to have a holistic view of the security risks and the actions taken to address them. Therefore, assessing the progress of risk mitigation efforts is the most important activity for the senior leadership, as it provides them with the information on how well the security program is performing and whether it is meeting the expected outcomes. Evaluating the results of the most recent incident response test, reviewing the number of reported security incidents, and ensuring established security metrics are reported are all useful activities for the senior leadership, but they are not sufficient to understand the security posture. They only provide partial or isolated information on the security performance, which may not reflect the overall security condition or the alignment with the business objectives. References = CISM Review Manual, 16th Edition, Chapter 1, Information Security Governance, pages 28-29.