CRISC Practice Questions: Governance Domain

Published: September 1, 2025 | 20 min read

Test your CRISC knowledge with 10 practice questions from the Governance domain. Includes detailed explanations and answers.

CRISC Practice Questions

Master the Governance Domain

Test your knowledge in the Governance domain with these 10 practice questions. Each question is designed to help you prepare for the CRISC certification exam with detailed explanations to reinforce your learning.

Question 1

A technology company is expanding its cloud services and is concerned about compliance with data protection regulations. As part of its governance framework, what should the company prioritize to address these concerns?

A) Implementing a comprehensive data encryption strategy

B) Conducting regular compliance audits and assessments

C) Developing a robust incident response plan

D) Engaging with a third-party compliance consultant

Show Answer & Explanation

Correct Answer: B

Explanation: Conducting regular compliance audits and assessments (B) is crucial for ensuring ongoing adherence to data protection regulations and identifying areas for improvement. While data encryption (A) is important for data protection, it does not address the full scope of compliance. An incident response plan (C) is reactive and does not proactively ensure compliance. Engaging with a consultant (D) can provide expertise but should complement, not replace, internal compliance efforts.

Question 2

A global manufacturing firm is revising its risk governance structure to better support strategic initiatives. The risk committee is tasked with ensuring alignment between risk management and business strategy. Which of the following actions is most critical to achieving this alignment?

A) Regularly update the risk register to reflect new risks.

B) Ensure risk management objectives are linked to strategic goals.

C) Conduct training sessions for employees on risk awareness.

D) Implement advanced risk analytics tools for better insights.

Show Answer & Explanation

Correct Answer: B

Explanation: Ensuring that risk management objectives are linked to strategic goals (Option B) is critical for aligning risk management with business strategy, as it ensures that risk activities support strategic initiatives. Regularly updating the risk register (Option A) and conducting training (Option C) are important but do not directly ensure alignment. Implementing advanced analytics (Option D) enhances insights but is not as fundamental as alignment.

Question 3

A retail company is concerned about aligning its IT risk management with business objectives. Which governance activity should be prioritized to achieve this alignment?

A) Developing a comprehensive IT security training program.

B) Integrating IT risk management into the strategic planning process.

C) Increasing the budget for IT infrastructure.

D) Establishing a dedicated IT risk management team.

Show Answer & Explanation

Correct Answer: B

Explanation: Integrating IT risk management into the strategic planning process ensures that risk considerations are part of business decision-making, aligning IT risk management with business objectives. Option A is about skill development, not strategic alignment. Option C may improve resources but does not ensure alignment. Option D supports risk management but does not ensure it aligns with business objectives.

Question 4

A technology firm is expanding its operations globally and needs to ensure its governance framework accommodates new geopolitical risks. Which strategy should the firm adopt to effectively manage these risks?

A) Developing a global risk management strategy.

B) Centralizing decision-making processes.

C) Increasing investment in local market research.

D) Implementing a standardized global compliance program.

Show Answer & Explanation

Correct Answer: A

Explanation: Developing a global risk management strategy is crucial as it allows the firm to systematically address and manage geopolitical risks across different regions. Option B, centralizing decision-making, may hinder responsiveness to local risks. Option C, local market research, is beneficial but tactical and not part of governance structure. Option D, a standardized compliance program, helps with legal adherence but not broader risk governance.

Question 5

A financial institution is implementing a new risk management software to enhance its risk governance. The board wants to ensure that the software supports strategic objectives and regulatory compliance. What governance strategy should the institution prioritize?

A) Focus on the software's technical capabilities over strategic alignment.

B) Ensure the software is customizable to adapt to changing regulatory requirements.

C) Select a software that minimizes operational costs.

D) Choose a software vendor based solely on industry reputation.

Show Answer & Explanation

Correct Answer: B

Explanation: Ensuring the software is customizable allows the institution to adapt to changing regulatory requirements, supporting strategic objectives and compliance. Option A overlooks strategic alignment. Option C focuses on cost rather than governance. Option D may not ensure the software meets specific governance needs.

Question 6

A financial services firm is evaluating its risk governance framework to better manage third-party risks associated with its IT vendors. What is the most effective way to enhance the governance of these relationships?

A) Increasing the frequency of vendor performance reviews.

B) Developing a comprehensive vendor risk management policy.

C) Requiring vendors to submit quarterly compliance reports.

D) Implementing a vendor scorecard system.

Show Answer & Explanation

Correct Answer: B

Explanation: Developing a comprehensive vendor risk management policy is the most effective way to enhance governance as it establishes clear guidelines and expectations for managing third-party risks. Option A, increasing performance reviews, is tactical and may not address broader governance issues. Option C, requiring compliance reports, is part of monitoring but not governance enhancement. Option D, a scorecard system, helps with assessment but does not provide governance structure.

Question 7

An organization is struggling to balance its risk-taking and risk-avoiding activities. The risk management team proposes setting a clear risk appetite statement. How does a risk appetite statement primarily benefit the organization?

A) It ensures compliance with regulatory requirements.

B) It provides a benchmark for evaluating risk management maturity.

C) It guides decision-making by defining acceptable risk levels.

D) It reduces the likelihood of risk events occurring.

Show Answer & Explanation

Correct Answer: C

Explanation: A risk appetite statement (Option C) benefits the organization by guiding decision-making through defining acceptable levels of risk, aligning with strategic objectives. While it may indirectly support compliance (Option A) and maturity assessment (Option B), these are not its primary purposes. It does not directly reduce risk event likelihood (Option D), but helps manage risk-taking decisions.

Question 8

A pharmaceutical company is implementing a new risk governance framework. The board has emphasized the need for transparency and accountability. Which of the following should be prioritized to meet these governance objectives?

A) Develop a comprehensive risk register accessible to all employees.

B) Establish clear reporting lines and responsibilities for risk management.

C) Implement a whistleblower program to report unethical behavior.

D) Conduct regular risk management training sessions.

Show Answer & Explanation

Correct Answer: B

Explanation: Option B is correct because establishing clear reporting lines and responsibilities enhances transparency and accountability, key governance objectives. Option A provides transparency but not accountability. Option C addresses ethical concerns but not overall governance transparency. Option D is a tactical measure that supports awareness but not governance structure.

Question 9

A pharmaceutical company is integrating new AI/ML technologies into its research and development processes. The board is concerned about potential ethical and compliance risks. What governance action should the company prioritize to address these concerns?

A) Develop an AI ethics policy aligned with industry best practices.

B) Conduct a comprehensive risk assessment of AI/ML applications.

C) Increase the frequency of compliance audits in the R&D department.

D) Limit the use of AI/ML technologies in critical projects.

Show Answer & Explanation

Correct Answer: A

Explanation: Option A is correct because developing an AI ethics policy ensures that the use of AI/ML technologies aligns with ethical standards and industry best practices, addressing both ethical and compliance risks. Option B is important but does not specifically address ethical concerns. Option C focuses on compliance but may not cover ethical issues. Option D is unnecessarily restrictive and may hinder innovation.

Question 10

A logistics company is reviewing its governance framework to improve the alignment of its IT risk management with business objectives. Which action should be prioritized?

A) Updating the IT risk management policy.

B) Conducting a risk appetite workshop.

C) Establishing key risk indicators (KRIs).

D) Implementing a balanced scorecard approach.

Show Answer & Explanation

Correct Answer: B

Explanation: Conducting a risk appetite workshop is prioritized as it helps define the level of risk the organization is willing to accept, ensuring alignment with business objectives. Option A, updating the policy, is important but follows understanding risk appetite. Option C, KRIs, are useful for monitoring but not initial alignment. Option D, a balanced scorecard, supports performance measurement but not specific to risk alignment.

Ready to Accelerate Your CRISC Preparation?

Join thousands of professionals who are advancing their careers through expert certification preparation with FlashGenius.

✅ Unlimited practice questions across all CRISC domains
✅ Full-length exam simulations with real-time scoring
✅ AI-powered performance tracking and weak area identification
✅ Personalized study plans with adaptive learning
✅ Mobile-friendly platform for studying anywhere, anytime
✅ Expert explanations and study resources

Start Free Practice Now

Already have an account? Sign in here

About CRISC Certification

The CRISC certification validates your expertise in governance and other critical domains. Our comprehensive practice questions are carefully crafted to mirror the actual exam experience and help you identify knowledge gaps before test day.