Isaca CGEIT Practice Test Questions, Exam Dumps

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CGEIT Isaca Practice Test Questions and Exam Dumps

Question 1 :

What should be the primary factor for an organization when prioritizing IT projects?

A. Results of IT performance benchmarks against industry competitors
B. The potential business impact due to the expected outcomes of the project
C. The technical capability of the organization to execute the projects
D. Expectations of process owners based on anticipated operational benefits

Answer: B. The potential business impact due to the expected outcomes of the project

Explanation:

When prioritizing IT projects, the primary consideration should be the potential business impact of the project outcomes. This ensures that the organization is investing resources into projects that will create the most value for the business, aligning IT initiatives with overall business goals and strategies. Here's a breakdown of each option:

Option A: Results of IT performance benchmarks against competitors — While benchmarking against competitors can provide valuable insights into industry standards and help organizations gauge their performance, it is not the primary driver for prioritizing IT projects. Projects should be selected based on their ability to create business value rather than how they compare to competitors.
Option B: The potential business impact due to the expected outcomes of the project — This is the correct answer because businesses prioritize projects that provide the most value. IT projects should be evaluated based on how they align with strategic business objectives, whether it's improving efficiency, enhancing customer experience, or driving revenue growth. A project with significant business impact can provide a competitive advantage and help achieve key organizational goals.
Option C: The technical capability of the organization to execute the projects — While an organization's technical capability is important for determining if it can realistically execute a project, this should not be the primary factor in prioritization. Business value and alignment with strategic objectives should guide decisions more than technical capabilities.
Option D: Expectations of process owners based on anticipated operational benefits — This is important, but it should be considered alongside the potential business impact. While process owners may have valuable insights into how projects could improve operations, the ultimate goal should be maximizing business outcomes, which may not always align directly with operational improvements.

By focusing on the business impact, organizations ensure that IT projects contribute directly to achieving strategic business goals.

Question 2:

Senior management observes that too many projects are currently underway, leading to significant project overruns due to resource shortages. Many of these projects also appear to have overlapping objectives and expected outcomes.

Which of the following approaches would be MOST effective in streamlining the evaluation and selection of IT projects and managing funding priorities?

A. Portfolio management
B. Value governance
C. Project management
D. Business case development

Answer: A. Portfolio management

Explanation:

The most effective approach to streamline the process of evaluating and selecting IT projects, especially in a situation where there are too many projects with overlapping goals, is portfolio management. This process involves managing a collection of projects to ensure that the right projects are prioritized based on strategic alignment, resource availability, and risk assessment. Here’s a breakdown of the options:

Option A: Portfolio management — This is the correct answer. Portfolio management involves overseeing all the projects within an organization to ensure they align with the company’s strategic objectives. By evaluating projects collectively, an organization can eliminate redundancy, prioritize high-value initiatives, and manage resource allocation efficiently. It helps in assessing project risks and ensuring that the portfolio is optimized for business success.
Option B: Value governance — While value governance helps ensure that the projects deliver expected value, it does not address the broader issues of portfolio alignment, resource management, or project selection. It is an important aspect but may not be the most effective method for managing the current situation of project overlaps and resource issues.
Option C: Project management — While project management focuses on delivering individual projects successfully, it does not focus on the broader strategic management of multiple projects or the selection process. It is more concerned with executing a project within its constraints (time, scope, budget) rather than managing how multiple projects align with overall business objectives.
Option D: Business case development — Creating a business case is an important part of evaluating individual projects, but it is not sufficient on its own for managing a portfolio of projects. Business cases help justify the value of individual projects, but portfolio management integrates the evaluation of multiple projects, prioritizing the best ones to align with organizational goals and resource constraints.

By adopting portfolio management, the organization can evaluate projects in a more strategic way, manage resources effectively, and avoid the issues caused by project overlap and resource shortages.

Question 3:

The CEO of a large enterprise has announced a major business expansion that will double the size of the organization. IT needs to support this expansion and meet the increased demand.

What should the CIO do FIRST?

A. Update the IT strategic plan to align with the expansion decision
B. Recruit additional IT resources based on the expected expansion
C. Review the resource utilization matrix
D. Embed IT personnel in the business units

Answer: A. Update the IT strategic plan to align with the expansion decision

Explanation:

The first step the CIO should take in response to the business expansion is to update the IT strategic plan to ensure it aligns with the new business direction and growth goals. The strategic plan will provide a roadmap for how IT can support the expanded organization. Let’s examine the options:

Option A: Update the IT strategic plan to align with the expansion decision — This is the correct approach. The CIO needs to assess how the expansion will impact IT infrastructure, systems, and operations, and revise the IT strategic plan accordingly. This updated plan will guide decisions regarding technology investments, resource allocation, and the support required for the expanded business.
Option B: Recruit additional IT resources based on the expected expansion — While recruiting additional IT resources will be necessary, it should not be the first action. The CIO needs a clear understanding of the IT needs resulting from the expansion, which can be determined after aligning IT strategy with business objectives. Recruiting IT resources prematurely without a strategic plan could lead to inefficiencies and misalignment.
Option C: Review the resource utilization matrix — This option is important but is more of an operational step after the strategic planning process. The CIO needs to understand current resource utilization to identify gaps, but this is part of the implementation phase once the strategic plan has been updated.
Option D: Embed IT personnel in the business units — While embedding IT personnel in business units can improve collaboration, it should not be the first step. The CIO should first establish a clear strategic direction and identify the IT needs of the business expansion. Embedding personnel is a tactical decision that follows the alignment of IT with business objectives.

By updating the IT strategic plan, the CIO can ensure that the organization’s IT infrastructure, systems, and resources are ready to support the growth and scale required for the business expansion.

Question 4:

What is the primary benefit of portfolio management in a large organization?

A. Managing performance
B. Reducing risks
C. Creating value
D. Optimizing human resources

Answer: C. Creating value

Explanation:

Portfolio management plays a crucial role in managing multiple projects, programs, and initiatives within an organization. Its primary purpose is to create value by ensuring that the right projects are selected and aligned with the organization's strategic objectives. The goal of portfolio management is to maximize the value that the organization gains from its investments and resources, ensuring that projects contribute to the long-term success of the business. Here's a breakdown of the options:

Option A: Managing performance — While performance management is important, it is not the primary goal of portfolio management. Portfolio management focuses on the overall selection, prioritization, and alignment of projects, whereas performance management focuses more on individual project outcomes, key performance indicators (KPIs), and team performance.
Option B: Reducing risks — Risk management is a component of portfolio management, but it is not the core goal. Portfolio managers assess and mitigate risks across all projects within the portfolio, ensuring that the overall risk profile of the organization is balanced. However, the main aim of portfolio management is to select projects that deliver value while managing potential risks.
Option C: Creating value — This is the correct answer. The key purpose of portfolio management is to maximize the return on investment (ROI) for the organization. By carefully selecting, prioritizing, and aligning projects with strategic goals, organizations ensure that each project contributes to their overall business value, whether through revenue growth, cost reduction, or improving efficiency.
Option D: Optimizing human resources — While portfolio management can help in resource optimization by balancing workloads across projects, this is more of a by-product of portfolio management rather than its primary goal. The primary focus is on ensuring that the organization’s portfolio of projects is aligned with its strategic priorities, and resource optimization follows naturally from this alignment.

Ultimately, portfolio management focuses on aligning projects with strategic objectives to create value, ensuring that the resources invested in each project contribute positively to the organization's success. By selecting high-value initiatives and aligning them with business goals, portfolio management helps the enterprise achieve its long-term vision.

Question 5:

Which of the following best describes the activities an organization will undertake to align IT investments with its business objectives?

A. Portfolio management
B. Procurement management
C. Project management
D. Risk management

Answer: A. Portfolio management

Explanation:

Aligning IT investments with business goals is a strategic activity that ensures IT initiatives support the broader objectives of the organization. Portfolio management is the best practice for this alignment because it focuses on managing the organization’s collection of projects and programs in a way that ensures they contribute to achieving business goals. Here’s a breakdown of the options:

Option A: Portfolio management — This is the correct answer. Portfolio management helps an organization select and prioritize the right IT projects that align with its business strategy. By managing the IT portfolio, organizations can ensure that their IT investments are aligned with their overall business objectives, thus optimizing resource allocation, reducing redundancy, and ensuring the right projects are executed. Portfolio management allows for an ongoing assessment of how IT initiatives are contributing to business goals, making it the ideal approach for aligning IT investments with organizational objectives.
Option B: Procurement management — Procurement management focuses on the process of acquiring goods and services from external sources, including contracts, supplier relationships, and purchasing processes. While procurement is crucial for acquiring the resources needed for IT projects, it is not the primary process for aligning IT investments with business goals. Procurement is more focused on the acquisition side rather than strategic alignment.
Option C: Project management — While project management ensures that individual IT projects are executed efficiently and within scope, it does not address the broader strategic alignment of the entire IT portfolio. Project management is focused on delivering specific projects, but portfolio management takes a holistic view of how all IT projects contribute to business goals.
Option D: Risk management — Risk management involves identifying, assessing, and mitigating risks associated with IT projects, but it is not specifically focused on aligning IT investments with business goals. While it is essential to assess and manage risks within IT projects, risk management is more about minimizing uncertainties and protecting the organization’s interests rather than ensuring that IT investments are strategically aligned with the overall business strategy.

By using portfolio management, organizations ensure that their IT investments are carefully evaluated, selected, and prioritized based on how well they support business objectives. This process enables organizations to maximize the impact of their IT initiatives, delivering value in alignment with the company's strategic goals.

Question 6:

What should be the primary focus when implementing IT governance in a small, newly established organization?

A. Approving enterprise architecture and standards
B. Defining IT project management methodology
C. Allocating a budget for IT governance applications
D. Defining IT roles and responsibilities

Answer: D. Defining IT roles and responsibilities

Explanation:

In a small, newly established organization, the primary consideration when implementing IT governance should be to establish clear roles and responsibilities within the IT department. This is because defining roles and responsibilities is fundamental to setting up a structured IT governance framework. With a clear understanding of who is accountable for what, the organization can ensure that IT processes and activities are properly managed, efficient, and aligned with business objectives. Here's why the other options are less critical at this stage:

Option A: Approving enterprise architecture and standards — While important, defining enterprise architecture and standards is a more advanced step that typically comes after roles and responsibilities are clearly defined. It requires a structured approach, and it’s something that can be developed once the team is in place and the organization’s governance framework is already established.
Option B: Defining IT project management methodology — Although having a methodology in place for managing IT projects is essential, it is not the first thing to consider. Defining project management methodology is a tactical decision that will come after establishing roles and responsibilities. In a newly established organization, having people assigned to the right roles and knowing their responsibilities is the first step before diving into specific methodologies.
Option C: Allocating a budget for IT governance applications — Budgeting is a critical activity, but it is not the starting point. A small organization should focus first on having clear accountability structures, which will then enable better resource allocation and budgeting in future stages.

In essence, defining IT roles and responsibilities is the cornerstone of any IT governance framework. It allows the organization to establish accountability, streamline communication, and ensure that IT processes are handled correctly. This foundational step sets the stage for implementing other aspects of IT governance like architecture, methodologies, and budgeting.

Question 7:

What is the best method for evaluating the effectiveness of IT governance?

A. Service level management
B. Balanced scorecard
C. Risk control self-assessment
D. Strengths, weaknesses, opportunities, and threats (SWOT) analysis

Answer: B. Balanced scorecard

Explanation:

The balanced scorecard is one of the most effective tools for evaluating IT governance effectiveness. It provides a comprehensive framework for assessing performance from multiple perspectives, including financial, customer, internal processes, and learning and growth. By using a balanced scorecard, an organization can monitor how well its IT governance framework is supporting business strategy and objectives, and whether the IT processes are contributing to organizational success. Here's an explanation of each option:

Option A: Service level management — Service level management focuses on ensuring that IT services meet agreed-upon service levels with users. While it is important for managing day-to-day IT services, it does not provide a comprehensive view of the effectiveness of IT governance as a whole. IT governance evaluation needs to go beyond just service levels and focus on strategic alignment, risk management, and value creation.
Option B: Balanced scorecard — The balanced scorecard is the best method for evaluating IT governance effectiveness because it enables organizations to assess their IT governance from various angles. It measures the impact of governance practices on business outcomes, customer satisfaction, internal process efficiency, and continuous learning. This holistic approach makes the balanced scorecard a powerful tool for monitoring IT governance effectiveness.
Option C: Risk control self-assessment — While risk control self-assessments are valuable for identifying risks and evaluating controls, they are a narrower method compared to the balanced scorecard. They typically focus more on specific risks and control environments rather than assessing the overall effectiveness of IT governance.
Option D: Strengths, weaknesses, opportunities, and threats (SWOT) analysis — A SWOT analysis is useful for identifying strategic challenges and opportunities, but it is not as structured or comprehensive as the balanced scorecard when it comes to evaluating the ongoing effectiveness of IT governance. It focuses more on high-level strategic factors rather than providing a performance evaluation framework.

By using the balanced scorecard, an organization can assess the holistic impact of its IT governance framework on business success, ensuring that IT initiatives are delivering value and supporting the organization’s long-term goals.

Question 8:

An internal auditor is evaluating a two-year-old IT risk management program. Which of the following findings would be the biggest concern for the Chief Information Officer (CIO)?

A. The roles and responsibilities for IT risk management are not clearly defined.
B. IT risk training records are not being retained according to the established schedule.
C. None of the members of the IT risk management team possess risk management certifications.
D. Only a few key risk indicators are being monitored by the IT risk management team, with others on a phased schedule.

Answer: A. The roles and responsibilities for IT risk management are not clearly defined.

Explanation:

The most critical issue that should concern the CIO is lack of clear roles and responsibilities within the IT risk management program. Without clearly defined roles, there will be confusion about accountability and ownership of risk management activities. This can lead to poor execution of the program, delayed responses to risks, and an overall lack of effectiveness in managing IT risks. Here's a breakdown of each option:

Option A: The roles and responsibilities for IT risk management are not clearly defined — This is the most concerning finding. A well-functioning IT risk management program requires clear accountability and ownership of risk management processes. If roles and responsibilities are not clearly defined, it can result in confusion, lack of action, and missed risks. This would undermine the effectiveness of the entire program.
Option B: IT risk training records are not being retained according to the established schedule — While this is a compliance issue and should be addressed, it is less critical than undefined roles and responsibilities. Training records are important for tracking employee readiness and compliance, but they do not pose an immediate threat to the overall effectiveness of the risk management program.
Option C: None of the members of the IT risk management team possess risk management certifications — While certifications can add value to the team, they are not the primary concern. What matters most is the practical ability to manage risks effectively. While certifications are helpful, the lack of certification does not immediately undermine the program's effectiveness if team members have the necessary skills and experience.
Option D: Only a few key risk indicators are being monitored by the IT risk management team, with others on a phased schedule — While it’s important to monitor a comprehensive set of risk indicators, this can be addressed over time. The phased approach to monitoring risk indicators does not pose an immediate risk to the program’s overall effectiveness, whereas unclear roles and responsibilities could significantly disrupt operations.

Clearly defining roles and responsibilities is fundamental to any successful risk management program. Without this structure, it becomes difficult to ensure accountability, effectiveness, and a coordinated approach to addressing and mitigating IT risks.

Question 9 :

An enterprise has identified substantial duplication in its IT investments. Which of the following actions would be most effective in addressing this issue?

A. Creating an IT steering committee
B. Assigning IT investment decisions to a centralized IT department
C. Keeping a detailed inventory of IT investments
D. Increasing the frequency of IT investment audits

Answer: C. Keeping a detailed inventory of IT investments

Explanation:

The most effective way to address the issue of duplicated IT investments is to maintain an inventory of IT investments. By keeping track of all IT investments, an organization can gain a clear understanding of its existing IT assets, technologies, and services. This transparency allows the organization to identify where redundancies exist, whether certain investments overlap in functionality, and where resources can be consolidated to improve efficiency.

Here’s a deeper look at why maintaining an inventory is the most effective solution and why the other options fall short:

Option A: Creating an IT steering committee — While an IT steering committee can provide oversight and decision-making regarding IT investments, it is not the most direct solution for identifying duplication. A steering committee’s role is to guide strategic direction, not to provide the detailed inventory required to spot redundancies. Therefore, while a committee can help in the decision-making process, it doesn’t tackle the root cause of duplication directly.
Option B: Assigning IT investment decisions to a centralized IT department — Centralizing IT investment decisions can streamline processes and prevent duplication, but without a clear inventory, it is still possible to overlook existing duplications. A centralized department might be in charge, but the lack of a comprehensive inventory makes it harder to ensure the elimination of redundancies.
Option D: Increasing the frequency of IT investment audits — Auditing can help identify issues after they occur, but maintaining an inventory is a proactive measure that can prevent duplication in the first place. Regular audits are reactive, whereas having a current inventory allows the organization to spot duplication in real-time and take corrective actions before issues escalate.

In conclusion, the best way to avoid the redundancy of IT investments is to maintain a detailed inventory of existing investments. This proactive strategy ensures better decision-making, better resource allocation, and a streamlined IT environment, ultimately reducing unnecessary expenses.

Question 10:

Following a regulatory audit, an enterprise’s primary transactional application was found to be noncompliant. In addition to fines and required corrections, an agreement was made to implement a set of governance controls over IT.

Who should be primarily accountable for these controls?

A. Internal audit director
B. CIO
C. The board of directors
D. Application users

Answer: B. CIO

Explanation:

The CIO (Chief Information Officer) should be primarily accountable for implementing governance controls over IT systems, including the transactional application found to be noncompliant. As the executive responsible for overseeing the organization’s IT strategy and operations, the CIO has the authority and responsibility to ensure that IT systems meet compliance standards and are governed effectively. This includes enforcing the necessary controls to meet regulatory requirements.

Here’s why the CIO is the most appropriate person for accountability and why the other options are less suited:

Option A: Internal audit director — While the internal audit director plays a key role in assessing compliance and identifying issues, they are not responsible for implementing controls. The internal audit function’s role is more about reviewing and ensuring that controls are working effectively, rather than directly managing or enforcing the implementation of governance controls.
Option C: The board of directors — The board of directors holds oversight responsibility for the organization’s governance as a whole, but it is not involved in the day-to-day implementation of IT governance controls. The board provides high-level direction and oversight, but the CIO, as the head of IT, is better suited for directly implementing IT governance frameworks to comply with regulatory requirements.
Option D: Application users — Application users are responsible for following the controls that are put in place, but they are not accountable for implementing or enforcing them. Users typically do not have the authority or the broader strategic view needed to ensure compliance across the organization.

In summary, the CIO is responsible for ensuring that IT systems are compliant with regulations and that the appropriate governance controls are implemented. This accountability aligns with their role as the senior executive overseeing IT operations and strategy, which includes addressing compliance issues and implementing corrective measures.