Certainly! Let's create a case study on auditor's responsibility for cybersecurity risks.

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$**$Case Study: Auditor's Responsibility for Cybersecurity Risks$**$

$**$Background:$**$

XYZ Corporation, a multinational company, is undergoing its annual financial audit. Given the increasing prevalence of cybersecurity threats, the external auditor is tasked with assessing the company's controls and procedures related to cybersecurity risks.

$**$Audit Procedures:$**$

$1.**$Understanding the Business Environment:$**$

$-$ The auditor starts by gaining a comprehensive understanding of XYZ Corporation's business operations, industry, and the sensitivity of the data they handle.

$2.**$Risk Assessment:$**$

$-$ Conducts a thorough risk assessment to identify potential cybersecurity threats and vulnerabilities that could impact the integrity and confidentiality of financial information.

$3.**$Review of IT Controls:$**$

$-$ Examines the effectiveness of the company's IT controls, including access controls, encryption methods, and firewall configurations.

$4.**$Incident Response Plan:$**$

$-$ Evaluates the existence and adequacy of XYZ Corporation's incident response plan, ensuring they have a robust strategy in place to address and recover from cybersecurity incidents.

$5.**$Employee Training and Awareness:$**$

$-$ Assesses the level of training and awareness among employees regarding cybersecurity risks, emphasizing the role of staff in preventing security breaches.

$6.**$Vendor Management:$**$

$-$ Reviews the company's relationships with third$-$party vendors, assessing their cybersecurity measures and ensuring that they do not pose a threat to XYZ Corporation's information security.

$7.**$Data Privacy Compliance:$**$

$-$ Verifies compliance with data protection regulations, ensuring that the company's handling of sensitive information aligns with legal requirements.

$8.**$Penetration Testing:$**$

$-$ Conducts penetration testing to identify and address potential weaknesses in the company's network and systems.

$**$Objective Type Question:$**$

Based on the case study, what is the primary purpose of conducting penetration testing in the audit procedures for cybersecurity risks?

A$)$ To assess the effectiveness of employee training

B$)$ To identify potential weaknesses in the company's network and systems

C$)$ To evaluate the incident response plan

D$)$ To review the company's relationships with third$-$party vendors

Please choose the correct option and provide a brief explanation of your choice.