SCENARIO Please Use the Following to Answer the Next Question

question 71

Multiple Choice

SCENARIO Please use the following to answer the next question: Otto is preparing a report to his Board of Directors at Filtration Station, where he is responsible for the privacy program. Filtration Station is a U.S. company that sells filters and tubing products to pharmaceutical companies for research use. The company is based in Seattle, Washington, with offices throughout the U.S. and Asia. It sells to business customers across both the U.S. and the Asia-Pacific region. Filtration Station participates in the Cross-Border Privacy Rules system of the APEC Privacy Framework. Unfortunately, Filtration Station suffered a data breach in the previous quarter. An unknown third party was able to gain access to Filtration Station's network and was able to steal data relating to employees in the company's Human Resources database, which is hosted by a third-party cloud provider based in the U.S. The HR data is encrypted. Filtration Station also uses the third-party cloud provider to host its business marketing contact database. The marketing database was not affected by the data breach. It appears that the data breach was caused when a system administrator at the cloud provider stored the encryption keys with the data itself. The Board has asked Otto to provide information about the data breach and how updates on new developments in privacy laws and regulations apply to Filtration Station. They are particularly concerned about staying up to date on the various U.S. state laws and regulations that have been in the news, especially the California Consumer Privacy Act (CCPA) and breach notification requirements. What can Otto do to most effectively minimize the privacy risks involved in using a cloud provider for the HR data?

• A) Request that the Board sign off in a written document on the choice of cloud provider.
• B) Ensure that the cloud provider abides by the contractual requirements by conducting an on-site audit.
• C) Obtain express consent from employees for storing the HR data in the cloud and keep a record of the employee consents.
• D) Negotiate a Business Associate Agreement with the cloud provider to protect any health-related data employees might share with Filtration Station.

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Definitions:

Economic Activities

Actions that involve the production, distribution, and consumption of goods and services within an economy.

Asset Turnover

A financial ratio that measures the efficiency of a company at using its assets to generate sales or revenue.

Total Assets

The combined value of all assets owned by a company, including both current and non-current assets.

Trend Statements

Financial statements analyzed over several time periods to identify patterns or trends in a company's financial performance.