Which of the following practices BEST mitigates the risk associated with outsourcing a business function?

Performing audits to verify compliance with contract requirements is a critical practice for mitigating risks associated with outsourcing a business function. This approach ensures that the third-party vendor is adhering to the established agreements and standards set forth in the contract. Regular audits help identify any deviations from compliance, which could expose the organization to various risks, including security breaches, data leaks, or service disruptions.

Auditing creates a structured and systematic approach to oversee vendor performance, assess the effectiveness of controls, and ensure that the outsourced function aligns with the organization's objectives and regulatory requirements. By actively monitoring compliance, organizations can address potential issues proactively, ensuring that any lapses in service quality or security are promptly identified and rectified before they escalate into more significant concerns.

In contrast, other options, while they may contribute to risk mitigation, do not provide the direct assurance and oversight that audits do. For example, requiring vendor staff to attend awareness training sessions supports security awareness but does not guarantee compliance or performance oversight. Retaining copies of sensitive data on internal systems offers data control but may not address operational or service continuity risks. Reviewing the vendor's financial records is helpful for assessing financial stability but does not ensure adherence to contract terms or operational compliance. Thus, conducting audits is the most effective way to manage