Explanation
KPIs are not clearly defined is the most concerning finding for an IS auditor, because it implies that the third-party vendor does not have a clear understanding of what constitutes success or failure in their performance. This can lead to inaccurate or misleading reporting, poor decision making, and lack of accountability. KPIs should be SMART (specific, measurable, achievable, relevant, and time-bound) and aligned with the business objectives and expectations of the stakeholders12. References: 1: CISA Review Manual (Digital Version), Chapter 5, Section 5.3.2 2: CISA Online Review Course, Module 5, Lesson 3

Section: Protection of Information Assets
Explanation:
Establishing regular meetings is the best way to identify and assess risks in a medium- sized organization, to address responsibilities to the respective management and to keep the risk list and mitigation plans up to date. A medium-sized organization would normally not have a separate IT risk management department.
Moreover, the risks are usually manageable enough so that external help would not be needed. While common risks may be covered by common industry standards, they cannot address the specific situation of an organization. Individual risks will not be discovered without a detailed assessment from within the organization. Splitting the one risk position into several is not sufficient.

Explanation/Reference:
Application controls should be considered as early as possible in the system-development process, even in the development of the project's functional specifications.

Explanation
Parallel processing is a system implementation approach that involves running the new system and the old system simultaneously for a period of time until the new system is verified and accepted. The primary advantage of parallel processing is that it provides assurance that the new system meets performance requirements and produces the same or better results as the old system. Parallel processing also minimizes the risk of system failure and data loss, as the old system can be used as a backup or fallback option in case of any problems with the new system.