Which of the following is the BEST approach for an organization looking to share privacy risk?

A third-party audit firm provides independent assessment and assurance of controls but does not assume or share any of the organization's operational privacy risk.

SLAs define service performance expectations and may include penalties for failures, but they are focused on service quality rather than the allocation of privacy risk and data protection responsibility.

Privacy notice and consent mechanisms address the organization's obligations to data subjects and do not constitute a risk-sharing arrangement with other organizations.

Contracts with third parties - such as data processing agreements - formally allocate privacy risk and responsibility between parties, creating shared legal accountability for protecting personal data. These agreements specify security requirements, breach notification obligations, audit rights, and liability provisions, ensuring the third party bears defined responsibility for any privacy failures within their scope. This is the most direct and legally enforceable method of sharing privacy risk with external parties.