In the increasingly interconnected digital landscape, third-party vendors play a critical role in providing essential services and capabilities to organizations. However, these external partnerships also introduce significant IT security risks, making it imperative for organizations to implement robust strategies for managing third-party vendor risks. This paper provides a comprehensive audit review of third-party vendor risks in IT security and outlines effective mitigation strategies. The audit review identifies key risk areas associated with third-party vendors, including data breaches, inadequate security controls, and compliance issues. Real-world case studies highlight the severe consequences of insufficient vendor risk management, such as substantial financial losses, reputational damage, and regulatory penalties. Through these examples, the review underscores the critical need for organizations to prioritize vendor risk management in their IT security frameworks. Recommended mitigation strategies are detailed, focusing on enhancing security controls, implementing regular security assessments, and establishing clear contractual agreements. Enhancing security controls involves rigorous vetting of vendors, enforcing strong authentication and encryption protocols, and ensuring vendors adhere to the organization's security policies. Regular security assessments, including audits and penetration testing, are crucial for identifying vulnerabilities and ensuring continuous compliance with security standards. Establishing clear contractual agreements with vendors helps define security expectations, responsibilities, and penalties for non-compliance, thereby creating a legal framework that supports robust risk management. The importance of continuous monitoring and oversight is emphasized, highlighting that effective third-party risk management is not a one-time activity but an ongoing process. Continuous monitoring involves real-time tracking of vendor performance and security posture, supported by automated tools and regular audits to promptly address emerging threats. This paper concludes by stressing the necessity for organizations to adopt a proactive approach to third-party vendor risk management, integrating it as a core component of their overall IT security strategy. By doing so, organizations can mitigate the risks associated with third-party vendors, protect sensitive data, and ensure compliance with regulatory requirements, ultimately safeguarding their operations and reputation in the digital age.