The correct answer is A. The bank should review all third-party audit reports of the vendor that are publicly available. This is because, according to the guidelines regarding internal controls, financial institutions should assess the adequacy of a service provider's control environment, which includes reviewing available audits or reports such as the American Institute of Certified Public Accountants' Service Organization Control 2 report.

Option B is incorrect because compensating the vendor's sales representatives mainly with commissions from the sale of the bank's products could encourage them to direct customers towards higher margin products without considering the associated risks, which is not advisable.

Option C is also incorrect. Outsourcing critical processes is not ruled out by the guidelines. For instance, a community banking organization may have critical business activities outsourced to highly reputable service providers. Larger financial institutions may also use numerous service providers for various business activities that have material risk.

Option D is incorrect because the bank should monitor the vendor's contingency planning process and assess the adequacy and effectiveness of the service provider's disaster recovery and business continuity plan and its alignment with the bank's own plan, rather than being responsible for developing the vendor's contingency planning process.