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Adopt A Risk-Based Approach For Audit Success
For organizations of all sizes, internal and external audits are often met with resistance. That’s because audits generally take a lot of time, tie up staff and resources, and are complicated.
Often audits—whether they’re conducted by your internal teams or outside sources—provide few opportunities for proactive planning to protect your organization and instead focus more on evaluating your performance against a set of controls that haven’t changed in years and don’t collectively make your business stronger or more successful.
But audits don’t have to be painful.
With thoughtful insight and careful planning, a risk-based approach for audit processes can glean from the strengths of your business continuity (BC) and disaster recovery (DR) programs to help you better protect your organization.
About 58% of respondents to our 2019 Business Continuity Benchmark Study said that ensuring preparation for external audits was a key objective of their business continuity program.
So how can you get the most out of your audits and ensure the auditing processes is successful and offers real benefits to your company? Here is some insight:
Unlike traditional audit processes, a risk-approach to auditing uses risk assessment as the starting point for audits. Some questions that might be addressed with a risk-based approach for auditing are:
- What are the risks for my organization?
- Which of our systems are critical and what would the impact be if they were negatively affected?
- How do we assess all of our organizational assets to provide value so we know how to mitigate our risks?
How would a risk-based audit approach look in a real-world scenario? Here’s an example:
Begin the audit with a risk assessment as part of the audit kick-off. The auditor or auditing team should meet with your organizational leadership to discuss all known issues and to get a clear picture of the current state of your environment. Conducting a risk assessment at kickoff helps target the audit approach so it focuses on the important areas.
Your risk-based audit should also include critical compliance and regulatory factors like PCI standards, ISO, HIPAA, SOX, and GDPR. Overlay all of the relevant compliance standards with your audit objectives.
During an audit, what will auditors look for?
- Foundational issues
- Vulnerability management
- Is your organization collecting and analyzing data to make good business decisions? Do you know which assets exist in your environment so you can see all of your vulnerabilities? Do you know how to remediate those vulnerabilities? What are your SLA expectations?
- System inventory
- Where and how are you capturing which systems exist in your environments? Who owns those systems?
- Data inventory and classification
- Which data is in your environment and how does your organization classify that data?
- Policies and procedures
- Control matrix
- Has your organization defined your control matrix? Is your organization being proactive? Are you participating in this process or is your team waiting and reacting to what the audit reveals?
- Communication methods
- Is your organization communicating audit findings with your customers and senior leadership? Are your organization’s communication methods consistent across all levels? Are you analyzing the right metrics and KPIs to report on audit success?
- Best practices
- What is the design & operating effectiveness of your controls?
- Vulnerability management
- Are you monitoring the effectiveness of your controls or waiting for an audit? Are you proactively looking for breakdowns in your processes?
- What are your processes for log management? Do you have way to ensure your organization is retaining data for business purposes as well as audits? Are you maintaining the data in a way that’s safe and trackable so you can prove your controls work?
- Are you encrypting everything in and out of your environment, as well as critical data at rest?
- Are your critical systems segmented, for example, your cloud environments and vendors that have access in your environments?
- Do you have effective Identity and Access Management controls to restrict access in your environments? What does that process look like and how effective is it?
Path to Audit Success
Now that you have a better idea of how you can prepare for the audit process, what auditors are looking for, and how you can get the most out of your audit process, you’re poised to be on the path for audit success. Here are a few takeaways:
- Adopt a risk mindset. Be proactive in thinking about your organizational risk and build partnerships with your auditor.
- The goal of your audit goal should be eliminating risk. Audits should not be exclusively about “gotcha” moments for policy gaps. Audits should help your organization be more successful and eliminate organizational risks that haven’t already addressed.
- Be prepared. Have adequate resources to support your entire audit process.
- Ask questions about audit scope.
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