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Auditing Your Company’s Governance

As cybersecurity continues to become a key focus in many different organizations, the role of governance within this field is also expanding. Governance ensures that the entire company remains compliant with relevant government and industry standards. Proper governance is also fundamental to creating and monitoring risk management plans.

By combining the need for cybersecurity with appropriate rules, processes, and practices, your company will be able to develop and maintain a secure data environment. Indeed, data security requires the involvement of all stakeholders. When senior executives, employees, investors, and vendors are all on board, you’ll be able to establish internal controls that reduce the risk of data breaches.

How corporate governance applies to cybersecurity

In most governance models, senior management is responsible for setting policies, reviewing risks, and establishing goals that the entire organization should aim towards. Governance also applies to monitor how effective your internal controls are during any given moment.

Governance intersects with cybersecurity when it comes to the involvement of senior management. In the past, cybersecurity was mostly a departmental function. However, as cybersecurity continues to become a top concern that spans across the entire business, there has been a shift in corporate governance models within this field. Senior-level executives now need to understand the fundamental principles that apply to data security.

For example, they need to be aware of the risks that are associated with daily business operations. Also, they should understand how internal controls apply to various data security risks with the goal of improving the risk environment of their company.

Cybersecurity and auditing: where they intersect

The government and industry regulators are introducing new cybersecurity policies regularly. To remain compliant, your company’s audit committee needs to have a basic knowledge of data security requirements. This information will help them communicate appropriately with the Board of Directors.

Developing fundamental cybersecurity knowledge takes time and expertise, which is why the audit team should include personnel from the IT department when preparing relevant audit tasks.

How to incorporate cybersecurity into the audit process

For your business to remain compliant with relevant cybersecurity requirements, it needs to establish an audit plan that specifically handles data security. This audit plan will serve as the guiding principle for ensuring that your company meets and maintains all established regulations.

Your company’s audit plan should also consider modern tools and processes such as Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS), and Platform-as-a-Service (PaaS). In this way, auditors can address any appropriate internal controls that help mitigate the risk of data breaches.

You may be wondering which specific steps will help you prepare an effective audit plan for cybersecurity. Here are 4 fundamental steps that you shouldn’t forget to include in the overall process.

1. Practice proper timing

Auditing is all about proper timing. This is because an audit is typically carried out during a specific period, and it assesses the current state of your cybersecurity framework. Your internal audits should be a continuous process that begins with analyzing any previous ones that were carried out.

Indeed, your previous audits will set the scope and action plan for any future activities that should be carried out. Correctly timing your audits will also enable you to begin on the right foot when planning for cybersecurity oversight.

2. Proper risk assessment

Risk assessment is a fundamental component of your cyber security audit plan. This is because the audit should provide an accurate overview of your risk environment, along with a risk tolerance overview.

Your risk tolerance should incorporate the following elements:

  • Data
  • Location
  • The potential of a data breach
  • The cost to sustain if a breach were to occur

The purpose of a risk assessment is to prioritize the highest risk in order to determine an appropriate scope for your audit plan.

3. Establishing a compliance committee

You should also set up a compliance committee that will work closely with relevant internal stakeholders to implement various controls. In essence, your compliance committee should be responsible for keeping the company aligned with all associated standards and regulations. The committee will provide oversight and updates with regards to all controls that your company has established.

4. The role of internal auditors in cybersecurity governance

Internal auditors work to support your entire audit plan. They independently verify whether your cybersecurity program meets industry and regulatory standards. First, your internal auditors will review documentation that impacts your compliance program, after which they will test your internal controls. Finally, they will check how your compliance and audit committees communicate as part of your governance framework.

The purpose of this final step is to ensure that the audit committee is communicating all relevant information to the Board and other associated stakeholders.

Auditing cybersecurity governance is critical to your overall data security environment. This is why maintaining a proper trail of communication, documents, and activities will help your auditors in overseeing how governance is being applied to cybersecurity practices.

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