The notion of being audited is often associated with negative connotations. It can even be a little scary. Let’s face it, no one wants to get a letter from their country’s tax enforcement division that they are being audited. Whenever there is some type of governmental scandal, the first course of action is to conduct an audit and find evidence of wrongdoing or misconduct. Such is the reputation of audits.
The Benefits of General Auditing
Auditing in general, however, should not be viewed as a means of proving one’s innocence. In fact, businesses regularly perform voluntary audits because it can be an effective tool when used correctly. Some of the general benefits of auditing include:
- The detection of errors in financial and purchasing transactions
- Ensuring compliance with required laws and regulations
- Providing a level of assurance to stakeholders that financial states are accurate and reliable
- Enhancing the credibility of a business’s reputation to both customers and investors
- Improved financial performance
According to Gartner, 88% of Boards of Directors view cybersecurity as a risk. It is an even greater risk for SMBs that cannot as easily recover from the devastation of an attack. As a result, cybersecurity auditing has now become a regular voluntary means to provide insights into an organization’s security responsibilities and efforts. Auditing is being used to reduce risk because security risks are bad for business.
The Big Spend in IT and Cybersecurity
According to Gartner, worldwide IT spending is projected to reach $4.5 trillion in 2023. That is a lot of money. Does the world need to spend that much? Maybe it isn’t enough. We don’t know without some means of discovery and analysis. When it comes to cybersecurity, we often hear companies striving to achieve zero-trust security across their organizations. A McKinney survey showed that the world spent $150 billion on cybersecurity in 2021. Obviously, it wasn’t enough when we consider the proliferation of cyberattacks that year. And while global corporations can throw large amounts of money at recruiting top cybersecurity talent and obtaining the latest best-of-breed security controls, there is a point of diminishing returns at some point. And then there is the challenge for SMBs that don’t have the resources to match corporate security efforts yet must still comply with government and industry regulations to meet their due of care responsibility when it comes to securing the sensitive information of third parties. All of this is why voluntary cybersecurity auditing can pay big dividends.
All Businesses Have Security Weaknesses
The basic aim of a cybersecurity strategy is to protect potential attack avenues and eliminate exploitable vulnerabilities and security gaps. Unfortunately, the complexity of multisite locations makes this even more challenging today. The problem is that you must know what those exact gaps and vulnerabilities are to address them. That is one of the primaries aims of a cybersecurity audit. A cybersecurity risk assessment can be a great first step to identify, analyze and evaluate potential risks and vulnerabilities in your business.
Prioritization is Important
Throwing money at a problem is easy, but you probably won’t stay in business very long with that approach. That is why you must prioritize your security directives. Just as community law enforcement can’t be everywhere, you cannot have a tool to combat every type of threat. Some threats are a greater risk than others. A risk assessment can help you prioritize your risk mitigation efforts on the likelihood and potential impact of a designated threat occurring. This will prove especially important should your business ever find itself in litigation concerning a data breach or cybersecurity incident. At that time the court will decide what security efforts would have been deemed reasonable. Reasonable security is the litmus test and ensuring that you allocate your resources to the correct mitigation strategies will yield significant benefits in this type of situation.
Satisfying Compliance Regulations
In addition to the exponential growth of cyber threats in recent years, there has been a growth in regulatory measures to counter them. Staying ahead of the curve of the ever changing regulatory landscape is imperative because the cost of non-compliance can be steep. In addition to the usual mandated regulations such as GDPR, CCPA, PCS-DSS and HIPAA that many are familiar with, new initiatives are being unveiled every year. One example is the NIS2 Directive, the updated iteration of the NIS directive, that was set to establish a common framework for the security for networks and information systems across all EU nations.
Like the earlier example of the tax auditor that comes to visit your business, a formal regulatory audit can be nerve racking as well. That’s why it is good to have a voluntary audit to ensure that your business is meeting all compliancy requirements. These audits follow a well-established security framework such as NIST to not only determine one’s state of compliancy but reduce a company’s legal risk in the future.
Resiliency and Continuity
It is impossible to stop every possible attack today. The realistic goal is to achieve business resiliency and continuity by creating strategies that will get the business operational as quickly as possible in the event of an attack. Even in the case of ransomware, the most expensive aspect of a cyberattack for a business is downtime. A cybersecurity audit can analyze your risk environment and security controls to predict how long it would take to regain control of your infrastructure in the event of an attack.
What Makes a Good Audit?
A well-designed audit should include more than a list of vulnerabilities and security jargon. It should include actionable recommendations that non-technical stakeholders can read and understand. Recommendations should include necessary security policies, risk management procedures, user access controls, physical security measures, and security controls. Auditing is also not a one-time process. The frequency of regular audits will vary by organization based on its unique risk landscape and the quantity of its network endpoints and data storage. Auditing should take place on an annual basis at the very least if not quarterly.
Companies such as McDonald’s have been using auditing as a competitive differentiator for years. Its Supplier Quality Management program requires all suppliers to set strict quality standards and undergo regular audits to ensure compliance. Consistency and reliability are essential characteristics of any successful business today and best of breed companies embrace this philosophy. Cybersecurity audits should be conducted for more reasons than to just checking a box. They should be supported by top leadership as a way to evaluate the readiness of your organization. When done correctly, auditing can be something that stakeholders actually look forward to, unless of course, it involves the tax collector.