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Risk assessment 101: Working backwards from the controls
Performing an information security risk assessment in order to meet the requirements of ISO 27001, SOC 2, PCI DSS, or HIPAA can feel a bit daunting at first. The truth is there are a number of different approaches and methodologies that can work. In this article, I’m going to provide you with a simple and practical example of how you can start with a controls framework, like the ISO 27001 Annex A, and work backwards.
Start with any control. In this example let’s use the first control from the ISO 27001 Annex A:
Section A.5 Information Security Policies includes an information security objective, which is: To provide management direction and support for information security in accordance with business requirements and relevant laws and regulations.
The first control is A.5.1.1 Policies for Information Security: A set of policies for information security shall be defined, approved by management, published and communicated to employees and relevant external parties.
In summary, this control activity indicates that companies should communicate approved policies to personnel so that those personnel know how to perform their job roles in accordance with the direction and rules set by management.
Facing vulnerabilities in the org
The first step after we read and understand the control is to assess how well our organization has implemented it. To the extent that we haven’t implemented the control, those gaps will be listed on our Risk Assessment document as Vulnerabilities.
Policy vulnerabilities could include things like the following:
- We don’t have any security policies
- Policies are old and out of date
- Policies are inaccurate and/or contradictory
- Policies have not been reviewed and approved by management
- Policies haven’t been published or communicated to personnel
- Policies haven’t been acknowledged or accepted by personnel
- Personnel can’t find or access policies when needed
- Policies are too long, too technical, or generally not understandable by the user
What’s the risk then? The risks of not effectively implementing policies could include:
- Personnel don’t understand the rules or management’s direction
- Personnel take actions that are not consistent with the will of management
- Personnel perform actions based on incorrect or out-of-date procedures
- Management lacks a mechanism to direct the organization’s behavior
The next question to ask is: If we have issues or weaknesses with policies, do we have any other controls that could mitigate those potential risks? We can list those as Existing Controls. For example:
- All employees perform security awareness training
- Employees receive targeted training relevant to their role
- Managers meet with direct reports weekly to review their work
- Managers are responsible to mentor and provide ad hoc guidance
- Logging and alerting systems detect and alert on technical misconfigurations or vulnerabilities
After considering the potential risks along with the vulnerabilities and existing controls, we will document a Risk Scenario which could be the most important potential risk or a combination of possible risks. An example risk scenario could be as follows:
- Users perform insecure actions because they are not aware of company security policies
Identifying risk scenarios
Having identified the Risk Scenario we now need to assess the likelihood and impact of the risk materializing which will be combined to give the overall Risk Score. Typically, the likelihood, impact, and overall risk are ranked on a scale of 1-3 or 1-5, which represents something like low, medium, and high.
For this example, we’ll say the likelihood of the risk materializing is a medium likelihood with a score of two (2). The rationale is that while we do lack clear policy direction, a mitigating factor is that employees can solicit management for direction and they do receive basic security training.
Let’s say the impact is also medium or two (2). The rationale is that we expect employees to have enough security awareness and competence to ask for help before taking an insecure action, but the possibility exists that that won’t always happen. An employee could make a serious mistake, like misconfiguring a publicly accessible datastore to allow unauthorized access to sensitive data.
Using a simple multiplication methodology, the overall risk score in this case would be four (4), which would represent a medium risk overall according to our method.
Now a common mistake is to get hung up on the scoring for likelihood, impact, and overall risk. Don’t worry about that too much. It’s a subjective determination, just do your best. The most important thing is to identify and document the risk scenario. You can always adjust the scoring later based on a reconsideration or new inputs.
The next step is to determine the Risk Treatment. The typical options are: Accept, Remediate, Transfer, or Avoid. In our case we’ll mitigate the risk through some planned actions which we’ll call our Risk Treatment Plan.
The last major step now is to document our Risk Treatment Plan, in ISO terms, or simply, the tasks that we will take to mitigate the risk. Our risk treatment plan will be as follows:
- Create, review, and/or update all relevant information security policies
- Obtain management approval for all final policies
- Publish and communicate policies to relevant users
- Obtain user acknowledgement or acceptance of all relevant policies
- Implement a process for new hires to acknowledge and accept policies at time of hire
- Implement a policy to review, update, approve, and communicate policies at least annually
In order for this risk assessment to meet ISO 27001 requirements we need to assign a Risk Owner to each risk and obtain their approval of the risk treatment plan.
That’s basically it. You can get a lot more fancy with information like threats, mappings to specific assets or control frameworks, but we’ve covered the essential elements.
Working backwards from control sets such as the ISO 27001 Annex A is a great approach for organizations that are relatively new to formal risk assessment. I recently worked through the Department of Health and Human Services’ HIPAA Risk Security Risk Assessment (SRA) Tool, and it took a very similar approach, based on the HIPAA Security Rule control requirements.
There are various methods for assessing risk, this is a simple and straightforward approach to help you get started.
About the author: Matt Cooper is Principal, Cybersecurity & Data Privacy on Vanta’s sales team. Matt has been with Vanta since February of 2021.
Determine whether the GDPR applies to you and if so, if you are a processor or controller (or both)
Do you sell goods or service in the EU or UK?
Do you sell goods or services to EU businesses, consumers, or both?
Do you have employees in the EU or UK?
Do persons from the EU or UK visit your website?
Do you monitor the behavior of persons within the EU?
Create a Data Map by taking the following actions
Identify and document every system (i.e. database, application, or vendor) which stores or processes EU or UK based personally identifiable information (PII)
Document the retention periods for PII in each system
Determine whether you collect, store, or process “special categories” of data
Determine whether your Data Map meets the requirements for Records of Processing Activities (Art. 30)
Determine whether your Data Map includes the following information about processing activities carried out by vendors on your behalf
Determine your grounds for processing data
For each category of data and system/application have you determined the lawful basis for processing based on one of the following conditions?
Take inventory of current customer and vendor contracts to confirm new GDPR-required flow-down provisions are included
Review all customer contracts to determine that they have appropriate contract language (i.e. Data Protection Addendums with Standard Contractual Clauses)
Review all in-scope vendor contracts to determine that they have appropriate contract language (i.e. Data Protection Addendums with Standard Contractual Clauses)
Have you performed a risk assessment on vendors who are processing your PII?
Determine if you need to do a Data Protection Impact Assessment
Is your data processing taking into account the nature, scope, context, and purposes of the processing, likely to result in a high risk to the rights and freedoms of natural persons?
Review product and service design (including your website or app) to ensure privacy notice links, marketing consents, and other requirements are integrated
Does the notice to the data subject include the following items?
Does the notice also include the following items?
Do you have a mechanism for persons to change or withdraw consent?
Update internal privacy policies to comply with notification obligations
Update internal privacy notices for EU employees
Determine if you need to appoint a Data Protection Officer, and appoint one if needed
Have you determined whether or not you must designate a Data Protection Officer (DPO) based on one of the following conditions (Art. 37)?
If you export data from the EU, consider if you need a compliance mechanism to cover the data transfer, such as model clauses
If you transfer, store, or process data outside the EU or UK, have you identified your legal basis for the data transfer (note: most likely covered by the Standard Contractual Clauses)
Have you performed and documented a Transfer Impact Assessment (TIA)?
Confirm you are complying with other data subject rights (i.e. aside from notification)
Do you have a defined process for timely response to Data Subject Access Requests (DSAR) (i.e. requests for information, modification or deletion of PII)?
Are you able to provide the subject information in a concise, transparent, intelligible and easily accessible form, using clear and plain language?
Do you have a process for correcting or deleting data when requested?
Do you have an internal policy regarding a Compelled Disclosure from Law Enforcement?
Determine if you need to appoint an EU-based representative, and appoint one if needed
Have you appointed an EU Representative or determined that an EU Representative is not needed based on one of the following conditions?
If operating in more than one EU state, identify a lead Data Protection Authority (DPA)
Do you operate in more than one EU state?
If so, have you designated the Supervisory Authority of the main establishment to act as your Lead Supervisory Authority?
Implement Employee Trainings to Demonstrate Compliance with GDPR Principles and Data Subject Rights
Have you provided appropriate Security Awareness and Privacy training to your staff?
Update internal procedures and policies to ensure you can comply with data breach response requirements
Have you created and implemented an Incident Response Plan which included procedures for reporting a breach to EU and UK Data Subjects as well as appropriate Data Authorities?
Do breach reporting policies comply with all prescribed timelines and include all recipients i.e. authorities, controllers, and data subjects?
Implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk
Have you implemented encryption of PII at rest and in transit?
Have you implemented pseudonymization?
Have you implemented appropriate physical security controls?
Have you implemented information security policies and procedures?
Can you access EU or UK PII data in the clear?
Do your technical and organizational measure ensure that, by default, only personal data which are necessary for each specific purpose of the processing are processed?
Develop a roadmap for successful implementation of an ISMS and ISO 27001 certification
Implement Plan, Do, Check, Act (PDCA) process to recognize challenges and identify gaps for remediation
Consider ISO 27001 certification costs relative to org size and number of employees
Clearly define scope of work to plan certification time to completion
Select an ISO 27001 auditor
Set the scope of your organization’s ISMS
Decide which business areas are covered by the ISMS and which are out of scope
Consider additional security controls for business processes that are required to pass ISMS-protected information across the trust boundary
Inform stakeholders regarding scope of the ISMS
Establish an ISMS governing body
Build a governance team with management oversight
Incorporate key members of top management, e.g. senior leadership and executive management with responsibility for strategy and resource allocation
Conduct an inventory of information assets
Consider all assets where information is stored, processed, and accessible
- Record information assets: data and people
- Record physical assets: laptops, servers, and physical building locations
- Record intangible assets: intellectual property, brand, and reputation
Assign to each asset a classification and owner responsible for ensuring the asset is appropriately inventoried, classified, protected, and handled
Execute a risk assessment
Establish and document a risk-management framework to ensure consistency
Identify scenarios in which information, systems, or services could be compromised
Determine likelihood or frequency with which these scenarios could occur
Evaluate potential impact of each scenario on confidentiality, integrity, or availability of information, systems, and services
Rank risk scenarios based on overall risk to the organization’s objectives
Develop a risk register
Record and manage your organization’s risks
Summarize each identified risk
Indicate the impact and likelihood of each risk
Document a risk treatment plan
Design a response for each risk (Risk Treatment)
Assign an accountable owner to each identified risk
Assign risk mitigation activity owners
Establish target dates for completion of risk treatment activities
Complete the Statement of Applicability worksheet
Review 114 controls of Annex A of ISO 27001 standard
Select controls to address identified risks
Complete the Statement of Applicability listing all Annex A controls, justifying inclusion or exclusion of each control in the ISMS implementation
Continuously assess and manage risk
Build a framework for establishing, implementing, maintaining, and continually improving the ISMS
Include information or references to supporting documentation regarding:
- Information Security Objectives
- Leadership and Commitment
- Roles, Responsibilities, and Authorities
- Approach to Assessing and Treating Risk
- Control of Documented Information
- Internal Audit
- Management Review
- Corrective Action and Continual Improvement
- Policy Violations
Assemble required documents and records
Review ISO 27001 Required Documents and Records list
Customize policy templates with organization-specific policies, process, and language
Establish employee training and awareness programs
Conduct regular trainings to ensure awareness of new policies and procedures
Define expectations for personnel regarding their role in ISMS maintenance
Train personnel on common threats facing your organization and how to respond
Establish disciplinary or sanctions policies or processes for personnel found out of compliance with information security requirements
Perform an internal audit
Allocate internal resources with necessary competencies who are independent of ISMS development and maintenance, or engage an independent third party
Verify conformance with requirements from Annex A deemed applicable in your ISMS's Statement of Applicability
Share internal audit results, including nonconformities, with the ISMS governing body and senior management
Address identified issues before proceeding with the external audit
Undergo external audit of ISMS to obtain ISO 27001 certification
Engage an independent ISO 27001 auditor
Conduct Stage 1 Audit consisting of an extensive documentation review; obtain feedback regarding readiness to move to Stage 2 Audit
Conduct Stage 2 Audit consisting of tests performed on the ISMS to ensure proper design, implementation, and ongoing functionality; evaluate fairness, suitability, and effective implementation and operation of controls
Address any nonconformities
Ensure that all requirements of the ISO 27001 standard are being addressed
Ensure org is following processes that it has specified and documented
Ensure org is upholding contractual requirements with third parties
Address specific nonconformities identified by the ISO 27001 auditor
Receive auditor’s formal validation following resolution of nonconformities
Conduct regular management reviews
Plan reviews at least once per year; consider a quarterly review cycle
Ensure the ISMS and its objectives continue to remain appropriate and effective
Ensure that senior management remains informed
Ensure adjustments to address risks or deficiencies can be promptly implemented
Calendar ISO 27001 audit schedule and surveillance audit schedules
Perform a full ISO 27001 audit once every three years
Prepare to perform surveillance audits in the second and third years of the Certification Cycle
Consider streamlining ISO 27001 certification with automation
Transform manual data collection and observation processes into automated and continuous system monitoring
Identify and close any gaps in ISMS implementation in a timely manner
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Determine which annual audits and assessments are required for your company
Perform a readiness assessment and evaluate your security against HIPAA requirements
Review the U.S. Dept of Health and Human Services Office for Civil Rights Audit Protocol
Conduct required HIPAA compliance audits and assessments
Perform and document ongoing technical and non-technical evaluations, internally or in partnership with a third-party security and compliance team like Vanta
Document your plans and put them into action
Document every step of building, implementing, and assessing your compliance program
Vanta’s automated compliance reporting can streamline planning and documentation
Appoint a security and compliance point person in your company
Designate an employee as your HIPAA Compliance Officer
Schedule annual HIPAA training for all employees
Distribute HIPAA policies and procedures and ensure staff read and attest to their review
Document employee trainings and other compliance activities
Thoroughly document employee training processes, activities, and attestations
Establish and communicate clear breach report processes
to all employees
Ensure that staff understand what constitutes a HIPAA breach, and how to report a breach
Implement systems to track security incidents, and to document and report all breaches
Institute an annual review process
Annually assess compliance activities against theHIPAA Rules and updates to HIPAA
Continuously assess and manage risk
Build a year-round risk management program and integrate continuous monitoring
Understand the ins and outs of HIPAA compliance— and the costs of noncompliance
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