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The importance of choosing the right auditor
Since I’m in the business of helping organizations prepare for information security and data privacy audits, I’m often asked how to choose an auditor. This article discusses some of the considerations that companies should take into account when choosing an auditor.
Of course, the goal is to find an auditor who will be a good fit for their organization and provide a reasonably pleasant customer experience. Audits might not be fun, but they don’t have to be painful either.
Since there are many frameworks, such as SOC 2, ISO 27001, HIPAA, PCI, CCPA, and GDPR, it makes sense that there are a lot of different auditors. I’ll put them into a few buckets: “big four,” “big eight,” “large mid-tier brands,” and “everyone else.”
The big four
Let’s start at the top with the “big four” audit firms. They have brand prestige, they’re good for impressing your prospects and customers, they provide the highest level of assurance, they have considerable influence over AICPA audit standards and guidelines, and they’re super expensive.
Why would someone choose a big four auditor? First, their customers require it. The expectation with a big four audit is that it will be the most thorough, meticulous, and exhaustive. Everything will be done correctly in accordance with the relevant criteria and requirements. Big four customers tend to be large and/or inherently risky businesses. Think major cloud providers and big tech, large financial and insurance companies, big government contractors, and other large enterprises.
While a big four audit is the industry gold standard, it’s quite simply too expensive for most medium enterprises and small businesses to even consider. If you don’t have a specific reason, and your customers aren’t demanding a big four audit, this probably isn’t a cost-effective option.
The big eight
“Big eight” is the next tier below the big four. Like the big four, these firms target a similar market segment and are a good fit for enterprise customers who need a large, respected audit brand, but whose customers don’t specifically require a big four audit. This tier will provide a similar level of audit assurance and capabilities as the big four at a lower cost.
Large mid-tier brands
The next bucket of auditors are what I consider the large, mid-tier, brand name firms. These audit firms tend to perform a number of different information security audits for many of the common security frameworks, they also typically provide consulting services and sometimes technical audit services like penetration testing.
These firms have strong marketing operations and are very visible in internet searches for things like “SOC 2 auditor” and “ISO 27001 auditor.” They are significantly cheaper than the big four, the audit methodology is less exhaustive, the level of assurance is arguably lower, though they still meet the requirements of most customers. These auditors are a fine choice for many companies. The brands are known, and generally respected, however, there will be individual buyers who are knowledgeable about the industry and have a more negative opinion of certain auditors based on personal experience or some other factor.
One consideration for this type of auditor, as with any large company, is that consistency, customer experience, and quality control are ongoing challenges. You will engage with a dedicated sales team that will not be involved with the actual audit. The audit managers are typically experienced practitioners, but many of the actual auditors are young and fairly junior in the industry, but this can be true with big four and big eight firms too.
When thinking about how to choose an auditor, remember that the auditor who gets assigned to your account can heavily impact your overall audit experience. Auditors may not remain the same year after year due to turnover or reallocation, and junior auditors are more likely to do things that customers find burdensome, such as asking for evidence that’s not relevant or required because it’s on their standard Information Request List (IRL) template. There is a higher likelihood that a junior auditor may have difficulty understanding non-standard practices or complex technologies and how they relate to real-world risks and standards—many of which have outdated control language that doesn't map well to current and emerging technologies. They can also get hung up on minor details that have little impact on real-world risk.
The final auditor bucket contains the “Unknown Brand” or basically “Everyone Else.” This is the most diverse and eclectic group. This group could include large traditional, financial CPA firms, with a less well-known information security practice. They could be boutique and independent firms run by former auditors and managers from the larger firms listed above. They also consist of regional information security firms, and foreign firms based in another country but with an international audit capacity.
While this last pool can be a bit harder to assess, this is where small and mid-sized companies can find some real gems. Before I dig into the details, I’ll disclose my personal bias on how to choose an auditor. For almost all professional services, I typically prefer boutique providers. In smaller firms, senior management tends to be more hands-on, there is less separation between sales and operations, auditors themselves tend to be more senior, and the customer experience is overall more consistent and reliable. In addition, there’s less overhead to pay for the brand name which makes pricing more competitive. In my experience, boutique firms provide a “higher touch” experience as their auditors aren’t servicing as many clients simultaneously.
There are no good or bad auditors—just different
At the end of the day, it's not so much that auditors are fully “good” or “bad”, but it is important to pick the auditor that satisfies your goals and objectives; one that aligns with your needs, budget, and organizational culture.
Here’s a quick checklist of things we consider whenever we refer an auditor to one of our valued customers:
- Cost: What is the audit budget?
- Inherent risk: The inherent processing risk will influence their customer’s expectations.
- Brand: Who are the end-users and how sensitive are they to the auditor brand?
- Reputation and quality: Can the auditor provide strong and relevant references?
- Communication: Is communication timely and helpful? Are expectations set properly?
- Technical competence: Is the auditor experienced in relevant technologies like cloud and serverless architectures?
- Availability: Can the auditor deliver the audit at the time the customer wants?
- Timezone: Are time zones compatible for interviews and communications?
- Cultural fit: Do you simply “hit it off” with the auditor and like them and want to work with them? Are there any language barriers?
- Audit Platforms and tooling: Are you aligned on the mechanics of the audit and evidence sharing methods? Can the auditor access and utilize evidence from your repository or do you need to manually re-upload everything into their tool or platform?
Compliance is a bit like information security—it needs to be well-aligned with the organizational context and objectives in order to be efficient and cost-effective. Compliance enables the achievement of business objectives, it is not an end in itself. If this is not properly understood, organizations risk spending too much time and money on something that does not have a justifiable return on investment.
Beyond that, life is short. When you have choices, which you do in the case of your auditor, choose wisely. Your future self, and your organization, will thank you for it.
About the author: Matt leads the Privacy and Compliance team at Vanta. He has spent his 20+ year career in security and information technology. Prior to joining Vanta, Matt was the U.S. Director for the Cyber, Risk & Advisory practice at BSI where he led an information security consultancy providing risk management and readiness consulting for common industry frameworks such as ISO 27001, SOC2, HIPAA, and PCI. At Vanta, Matt works closely with audit partners, advises customers on security and compliance, and provides input to the product team.
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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