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Security Audits

Updated Jan 30, 2024 ·

Overview​

A security audit is a comprehensive assessment of an organization’s information system to evaluate its security posture.

  • Evaluates risks and vulnerabilities across systems
  • Ensures compliance with policies and regulations
  • Provides recommendations to strengthen defenses

In some cases, like regulatory compliance, external auditors set and perform the security audit. The organization’s role is mainly to prepare and provide the necessary resources for the audit team.

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Mitigating any deficiencies encountered during the security audit is something that will be addressed after the security audit is complete and is not part of audit planning.

Audit Process​

The information system security audit process consists of:

  1. Determining the goals
  2. Involving the right business unit leaders
  3. Determining the scope
  4. Choosing the security audit team
  5. Planning the security audit
  6. Conducting the security audit
  7. Documenting the results
  8. Communicating results to the right leaders

Internal Team vs. External Team​

Using an internal team for auditing has several advantages:

  • Familiarization with internal workings

    • Understands the systems, processes, and culture
    • Can quickly identify areas of concern based on prior knowledge

  • Agility in performing assessments

    • They are already part of the organization
    • Can respond faster to issues or incidents

  • Ability to test weakest/obscure parts

    • Knows hidden or poorly documented areas of the system
    • Can uncover vulnerabilities that outsiders might miss

However, internal teams also have drawbacks:

  • Limited exposure to other auditing methods

    • Knowledge is mostly focused on their own systems
    • May miss techniques or approaches used elsewhere
    • Restricts the overall scope of assessments

  • Potential conflicts of interest

    • Auditors may hesitate to report issues affecting bosses or coworkers
    • Fear of negative consequences can influence findings

Organizational culture affects reporting, as auditors are more likely to be honest with their findings when openness and trust are encouraged.

Compliance​

Compliance ensures that information systems and security practices meet established standards, regulations, and laws.

  • Crucial for protecting sensitive data and avoiding legal penalties.
  • Implementing specific controls and maintaining policies and procedures.
  • Regularly auditing and assessing the organization's security posture.

For more information, please see Compliance as a Governance Element.

Audit Committee​

An Audit Committee is a group of people responsible for supervising the organization's audit and compliance functions.

  • Typically members of the company's board of directors.
  • Reviews the financial reporting processes and internal controls.
  • Ensures the organization is in compliance with regulations.
  • Addresses any issues raised by auditors.

Audit Classifications​

  • First-Party Audit

    • Conducted by an organization on its own processes and systems
    • Helps identify internal risks and gaps
    • Supports preparation for external audits

  • Second-Party Audit

    • Conducted by an organization on a supplier or contractor
    • Typically conducted as part of contractual obligations
    • Example: a customer auditing a vendor

  • Third-Party Audit

    • Conducted by an independent certification body or regulatory agency

    • Often used for compliance, certification, or industry standards

    • Also referred as external audit

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      A nondisclosure agreement (NDA) is a key prerequisite before a third-party team is permitted to audit an organization’s systems, so that sensitive data can be protected from unauthorized entities.

Audit Types​

Internal Audit​

Internal audits are systematic evaluations of the effectiveness of internal controls, compliance, and integrity of information systems and processes.

  • Usually follows a defined framework and documented procedures.
  • Often required for regulatory compliance or management oversight.
  • Focus on data protection, network security, access, and incident response

How it works:

  1. Audit team check policies against best practices and regulations
  2. User access rights are checked against employee responsibilities.
  3. Access approval and revocation processes are verified.
  4. Audit team tests the security controls using accounts with limited permissions.
  5. Findings are documented and improvements are recommended.

Examples of internal assessments:

  • Access control reviews
  • Password policies review
  • Network security audit
  • Checking adherence to regulatory standards
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Internal audits are structured, formal, and documented evaluations while internal assessments are often broader and more flexible.

For more information, please see Internal Assessments.

External Audit​

Also called third-party audit, external audits are formal, structured evaluations by an independent organization to check security controls and overall system safety.

  • Offer an unbiased view of security posture
  • Cover data protection, network security, access, etc.
  • Identify gaps in policies and controls for regulatory compliance
  • Used for regulatory compliance, certifications, or contracts.

Examples of external audits:

  • SOC 2 audit
  • ISO 27001 audit
  • Financial compliance audit
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External audits are formal, standardized, and reportable, while external assessments are more flexible and advisory

For more information, please see External Assessments.