Best Practices in Audit Management Process

What is Audit Management?

Audit management is the oversight, governance, and established procedures that help you manage an audit. Audits comprise several stages: preparation, execution, reporting, and follow-up procedures. Audit preparation and follow-up procedures may get overwhelming quickly if a workable audit management tool is not in place. 

What is the Need for Audit Management Software?

While managing the process manually with spreadsheets, long meetings, and email is possible, automating the audit workflows will eliminate the familiar pain points that accompany audit preparation done the conventional way. The growing body of stringent data privacy laws and security mandates has pushed for better methods of audit preparation and evidence collection to address increasingly complex requirements. Audit management software makes a huge difference in audit preps, facilitating tasks like storing documentation, creating forms, and following up on third-party risk assessments.

The Dual Role of Audit Management

An interesting thought about audit management is that it plays a dual role within organizations. It is both a guardian of integrity and a strategic advisor. While auditors are commonly known for their role in assessing controls, identifying risks, and ensuring compliance, they also contribute to the strategic decision-making at the top level of an enterprise.

Modern internal audit functions have evolved beyond mere compliance checks. They now engage in risk-based audit management comprising risk identification, process improvement, and value creation. Internal auditors possess a unique vantage point as they comprehensively view an organization’s operations. This insight allows them to provide valuable input to management by identifying areas for operational enhancement, cost-saving opportunities, and avenues for improvement.

What are the Three Types of Audits in GRC?

When discussing GRC audit management, there are three main types of audits: internal, external, and third-party audits. 

1. Internal Audit

Internal audit is a crucial organizational process that seeks to provide independent and objective evaluations. Its primary focus is assessing and improving the effectiveness of risk management, control processes, and governance structures. Internal audits are pivotal in ensuring adherence to company policies and regulatory requirements. An organization’s internal auditing team conducts these audits to evaluate strengths and weaknesses, enabling continuous improvement.

A fundamental distinction between internal and external audits is that external auditors maintain independence from management. This independence allows them to provide an objective opinion on the accuracy of financial statements presented by management.

2. External Audit

Unlike internal audits conducted by an organization’s internal teams, external audits are performed by independent audit firms or professionals who are not affiliated with the organization. These audits focus on assessing the organization’s cybersecurity measures, compliance with industry standards and regulations, and overall effectiveness of risk management strategies.

Regulatory bodies sometimes mandate these audits. External audits are critical for gigantic corporations and public companies to instill trust among shareholders and investors.

3. Third-Party Audit

A third-party audit assesses critical processes, documentation, and compliance against established standards. It is conducted by an independent audit organization that does not have a vested interest in the audited organization. These audits objectively evaluate quality management systems, processes, and adherence to industry standards. Certification bodies or regulatory authorities often perform third-party audits to ensure objectivity and compliance.

When choosing a digital tool to manage audits, you should be able to find a solution for both external and internal audit management software in one product.

Types of Security Audits and Recommended Frequencies

Type of Security Audit	Recommended Frequency	Notes
General IT Security Audit	At least once per year	More frequent schedules may be adopted based on the organization’s size and risk level.
SOC 2 Audit	Annually	Required for maintaining SOC 2 attestation.
ISO 27001 Certification Audit	Annually	Required for maintaining ISO 27001 certification.
HIPAA Compliance Audit	Annually	Required to ensure ongoing compliance with HIPAA regulations.
SOX Compliance Audit	Annually	Required for ensuring compliance with the Sarbanes-Oxley Act.
PCI DSS Audit	Annually	Required for organizations handling credit card transactions.
Penetration Testing	Quarterly to Annually	Frequency depends on the organization’s risk profile and changes in the IT environment.
Vulnerability Assessment	Monthly to Quarterly	Frequent assessments help in identifying and mitigating new vulnerabilities promptly.
Internal Security Controls Review	Quarterly	Regular internal reviews ensure continuous improvement and compliance with internal policies.
Ad-Hoc Security Audits	As needed	Conducted after significant changes in the IT environment or following a security incident.
Third-Party Security Audit	Annually or as required by agreements	Ensures third-party vendors comply with the organization’s security standards and regulations.
Staff Training and Awareness Review	Annually or Semi-Annually	Regular training ensures staff are aware of the latest security practices and potential threats.
Log Review and Incident Response Audit	Continuously or Monthly	Continuous monitoring and periodic audits ensure prompt detection and response to security incidents.

Notes:

• General IT Security Audit: These audits can encompass a broad range of security controls and may be performed by internal or external auditors.
• Ad-Hoc Security Audits: These are not on a regular schedule but are essential after significant changes or breaches to ensure no new vulnerabilities are introduced.
• Penetration Testing and Vulnerability Assessment: Although these are part of broader security audits, they are mentioned separately due to their importance and specific frequency requirements.

Audit Management: Best Practices

Dedicate a Team

Choose the right people from the organization to form a dedicated team to focus on the audit. Draft a list of roles and responsibilities related to your audit so you or your auditor will know who to address or assign questions to. This will be essential to drive the audit through to completion. 

Understand the Audit Requirements

Thoroughly review the security standards and regulations applicable to your organization. 

Conduct a Pre-Audit Risk Assessment

Conducting a comprehensive risk assessment is an incredibly productive way of getting to know your current security position and gaining deep insights into your organization. Using the right GRC platform, you can simplify identifying and closing gaps and use the risk assessment outcome to efficiently communicate the audit’s importance across the organization. 

Limit Scope

Take a good look at your organization as a whole. Identify and choose which systems to include in your audit. Including every system in your organization may be the highest form of due diligence. Still, you may need to increase the workload and even include services from third parties that are already SOC 2 certified. Limit your scope to improve manageability and focus.

Maintain Accurate Documentation

Keep detailed records of security policies, procedures, and control implementation. Auditors rely heavily on evidence and documentation to support their conclusions. The evidence acquired is a significant factor in the outcome of your audit. After the tremendous investment in the certification and compliance process, producing a well-marked audit trail is the least you can do to ensure your efforts will be smooth and successful. 

Communication is Key

Audit prep can involve members of every department across an organization. When working with so many people, misunderstandings are common. Mainly, when communicating regarding controls, ensure the team dedicated to remediation fully understands the gaps that need to be addressed. Also of importance is to maintain communication with your auditor in the case of an external auditor to understand their expectations and needs. 

Use Automation and Technology

There is an incredible array of innovative tools and platforms to help you streamline the audit management system. Choose an audit management solution capable of compliance automation to identify, monitor, remediate, and report automatically. Remember that compliance with frameworks like SOC 2 will involve an annual audit, so use a platform that is easy to update and will quickly scale up with your company as you need. Look out for features that simplify the complex & tedious process of audit management and take out some of the manual labor.

An automated solution for increasing compliance maturity removes repeated tasks, saving time and money while seamlessly cross-referencing controls and requirements across many frameworks. The result is a simplified process that produces always correct and current data.

A Practical Walkthrough of the Audit Management Process

Meet “SecureTech,” a financial services firm specializing in digital payment solutions. As SecureTech expands, safeguarding financial data and ensuring seamless transactions becomes paramount. Enter Alex Turner, a seasoned internal auditor. Tasked by SecureTech, Alex’s mission is to conduct a meticulous internal audit, aligning with the NIST Cybersecurity Framework.

Step 1: Setting the Stage for Objectives 

The journey begins with a precise scoping of audit objectives. Critical discussions are held with stakeholders to define the scope and expectations of the audit. This dialogue between Alex and SecureTech’s leadership provides the framework for the audit process ahead.

Step 2: In-Depth Data Gathering

The heart of the audit lies in comprehending SecureTech’s operational intricacies. Alex delves into physical infrastructure and scrutinizes digital systems. Detailed analysis of data management practices, transaction protocols, and security mechanisms is undertaken to garner comprehensive insights.

Step 3: Identifying Essential Assets

Central to the audit is identifying and prioritizing critical assets. In SecureTech’s landscape, these encompass financial databases, transactional platforms, and the integrity of their digital payment gateway. These elements serve as the focal points of Alex’s meticulous evaluation.

Step 4: Risk Assessment

The audit transforms into a strategic risk assessment. Alex scrutinizes conceivable threats, such as unauthorized access, data breaches, and cyber intrusions. Each risk is evaluated based on potential impact and likelihood, considering the sensitivity of financial data.

Step 5: Vulnerability Analysis

With the lens of a cybersecurity analyst, we delve into system vulnerabilities. Alex employs specialized tools to scan SecureTech’s digital infrastructure for weaknesses. These could range from outdated software versions to potential entry points for malicious actors.

Step 6: Security Controls Evaluation

This step entails assessing SecureTech’s security controls against the NIST Cybersecurity Framework. Alex reviews access controls, encryption practices, incident response procedures, and more. The objective is to ascertain alignment with the framework’s guidelines.

Step 7: Compliance Check

SecureTech’s compliance with the NIST Cybersecurity Framework takes center stage. Alex examines how SecureTech adheres to the framework’s recommended practices, particularly in protecting sensitive financial data.

Step 8: Comprehensive Audit Report

The audit findings culminate in a comprehensive report. Alex outlines identified vulnerabilities, provides prescriptive measures adhering to the NIST Cybersecurity Framework, and constructs a roadmap for implementation. This document serves as a strategic guide for bolstering SecureTech’s cybersecurity posture.

Step 9: Remediation Strategies

Implementation commences, guided by the NIST Cybersecurity Framework’s principles. Collaborating with SecureTech’s teams, Alex aids in addressing vulnerabilities, enhancing access controls, and fostering a cybersecurity awareness culture.

Step 10: Ongoing Vigilance

The journey doesn’t conclude with implementation. Regular follow-up assessments gauge the sustained effectiveness of measures implemented according to the NIST Cybersecurity Framework. These checkpoints allow for course correction and continuous improvement.

How Centraleyes Prepares You for a Security Audit

A security audit can be a pivotal moment for small businesses, and the Centraleyes cloud-based platform can help your business prepare for the big day. At Centraleyes, we integrate a risk-based approach to security audits that lays a solid foundation for compliance requirements so you can be confident that your system is strong at its base.

Contact us today to see how Centraleyes can help your business prepare for a successful security audit.