Glossary

Audit Trail

From malicious fraud and cybersecurity breaches to small typos in financial statements, no company is ever completely safe from risks. Preparing for audits is then naturally a part of operating in today’s threat-laden environment.

No matter how risk-free you think your business is, collecting data for audit trails is still an essential part of ensuring compliance with data security laws and preserving trust with your clients and partners. Let’s go over the audit trail and why it matters for your firm.

What Is an Audit Trail

What Is an Audit Trail?

Audit trails are comprehensive records of business activities and events organized chronologically. They can record either accounting transactions, project details, access privileges to sensitive data and services, security controls, or any other relevant activity.

These records are used as a reference whenever the company wants to check for security violations or other potential problems whenever an incident occurs, such as a data breach. Third-party auditing teams might also use the trail to ensure legal compliance.

Either way, these tools are useful for storing information on and analyzing business operations. There are three main types of audit trails:

  • System-level: An IT administrator with system-wide auditing capabilities would likely record all log-on attempts on the server and all actions performed by any users.
  • Application-level: A system-wide audit might not cover activity that occurs within applications, such as accessing or editing certain files.
  • User-level: Individual users can also be part of the trail. An auditor might be interested in one’s authentication attempts, resources accessed, and any commands made.

For instance, a financial audit trail would record details like the identities of the sellers and buyers, the time and date of the transaction, and any key processes that might be useful to review.

For most individuals, an audit trail can be as simple as a receipt you get from the cashier. For businesses with more complex needs, paper trails record all the details regarding a large transaction so that the business has something to show auditing teams whenever they suspect strange financial activity.

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Why Are Audit Trails Important?

Even if your industry does not require audit trail reporting by law, keeping an audit trail is still a strongly recommended best practice for most companies. Any time you want to trace your steps, such as when you find a process irregularity or a potential cybersecurity breach, an audit trail is the key to digging out the culprit.

Some instances where an audit trail would be helpful include:

  • Keeping tabs on user activities to identify internal fraud
  • Knowing who is accessing sensitive data and what it is being used for
  • Malware and virus detection to point out data breach opportunities
  • Staying compliant with laws that require regular independent audits

And above all, maintaining a proper audit trail subsequently improves the security posture of your organization as a whole. Staff members and management are more accountable for their actions, and you have a stronger awareness of what goes on inside your company.

Use Cases For Audit Trails

When we refer to audit trails in the modern day, most people think about the data audit trails managed by IT staff. Almost all types of businesses handle electronic records through computers, which themselves have auditable activities like automation.

Examples of fields that call for auditing practices are:

  • Cybersecurity services audit to detect cyberattacks and improve incident response
  • Finance audits for fraud prevention and financial recordkeeping
  • Healthcare firms need to keep patient data safe and stay compliant with HIPAA
  • Manufacturing keeps audits to search for sources of defects

In general, any organization that handles sensitive data, works with potentially risky operations, or has compliance responsibilities can benefit from audit tracking in some way.

How Should a Firm Implement Audit Trails?

Audit trails start by recording all the information that might be necessary for review later. A general process might be:

  • Detailing an event that occurred
  • Recording the user who instigated it
  • Showing the result of the event
  • Time-stamping the record

These “events” can take the form of file access or the use of resources or internal services by a particular user. The more details stored, the more useful the data can be when an audit is necessary.

Deciding on Scope

It’s up to a business’s IT administrators, security staff, or management as to what scope an audit trail should cover. Because it takes a significant amount of money and resources to set up a trail, most organizations choose only certain mission-critical or especially sensitive systems to keep records on.

There are other considerations, for example, keystroke monitoring is a popular way to check-up on user activities, but there is a clear issue with personal privacy in this case. It’s up to the company’s discretion of how far to go with the audit.

Storage Practices

One decision security teams have to make is where and how to store audit logs. How long can you keep records to the point where the storage costs are manageable? Treat audit data like insurance; the longer you keep it around, the more it will protect you when you need it most.

And how do you protect the audit logs themselves from unauthorized access, as they too can contain sensitive or mission-critical business data? Setting access privileges is just as important for the audit logs themselves for this reason.

Quick and Easy Access

When should you access your audit logs? You should aim to check regularly to identify potential unauthorized activities before they become bigger problems. You should especially reference these logs immediately after an incident, such as after discovering signs of a data breach or unauthorized access by an unknown entity.

Start Getting Value With
Centraleyes for Free

See for yourself how the Centraleyes platform exceeds anything an old GRC
system does and eliminates the need for manual processes and spreadsheets
to give you immediate value and run a full risk assessment in less than 30 days

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