Compliance audit: What it is and how to prepare for one

You might have come across the term “compliance audit,” an independent review assessing if an organization aligns with regulatory requirements. As a business owner, you likely recognize its significance. However, there’s more to learn about compliance audits, particularly how to ensure a successful one.

Don’t know how to prepare for a compliance audit for your business in Utah? Don’t worry — this article will serve as your guide.

What is a compliance audit?

A compliance audit involves a comprehensive review of an organization’s compliance with industry-specific regulations, standards, or policies. The audit’s primary purpose is to ensure that the organization is complying with all applicable laws, regulations, and internal guidelines to minimize the risk of legal issues, penalties, and operational inefficiencies.

During a compliance audit, it is crucial to identify areas of noncompliance and provide recommendations to rectify identified gaps. The audit can encompass various aspects, including financial practices, regulatory requirements, ethical conduct, and adherence to established processes.

It’s also worth noting that there’s a key difference between a compliance audit and an internal audit. The latter primarily entails examining internal processes, controls, and financial reporting to enhance operational efficiency, risk management, and internal policies.

What are the types of compliance audits?

Compliance audits can take various forms based on the focus and purpose:

Financial compliance audit: This audit ensures that an organization’s financial transactions and reporting align with financial standards and regulations. Businesses in Utah, for example, must comply with the rules set forth by agencies, such as the Utah Department of Commerce and the Utah Division of Consumer Protection, as well as the Securities and Exchange Commission.
Operational compliance audit: This audit assesses a company’s operations, including its information security practices, environmental compliance practices, and human resources practices.
IT compliance audit: This audit assesses a company’s IT systems and infrastructure to ensure that they are secure and compliant. This may include an evaluation of a company’s data security, network security, and software licensing practices.
Industry-specific compliance audit: This audit focuses on evaluating adherence to specific laws and regulations relevant to the industry in which the organization operates.

Tips and recommendations for a successful compliance audit

Here are key steps to ensure a successful compliance audit.

1. Understand the audit scope and objectives

Understanding the scope and objectives of the audit will help you identify the areas that need to be reviewed and the documentation that needs to be prepared. You can usually get this information from the auditor or the regulatory body that is conducting the audit.

2. Gather all relevant documentation

Once you understand the scope and objectives of the audit, you need to gather all relevant documentation. This may include financial records, policies and procedures, training records, and other evidence of compliance. It is important to have all of this documentation organized and easily accessible.

3. Assign roles and responsibilities

If you have a small team, it’s important to assign roles and responsibilities for the audit. This will help ensure that all tasks are completed efficiently and effectively. It’s also vital to assign a contact person who will be responsible for communicating with the auditor.

4. Conduct a self-assessment

Before the audit begins, it’s a good idea to conduct a self-assessment to identify any areas of potential noncompliance. This way, you’ll be able to focus your efforts on correcting any problems before the auditor arrives.

5. Be prepared to answer questions

The auditor will likely ask you questions about your compliance program and your business practices, so answer these questions honestly and accurately. If you are unsure of the answer to a question, do not be afraid to say so.

6. Be cooperative and responsive

The auditor is there to help you ensure that you are in compliance with all relevant regulations, so it pays to be cooperative and responsive to their requests. This will help to make the audit process as smooth and efficient as possible.

If you are unsure of how to prepare for a compliance audit, consult NetWize’s compliance experts. We can help you develop a compliance program, identify and address any areas of noncompliance, and prepare for the audit. Leave us a message.

Why small- and medium-sized businesses need cyber insurance now more than ever

Cyberattacks are becoming increasingly common and sophisticated, and small- and medium-sized businesses (SMBs) are particularly vulnerable to them. And many cyber scams are much closer to home than you think. In September 2022, Eagle Mountain, a city in Utah, lost nearly $1.13 million in a cyber scam, where the perpetrators posed as a vendor representative collaborating with the city on a major infrastructure project.

This incident is just one example of the many ways cybercriminals can wreak havoc on organizations. That’s why it’s more important than ever for SMBs to have cyber insurance.

What is cyber insurance?

Think of cyber insurance as your business’s safety net in the digital world. It is designed to mitigate the damages resulting from cybersecurity incidents, such as data beaches, hacking attacks, ransomware, and phishing scams. Cyber insurance typically covers financial losses, legal fees, public relations efforts, and more.

Why are SMBs particularly vulnerable to cyberthreats?

SMBs are particularly attractive targets for cyberattacks due to these reasons:

Limited resources and expertise

SMBs often lack the resources and expertise required to deploy robust cybersecurity measures. This makes them more vulnerable to cyberattacks, as they may not have dedicated IT staff or comprehensive cybersecurity strategies in place.

Data sensitivity

Despite their size, SMBs handle sensitive data, such as customer information, payment details, and proprietary business data. Cybercriminals are well aware of this and exploit the vulnerabilities in their systems to gain unauthorized access to this valuable information.

Lack of awareness

Many SMBs underestimate the potential threat of cyberattacks. They may not fully comprehend the damage a single incident can inflict on their business, including reputational harm, loss of customers, and substantial financial losses.

Interconnectedness

Many SMBs nowadays rely on digital platforms and online transactions. While this enhances efficiency, it also exposes them to a wider array of cyberthreats.

Supply chain vulnerabilities

SMBs are often part of larger supply chains, and cybercriminals target them as entry points to infiltrate larger enterprises. This can lead to devastating consequences for both the targeted SMB and the broader business ecosystem.

How can a cyber insurance policy help your SMB?

Here are some of the ways that having a cyber insurance policy in place can help your SMB:

Financial protection

In the event of a data breach, a cyber insurance policy offers financial security, as it will cover various costs, including but not limited to:

Cost of investigation and forensics – determining the cause and extent of the breach
Notification costs – informing affected parties, which often comes with legal requirements and expenses
Legal and regulatory fees – legal assistance to navigate regulatory compliance and potential fines
Business interruption costs – compensating for the income lost during downtime caused by the cybersecurity incident
Recovery and restoration expenses – costs associated with restoring systems, data, and networks

Incident response support

Cyber insurance policies often provide access to experienced professionals and specialized vendors who can guide you through the incident response process. This can include IT forensics, crisis communication, and legal support to help minimize damage and facilitate swift recovery.

Reputation management

A cyber incident can tarnish your SMB’s reputation. Cyber insurance can cover the costs of hiring public relations experts to help manage your brand image and rebuild trust with customers, partners, and stakeholders.

Legal liability coverage

Cyber insurance can protect you from legal claims and lawsuits resulting from an incident. This includes claims related to data privacy breaches, intellectual property theft, defamation, and more.

Data restoration and recovery

If your business experiences data loss due to a cyber event, cyber insurance can cover the costs associated with data recovery and restoration, ensuring minimal disruption to your operations.

Business continuity support

Cyber insurance can help your SMB with funds and resources to maintain business operations during and after a cyber incident. This support can be crucial in keeping your business afloat during challenging times.

Customization for your business needs

Cyber insurance policies can be customized to meet your unique business needs and industry regulations. This ensures that you are covered for the risks and cyberthreats your business is most likely to face.

Investing in cyber insurance is a proactive step toward ensuring the longevity and sustainability of your Utah business in an increasingly digital world. Got more questions about cyber insurance or just want to talk cybersecurity? Request a free consultation from NetWize’s experts today.

Which of your employees are most at risk of cyberattacks?

In today’s digital age, cyberattacks are a constant threat to businesses of all sizes and industries. While cybercriminals target entire systems and specific individuals alike, some employees or roles within an organization may be more vulnerable to cyberattacks than others. This susceptibility can be due to a variety of factors, such as users’ access to sensitive information, lack of cybersecurity training, or the nature of work.

In this article, we’ll explore the types of employees or roles that are highly susceptible to cyberattacks and the steps your organization can take to mitigate the risks associated with these vulnerabilities.

C-suite executives

C-suite executives and their assistants are often targeted by cybercriminals because of their high profile and the perceived value of the knowledge they possess. As top-level decision-makers, C-suite executives have access to highly sensitive and valuable information, including financial data, trade secrets, and strategic plans. Their assistants, who often manage their schedules and communication channels, may also have access to confidential information and important contacts.

As such, these groups of people may be targeted with phishing emails, social engineering tactics, or other sophisticated attacks designed to compromise their devices and steal sensitive data.

New employees

New employees or interns in a company can be particularly vulnerable to cyberattacks for several reasons. Firstly, they may not be familiar with the company’s cybersecurity policies and procedures, which makes them more likely to make mistakes or fall prey to social engineering tactics that cybercriminals use.

Also, new employees and interns may be eager to impress and gain the trust of their colleagues, which can lead them to take risks or ignore warning signs that a message or email is suspicious. This eagerness to prove themselves may also make them more likely to bypass security measures, such as password policies or firewalls, to access sensitive information that they’re not supposed to access.

Finance and accounting departments

The finance and accounting departments of most organizations are prime targets for cybercriminals because they handle a variety of financial information: payment data, bank account details, and financial records. They also often process large amounts of transactions, which compels cybercriminals to exploit vulnerabilities in payment systems.

These departments may also use outdated software or hardware that were not designed with modern cybersecurity risks in mind, making them vulnerable to cybercrime. What’s more, financial processes require a high degree of human involvement and difficulty, thus making them more prone to errors — and human error remains the major cause of most cyber incidents. According to Verizon’s 2022 Data Breach Investigations Report, phishing scams, business email compromise attempts, and stolen credentials are behind more than 80% of security breaches reported.

IT staff

IT personnel are responsible for maintaining the security of the company’s digital infrastructure, which makes them the perfect prey for cybercriminals seeking to gain unauthorized access to sensitive data or systems. They also have administrative privileges that allow them to change network configurations or access confidential information, making them valuable targets for cyberattacks.

How can you keep vulnerable employees secure?

Here are some ways for each of the mentioned groups to toughen their defenses against cyberattacks:

C-suite executives and their assistants:

Conduct regular security awareness training for all employees, including C-suite executives and their assistants, to educate them on the latest cyberthreats and how to avoid them.
Limit the amount of sensitive information shared over email and other communication channels, and use secure file-sharing platforms when necessary.
Implement access controls to limit the amount of sensitive information that C-suite executives and their assistants can access, and monitor their activities closely to detect and respond to potential security breaches.

New employees:

Provide cybersecurity training for new employees and interns as part of their onboarding process.
Restrict their access to sensitive information and ensure that your company has robust access controls in place.
Strictly enforce using proper communication channels, such as company email or secure messaging apps, for work-related communication.

Finance and accounting departments:

Regularly update financial systems and software applications to ensure that they are patched against known vulnerabilities.
Use encryption and secure file sharing platforms to protect sensitive financial data in transit and at rest.
Implement multifactor authentication for all financial transactions.

IT staff:

Use strong encryption to safeguard data in transit and at rest.
Update software and firmware regularly to protect all systems and devices from known vulnerabilities.
Use intrusion detection and prevention systems to detect and respond to potential security breaches in real time.

Consult NetWize’s team to learn how you can increase your organization’s protection against online threats. Request a free consultation today.

7 Cloud security best practices to protect your data

If you’re one of many organizations that have fully adopted cloud computing, your need to implement strong cloud security measures has become more critical than ever. Cloud security ensures that data and applications hosted in the cloud are protected from cyberthreats. And the potential risks associated with using cloud services are simply too great and wide-ranging to ignore. According to IBM’s Cost of a Data Breach Report 2022, 45% of breaches are cloud-based.

As you store more sensitive information in the cloud, your risk of data loss or exposure increases, which is why it’s essential to understand the best measures and strategies to safeguard data in the cloud.

How can you protect against cloud security threats?

The goal of most cyberattacks today is to disrupt the normal flow of activities and operations in your system. To prevent these threats from compromising your environment, you need to implement the following security measures:

1. Develop a backup and disaster recovery strategy

A backup and disaster recovery (BDR) strategy is a crucial element of cloud security, as it provides the necessary protection against unexpected outages or other disasters that can cause costly downtime and data loss. Without a BDR plan in place, your organization is at risk of losing all of your data in the cloud, which could have a severe financial impact. Your BDR strategy should be well documented and regularly tested to ensure that it won’t fail in case of an actual disaster.

2. Implement strong authentication methods

Implementing two-factor authentication (2FA) or multifactor authentication (MFA) can help ensure that only authorized users are able to access sensitive data and applications in your cloud services and applications. 2FA and MFA add an additional layer of protection for your cloud environment, helping to prevent malicious actors from infiltrating accounts and systems.

3. Leverage encryption technologies

Encryption protects data stored in the cloud by making it unreadable and inaccessible without the necessary keys or passwords. As such, it’s an essential component of any cloud security strategy, keeping malicious actors from gaining unauthorized access to sensitive information.

Cloud encryption can be used in a variety of ways, including in transit (during data transfer) and at rest (while the data is stored). Your organization should also consider using key management solutions to ensure that encryption keys are properly managed and stored securely.

4. Enforce access controls

Role-based access control (RBAC) is a security mechanism that restricts access to data or applications based on a user’s role or job function within an organization. By doing so, RBAC helps prevent data breaches and insider threats. It also helps to simplify the management of access control by providing a centralized system for assigning and revoking access rights to certain resources.

5. Revisit and update cloud security policies

Cloud security policies should be regularly reviewed and updated to ensure that they reflect the current state of a company’s IT environment. It also pays to implement automated tools for monitoring policy compliance and alerting teams when changes are needed. This is one way to guarantee that cloud security policies remain effective and in line with best practices.

6. Monitor user activity for suspicious behavior

Monitoring user activity for suspicious behavior allows organizations to identify and address potential threats and malicious actors before they can cause significant damage.

7. Deploy endpoint security solutions

Endpoint security solutions offer advanced protection against hackers, malware, ransomware, and other malicious threats that target your systems. They provide an extra layer of defense by creating a secure perimeter around endpoints, such as PCs and mobile devices.

By following these steps, you can protect your data and applications from various cyberthreats while ensuring a secure cloud environment. Consult NetWize’s team of cybersecurity professionals on how to fortify your cloud environment. Get in touch with us today.