Cybersecurity risk is a business online threat that is increasing rapidly and imposing immense challenges to entities in the current business environment. Over the years, approaches of cybersecurity audit finance have been affecting every industry. This leads to the doubt of whether cybersecurity risk is valid and relevant to financial audits, or the extent of the auditor’s role to manage financial statements.
This reading highlights how cybersecurity risk and online threats can impact an entity’s financial statements, reporting and related audit. It also includes guidelines on how cyber security risk considerations can be helpful as part of risk assessment during internal audit planning.
Cybersecurity and The Role of Internal Audit
Internal audit plays an important role in assisting organizations in the ongoing battle of observing cyber threats, online attacks, both by offering an independent cybersecurity assessment of existing and required controls, and helping auditors and board to understand & address the adverse impact and risks of the digital world.
Cyber risk & Internal Audit
The cases of cyber attacks and threats have been increasing day by days, and it is significantly evolving. Many audit committees and organizations have set a benchmark and KPIs for internal audit to assess organizational capacities and objectives to manage the associated risks. Organizational experiences show that an effective first step for internal audit is to conduct and impose a cyber risk assessment, examine the findings, and prepare a concise summary report for stakeholders, audit committee and organizations to drive a risk-based, precise, multiyear cybersecurity internal audit plans.
Cybersecurity Assessment Framework
There are multiple factors those are noteworthy for internal audit professionals to consider and conduct a cybersecurity assessment and audit procedure:
1.Involve Staff, Stakeholders & Management with the Necessary Experience and Skills.
It is crucial to involve audit professionals with the appropriate skills, combined experience and knowledge of the current risk environment. So, a tech-oriented, skilled and verified professional versed in the cyber world can be an important resource.
2.Complete Cybersecurity Framework Evaluation:
Cyber security consultants help to observe organizational capabilities and set the cyber protocols and benchmarks to evaluate the complete requirements. This evaluation involves understanding the work status, current state against framework and objectives, where the organization is going and where they have to go, and the minimum expected cybersecurity practices within the organization and business sector.
3.In-Depth Assessment & Review:
Cybersecurity consultants have responsibilities to check further processes and do in-depth review. It is not intended to be an exhaustive analysis that requires extensive testing. Rather, the initial assessment should drive additional risk-based cybersecurity deep dive reviews. Organizational units and the information technology functions are integrated with cyber security management to maintain daily operations and decision making requirements. Cyber security consultants follow all required protocols and set benchmarks as technology and security auditing leaders.
Cyber security frameworks in financial assessment play an important role in the assessment and identification of opportunities and chances to strengthen entity security. At the same time, internal audit has a duty to inform the organization and check the key responsibility in place to work functions, legal and financial liabilities correctly.
In addition, it is necessary to notify that risk assessment continues throughout the engagement. Auditors need to follow each and every information to obtain risk assessment and evidence related to financial statements. When cyber incidents occur, auditors need to understand the nature, causes of businesses to determine whether audit procedures or alterations in audit approaches, & evaluate the impact and adverse situations to the financial statements. Where necessary, the auditor should also consider involving subject matter experts, so it is recommended to contact cybersecurity experts for further assistance.