What Are the PCI Audit Requirements?

If your organization is mandated to pass an on-site audit and submit a Report on Compliance under the Payment Card Industry Data Security Standard (PCI DSS), there are certain requirements to which you must adhere to be an approved scanning vendor. You must either:

Hire a Qualified Security Assessor certified by the PCI Security Standards Council (PCI DSS) to conduct an on-site audit of your information security controls, policies, and practices related to the Cardholder Data Environment (CDE), or
Sponsor your organization’s internal auditor for PCI SSC training and certification as an Internal Security Assessor so that person can perform the yearly PCI DSS audits.
Pass the audit so the QSA or ISA can submit a Report on Compliance (ROC) to your acquiring bank.
Maintain your PCI-compliant status until your next annual audit, performing vulnerability scans, controls testing, risk assessments, and penetration tests frequently to ensure that your systems and networks are keeping credit and debit card and cardholder information secure and private.

How often are PCI audits required?

PCI audits, which are associated with the Payment Card Industry Data Security Standard (PCI DSS), are typically required on an annual basis. However, the specific frequency and scope of audits can vary depending on several factors, including the merchant’s level of PCI compliance and the agreements with payment card brands (e.g., Visa, MasterCard, American Express, etc.).

Here are the general guidelines for the frequency of PCI audits:

Annual Self-Assessment Questionnaire (SAQ): Many smaller merchants, known as Level 4 merchants, are required to complete an annual self-assessment questionnaire (SAQ) to validate their PCI compliance. These self-assessments are typically completed annually.
Quarterly Network Scans: Some merchants, even if they complete the SAQ, may also need to conduct quarterly vulnerability scans on their network to check for security vulnerabilities. This requirement often applies to Level 4 merchants as well.
Annual On-Site Assessments: Larger merchants, such as Level 1 and Level 2 merchants (typically processing higher volumes of card transactions), are required to undergo an annual on-site assessment conducted by a qualified security assessor (QSA) or internal security assessor (ISA).
Continuous Monitoring: In addition to the annual assessments, continuous monitoring of security controls is essential to maintain PCI compliance throughout the year. This may involve regular security checks, ongoing vulnerability scanning, and logging and monitoring of security events.

It’s important to note that the specific requirements and validation methods can vary based on the payment card brands you work with, your organization’s size, and the payment processing methods you use. You should consult with your acquiring bank, the PCI Security Standards Council, and any contractual agreements with payment card brands to determine your specific compliance requirements.

What Happens If I Fail My PCI DSS Audit?

Non-compliance with PCI DSS can result in fines, loss of the ability to process credit card transactions, and reputational damage, so it’s important for organizations that handle payment card data to stay compliant and meet the required audit frequency. The specific actions and consequences may vary depending on the circumstances and the agreements you have in place with your acquiring bank and payment card brands. Here are some potential outcomes of failing a PCI DSS audit:

Fines and Penalties: Payment card brands and acquiring banks may impose fines and penalties on your organization for failing to meet PCI compliance requirements. These fines can be substantial and vary depending on the severity of non-compliance and the number of cardholder data breaches.
Loss of Card Processing Privileges: Failing to comply with PCI DSS may result in the suspension or revocation of your organization’s ability to process credit and debit card transactions. This can disrupt your business operations and revenue stream.
Increased Security Oversight: Payment card brands or acquiring banks may subject your organization to increased scrutiny, including more frequent audits, assessments, and monitoring, which can be costly and time-consuming.
Reputation Damage: Non-compliance with PCI DSS can lead to reputational damage. Customers, partners, and stakeholders may lose trust in your organization’s ability to protect their sensitive payment card information, potentially leading to a loss of business.
Legal Consequences: In cases of data breaches resulting from non-compliance, you may face legal action, including potential lawsuits from affected individuals or regulatory authorities. Legal expenses and fines can be substantial.
Costs of Remediation: After failing an audit, your organization will likely need to invest in remediation efforts to address the identified issues and achieve compliance. These costs can include technology upgrades, security enhancements, and consulting services.

To avoid these consequences, it’s essential to take PCI DSS compliance seriously and address any issues promptly. If you fail an audit, you should work closely with your acquiring bank, payment card brands, and qualified security assessors (QSAs) to create a remediation plan, correct the identified vulnerabilities, and demonstrate your commitment to achieving and maintaining compliance.

Remember that maintaining PCI DSS compliance is an ongoing process. You must regularly meet or exceed the PCI standards. Regular assessments, cybersecurity monitoring, and compliance efforts are crucial to protect your organization and safeguard the sensitive payment card data you handle.

Who Must Obtain a PCI DSS Audit

All merchants and service providers that accept, process, store, or transmit sensitive data such as credit card or debit card data must comply with PCI DSS requirements, an information security framework with 12 requirements and 281 directives.

Only merchants processing more than 1 million or 6 million payment card transactions per year (depending on which card brands you accept) and service providers processing, storing, or transmitting more than 300,000 card transactions per year are required to undergo the PCI compliance audit and continuously recertify compliance.

For smaller merchants, completing a self-assessment questionnaire (SAQ) and submitting an Attestation of Compliance (AOC) will usually suffice in lieu of the PCI DSS assessment.

However, all merchants and service providers that have experienced data breaches that compromised payment card data must also pass a yearly on-site audit for PCI compliance.

Does My Company Have to Pass a PCI Audit to Prove PCI Compliance?

While passing a Payment Card Industry Data Security Standard (PCI DSS) audit is a common method to demonstrate PCI compliance, it’s not the only way to do so. The PCI DSS provides various validation methods and requirements, and the specific method your company must follow depends on your organization’s size, the number of transactions you process, and the payment card brands you work with.

Here are different ways to demonstrate PCI compliance:

Self-Assessment Questionnaire (SAQ): Many smaller merchants, particularly Level 4 merchants (those processing fewer transactions), can demonstrate compliance by completing an annual SAQ. The SAQ is a self-assessment questionnaire that helps you assess your compliance with PCI DSS requirements. However, passing a PCI audit is not explicitly required for Level 4 merchants.
Quarterly Network Scans: Some merchants are required to conduct quarterly vulnerability scans on their network, in addition to completing an SAQ, as part of their compliance validation. This is often a requirement for Level 4 merchants as well.
On-Site Assessments: Larger merchants, typically Level 1 and Level 2 merchants (processing higher volumes of card transactions), are required to undergo an annual on-site assessment conducted by a qualified security assessor (QSA) or internal security assessor (ISA). In this case, passing an audit is a standard method for demonstrating compliance.
Point-to-Point Encryption (P2PE): Implementing PCI-validated point-to-point encryption (P2PE) solutions can significantly reduce the scope of PCI DSS compliance requirements. If you use P2PE, you may have fewer compliance obligations and could have a simplified compliance process.
Tokenization: Using tokenization to replace sensitive payment card data with tokens can also reduce the scope of PCI DSS requirements. Tokenization solutions are often assessed and validated by the PCI Security Standards Council.

It’s important to determine which validation method is appropriate for your organization based on your specific circumstances, and this may involve discussions with your acquiring bank, the payment card brands you work with, and compliance experts. Regardless of the validation method, you are responsible for maintaining ongoing compliance with PCI DSS requirements, which means continuously monitoring and securing your payment card data environment.

Passing a PCI audit is one way to prove compliance, but it’s not the only way, and the most suitable method for your organization will depend on various factors, including your business size and operations.

How to Prepare Your Business for PCI DSS Audit

The PCI DSS is a comprehensive set of security requirements that organizations handling payment card data must adhere to. To help you successfully navigate the audit process and demonstrate your compliance, consider the following key steps.

Understand the PCI DSS Requirements: Start by thoroughly familiarizing yourself with the PCI DSS requirements. There are 12 core requirements, each with a set of sub-requirements, covering aspects of network security, data protection, access control, and more. A clear understanding of these requirements is fundamental to your preparation.
Identify Your Scope: Determine the scope of your cardholder data environment (CDE). This step is critical for streamlining your compliance efforts. Identifying what systems, processes, and people interact with cardholder data helps you focus your security measures where they matter most.
Appoint a Compliance Officer: Designate a PCI compliance officer or team responsible for overseeing the compliance process. This individual or team will play a pivotal role in coordinating compliance efforts, conducting risk assessments, and managing the audit process.
Conduct a Gap Analysis: Perform a thorough gap analysis to identify areas where your current security practices may not align with the PCI DSS requirements. This analysis will help you prioritize remediation efforts and allocate resources effectively.
Implement Security Measures: Take proactive steps to address the gaps identified in your analysis. This may involve enhancing network security, encryption, access controls, and security policies to align with PCI DSS requirements.
Document Policies and Procedures: Document your security policies and procedures, ensuring that they are comprehensive and up-to-date. This documentation is a key aspect of compliance and will be reviewed during the audit.
Regularly Monitor and Test: Establish ongoing monitoring and testing procedures to continuously assess and validate your compliance. Regularly scan your network for vulnerabilities, conduct penetration testing, and keep an eye on security events.
Engage Qualified Assessors: Depending on your merchant level, engage with qualified security assessors (QSAs) or internal security assessors (ISAs) for on-site assessments, if required. These experts will evaluate your compliance and provide valuable insights.
Employee Training: Ensure that your employees are well-informed about security best practices and their roles in maintaining compliance. Training and awareness programs can help prevent security lapses.
Prepare for the Audit: As the audit date approaches, review your documentation, gather evidence of compliance, and be ready to demonstrate your security measures and practices to the assessors. Effective preparation is key to a successful audit outcome.

How To Pass the Audit With Ease

To make obtaining the ROC as smooth and worry-free as possible, follow these steps pre-audit to avoid non-compliance:

Complete the self-assessment questionnaire relevant to your business and remedy any compliance gaps you find.
Use firewalls to segment your CDE from the rest of your system to narrow the scope of the auditor’s examination.
Test the controls relevant to your CDE, even if you have already done so. Evidence that they are working as they should be current.
Have your security policy, IT architecture diagrams, CDE card-data flow charts, and other relevant documents on hand for the auditor.
Use a quality PSS DSI compliance software to assess your compliance, track compliance efforts, monitor your systems and service providers, collect and store all your compliance documentation, and more.

How ZenGRC Can Help You Become PCI Compliance

ZenGRC provides valuable support for organizations striving to attain and maintain Payment Card Industry Data Security Standard (PCI DSS) compliance. Its centralized data repository streamlines the organization and retrieval of critical compliance-related information, ensuring that policies, procedures, and evidence are readily accessible for audits and assessments. ZenGRC’s document management features help maintain an up-to-date record of security documentation, a fundamental requirement for PCI DSS compliance. The platform’s task and workflow management capabilities aid in assigning responsibilities, ensuring that compliance-related tasks are completed on time. Additionally, ZenGRC facilitates risk assessment and management, essential for identifying vulnerabilities and meeting PCI DSS requirements. Finally, automated reporting simplifies the reporting process, allowing organizations to generate customized reports and dashboards to track compliance status and communicate this information efficiently with relevant stakeholders. ZenGRC thus serves as a valuable tool for organizations seeking to navigate the complexities of PCI compliance successfully.