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In the age of digital business, protecting your organization’s digital assets from cyber threats and reducing your cyber risk exposure has never been more critical – or more complicated. At the same time, most organizations must comply with numerous industry and government regulations that dictate data privacy and IT security standards.

To manage cybersecurity threats and meet regulatory compliance obligations, your organization will need a cyber risk management program that can fulfill both objectives.

Many organizations, however, don’t know where to begin.

Fortunately, several frameworks exist that can provide guidance. Indeed, many widely used frameworks today were first developed simply as a collection of best practices to help organizations navigate the often complicated risk management process. Those best practices were then organized and codified into frameworks that can help with security and compliance risks.

Some of the most common compliance frameworks include PCI DSS, which protects customers’ card payment details; COSO’s internal control framework, which safeguards financial information; and HIPAA, which protects patients’ healthcare data.

Even if your organization doesn’t need to meet compliance standards, you can still use these frameworks to compare the maturity of your risk management program against industry best practices and standards.

It’s also important to note that being in regulatory compliance does not always mean being secure. On its own, compliance is not enough to protect organizations from potentially devastating cybersecurity risks. Instead, you need a holistic, risk-based approach that makes room for all types of risk, compliance or otherwise.

This article will examine the cyber risk management process and how it can help define your risk posture. Then we’ll discuss how risk posture and compliance can come together to create a more holistic risk management program centered around security.

What Are The Different Types of Risks?

Risk is the possibility of losing, damaging, or destroying assets or information due to a cyber attack. A threat is an activity that increases the probability of a bad outcome, such as exploiting a vulnerability. The four major categories of risk are as follows:

• Strategic risk, such as a new competitor entering the market
• Compliance and regulatory risks, such as the implementation of new regulations or laws
• Financial risks, such as an increase in interest rates on your business loan or a client failing to pay its bills
• Operational risks, such as essential equipment failure or theft

These risk categories are not comprehensive, and specific threats to your business may fall into more than one.

What Are The Top Security Risks?

The Allianz Risk Barometer describes the top security risks to global business as follows:

• Cyber incidents
• Business disruption
• Changes in legislation and regulation
• Natural disasters
• Market fluctuations
• Climate change
• Reputation/brand worth deterioration
• AI and other emerging technologies

What Is The Difference Between a “Risk” and a “Threat”?

The terms “threat” and “risk” are used interchangeably to describe the landscape of possible dangers to the company, but they do represent different ideas. Risk is the possibility of losing, damaging, or destroying assets or information due to a cyber attack. A threat is an activity that increases the probability of a bad outcome, such as exploiting a vulnerability.

What Is Risk Posture?

Risk posture refers to the status of your overall cybersecurity program. It includes the comprehensive management and strategy for protecting your organization’s software and hardware, network services, and information from cyber risks.

Why Is Risk Posture Important?

Defining your organization’s risk posture helps executives to understand the threats to achieving your business objectives. That understanding can then sharpen your organization’s decisions about allocating resources to protect the organization from the risks with the highest probability and impact.

Risk Posture vs. Security Posture

Although often confused, risk posture and security posture are different.

An organization’s security posture refers to the overall status of its cybersecurity readiness. It encompasses information security, data security, network security, penetration testing, security awareness training, third-party vendor risk management, incident response plan, vulnerability management, data breach prevention, and other security tools and controls.

Your risk posture has more to do with the approach you take to manage the risks associated with those threats. Moreover, security posture and risk posture often have an inverse relationship with cybersecurity risk: as those postures improve, cyber risk will decrease.

Security posture and risk posture both flow from the risk assessment process. A risk assessment will help your organization fully understand its assets, their value, and the infrastructure to protect them.

Later in this article we’ll talk more extensively about risk assessments and how they can help your organization become more secure and prevent cybercriminals from disrupting your business. First we need to take a closer look at risk posture and some other risk-related factors that influence it.

What Factors Influence Risk Posture?

Risk Appetite

Risk appetite is the amount of risk your organization is willing to take to achieve its objectives. Ideally, your organization will seek to reduce risks and minimize their potential harm wherever possible, but all businesses will need to accept at least some risks to drive positive performance. Risk appetite is the amount of risk you’re willing to take to pursue business goals.

Your risk appetite will be unique to your organization, but some of it is guided by the regulatory requirements mentioned above. For the most successful risk appetite, your organization must adopt a single risk measurement and scoring methodology, plus a common risk language that can be applied consistently and understood throughout your entire organization.

Risk Tolerance

Risk tolerance is the range of performance you’re willing to accept in pursuing specific business goals. One could define risk tolerance as “acceptable variation from a performance goal.” (That is how COSO defines risk tolerance in its enterprise risk management framework.) So if risk tolerance measures how much loss you’re willing to accept for specific goals, you might ask: “How much risk of a breach via a third party are we willing to accept? Should we spend more money controlling our third parties tightly or save money and trust that their security self-assessments are valid?

Your organization’s risk appetite and tolerance define your risk posture or overarching risk management approach. A strong risk posture will help your organization take more significant risks within the constraints of your strategic and operating objectives.

Compliance

The average data breach cost reached new heights at $4.24 million in 2021, and when the breach included a compliance failure as well, the costs were even higher. Organizations that suffered high-level compliance failures that resulted in fines, penalties, and lawsuits experienced an average cost of $5.6 million per breach.

As we mentioned above, compliance alone is not enough to inform the entirety of your risk management program, and therefore your risk posture. Still, you must consider it essential when planning your organization’s overall cybersecurity.

How Does Compliance Influence Risk Posture?

If your organization complies with all necessary frameworks, it is inevitably more secure than it might otherwise be – but that comfort will only go so far. Compliance risk is still only one security risk among many, and all the others can also threaten your risk posture.

The trap here is that while compliance should be the top concern for IT security and risk management, too many organizations leave it as the only concern. Instead, they take a compliance-driven, check-the-box mentality to cybersecurity: “We’re in compliance with all rules, so we needn’t do anything more.”

That’s wrong. A compliance-driven approach can help achieve point-in-time compliance certifications, but it can often impede a more continuous approach to measuring risk posture in real time.

A more holistic approach to risk management will be informed by the compliance requirements set forth by governing bodies, but is not limited to those requirements. Ultimately, to gain insight into the strength of your organization’s risk posture, you’ll need to go beyond assessing compliance and take threats, vulnerabilities, and risks into account throughout the risk management process.

How Can a Company Mitigate Security Risks?

Given the ever-changing threat landscape, here are some measures you should include in any security risk mitigation strategy to maintain your business safe:

• Conduct a Risk Assessment for Cybersecurity

  Conduct a cybersecurity risk assessment to identify the dangers your company faces, the likelihood of their occurrence, and the harm they can inflict. The risk assessment findings will indicate your organization’s readiness to respond to security events. In addition, they will reveal weaknesses in your infrastructure to common threats such as phishing, malware, brute-force attacks, and ransomware.

• Create an Incident Response Plan

  An incident response plan is a written collection of tools and instructions designed to assist your team in promptly identifying, dealing with, and recovering from cybersecurity attacks. If a security breach happens, a good incident response plan assures that you have the appropriate people, procedures, and technology to handle the problem and minimize damage. An incident response plan is notably beneficial for preventing data breaches, ransomware, denial-of-service attacks, malware, and other assaults aimed at disrupting the operation of a system.

• Train Your Team

  Regular training is the most effective technique for lowering your team’s chance of becoming a security risk. This training should involve all team members (not just your cybersecurity or IT employees) because any of them could become a vulnerability in your processes. Furthermore, when employees are adequately trained, you may avoid security vulnerabilities caused by social engineering attacks such as phishing.

• Monitor and Protect Your Network Traffic

  Poor network security can cause various nightmare scenarios. Hence, mitigating security risks in your network should include monitoring network traffic for intrusion attempts. Because rogue employees within your network may leak sensitive information, this monitoring applies to inbound and outbound traffic. With adequately set firewalls and threat intelligence systems, you can detect and block malware, denial-of-service attacks, botnets, and man-in-the-middle attacks before they cause any harm.

• Encrypt and Backup Your Data

  Backups are critical for assuring business continuity in the event of a disaster. Encryption adds another layer of security to your backups, limiting unauthorized access to your essential data. Using these cybersecurity risk mitigation strategies, you may avoid data loss due to ransomware attacks, data breaches, or human error.

• Monitor Your Vendors

  Your company most likely outsources some of its activities to third-party contractors. As a result, these companies’ security postures may affect your company’s cybersecurity readiness, mainly if their services are critical to your operations. Third-party vulnerabilities are routinely used by hackers that target popular software systems.

• Be Compliant with Industry Regulations

  Regulatory authorities across a wide range of sectors realize cybersecurity’s essential function in allowing businesses to thrive in today’s climate. As a result, its stakeholders must closely follow information security rules. The Payment Card Industry Data Security Standard (PCI DSS) is an excellent example since it includes cybersecurity risk mitigation measures to prevent credit card fraud and unauthorized access to sensitive data.

How to Strengthen Risk Posture

Without a strong risk posture, you inevitably expose your organization to several risks that might be otherwise avoidable. In addition, the modern attack surface is massive, which makes the task of bringing it into focus all the more critical. For the most robust risk posture, we recommend the following best practices:

• Examine Existing Frameworks

  While the entirety of your risk management program should not be informed by compliance alone, it’s still an essential factor to consider. Whether compliance is a requirement or not, most organizations begin their journey toward better risk management by examining some of the existing compliance frameworks to inform their policies and procedures.

  Whether PCI DSS, HIPAA, NIST, COSO, ISO, or any other compliance framework, simply using an existing standard as the basis for your risk management program can go a long way toward more robust and well-defined processes.

  You’ll need to conduct an audit to determine whether your organization meets those requirements. An internal audit can help you prepare for an external audit by a governing body so that you’re not surprised by the results – but an audit can also help you determine whether your risk management program is working correctly.

• Practice Thorough Risk Management

  You can create all the policies and procedures you want using any number of compliance frameworks as a starting point. Until you put these practices into place, however, they probably won’t do much good.

  Start by creating a list of all your assets to set yourself up for success. While it might sound self-explanatory, organizations often struggle to define what they’re trying to protect. Typically this list will include your systems, applications, devices, data, business processes, and users.

  Next, you’ll need to conduct a risk assessment to identify and prioritize the risks to those assets. A thorough risk assessment also involves a certain degree of vulnerability management. This means monitoring your assets for vulnerabilities, including the likelihood of an attack and the harm it might cause.

  Once you’ve completed a risk assessment, you’ll need to document the results. This includes taking note of existing security controls (such as firewalls) that reduce risk to your assets and mitigation strategies for any risks without controls. A thorough risk assessment will help you determine your risk appetite and tolerance and ultimately inform your risk and security posture.

  After you’ve collected all this information, you need to turn it into actionable content for the decision-makers, ultimately deciding what to do about risks. This is where the management portion of risk management is most important; all the information you derive from the risk assessment process is meaningless unless you can apply it to your organization in a tangible way.

• Regularly Audit and Continuously Monitor

  As mentioned above, auditing your organization to make sure that it’s meeting compliance requirements can go a long way toward a more holistic approach to risk management. But a single audit at a certain point in time isn’t enough to determine whether your organization is secure or not.

  Ultimately, your organization will need to continuously monitor its compliance and risk posture and attack surface to protect itself from the ever-evolving threat landscape. This means finding ways to stay informed about any threats, vulnerabilities, and risks your organization faces daily.

If this sounds overwhelming, you’re not alone. Fortunately, there are automation solutions that can help.

Manage Compliance and Improve Risk Posture with ZenGRC

If your organization struggles with risk management, the right tools and compliance software can make all the difference.

The ZenGRC, which underpins Reciprocity ZenRisk and Reciprocity ZenComply, gives you the power to be more strategic with IT risk management by putting your business activities front and center. Discover a modern way to manage your risk posture with ZenGRC, allowing you to understand and act on your IT and cyber risks, all in a unified platform.

With an incredibly intuitive user experience paired with in-application expert guidance, you can assess, manage, and communicate risks and their potential business impact. Using AI, the relationships between assets, controls, and risks are automatically created, alerting you to changes in your risk posture and making it simple to grow and manage your risk programs.

With dashboards and reports that provide contextual insights, it’s easier to communicate with key stakeholders and make informed business decisions with ZenGRC.

Become more strategic with your IT risk management and talk to an expert today to learn more about how the Reciprocity Product Suite can help your organization confidently manage risks and compliance.

Whatever industry you work in or however large your business is, one thing is true: every company with a desire to stay competitive and relevant needs a cybersecurity risk management plan.

New information technology comes online quickly, making business transactions and processes more manageable, smoother, and faster – but a high level of interconnectivity brings along an increased risk of cyber attacks and data breaches. Cybercriminals pounce on each new platform, and the threat landscape constantly changes.

A solid cybersecurity risk assessment program is as flexible and responsive as the changing risk landscape, so you are always ready no matter which cybersecurity incident pops up. Let’s look at how you develop a successful cybersecurity risk management plan.

A Cyber Risk or a Cyber Threat: Isn’t It All the Same?

Not quite. A cyber threat is an attack on your computer or vendor’s computer system. The threat landscape changes daily, and an essential part of your risk management strategy is to stay aware of new threats and the potential harm an attack could have on your business.

Cybersecurity risk, in contrast, is the worst-case harm a successful cyber attack (such as data breach or a phishing attack) would have on your business; combined with the likelihood of such an attack.

What are the Benefits of Risk Management in Cybersecurity?

A robust cyber security risk management program allows businesses to assess their security posture and identify areas for improvement. With technology increasingly crucial in today’s workplace, every organization must minimize the disruption caused by attacks.

Keeping up with the best practices for cyber risk management and the newest cybersecurity challenges allows organizations to be active and avoid becoming the next victim of cybercrime. Here are some benefits that a cybersecurity risk management program can bring.

Safeguard Business Reputation

A significant data breach can devastate your company’s brand, making it tough to rebuild consumers’ faith in you. After all, who would want to trust a business that couldn’t secure its data? A solid cybersecurity risk management program can assist you in prioritizing essential risks and remaining one step ahead of these threats. You can continue to create and maintain trust with your consumers this way.

Boost IT Support

When you have a comprehensive risk management strategy, your IT team will not lurch from one crisis to another since there will be enough workers and resources to keep all projects on track. That allows teams to address cyber concerns more efficiently and improves your company’s bottom line.

Prevent Revenue Loss

Data breaches can harm every aspect of your business. The most significant visible consequence, however, is financial. Studies peg the global average data breach cost at $3.86 million, and recovery from the original assault might take years. Moreover, corporations in charge of someone else’s data are subject to data privacy rules. As a result, businesses that have violated the law may be held accountable and face substantial fines or penalties.

Reduce Downtime

Downtimes are excruciating. Whether it’s ransomware, DDoS assaults, or phishing schemes, any attack can cause hours of disruption for your organization. Downtime following an attack can impair client access to vital services and leave staff unable to be productive. Delays in one area of a company can also cause issues in another, such as workflow backup, productivity loss, and a lack of internal and external communication.

On the other hand, a risk management strategy may help you better prepare for any cyber attack, limit downtime risks, and reduce the related high costs.

Increase Employee Engagement and Education

Employees can also benefit from a risk management plan, in addition to shareholders and consumers. For example, employee information is vulnerable to a breach since it includes Social Security numbers, credit card information, birth dates, phone numbers, and other personal information. Organizations with an effective risk management plan can assure employees that their data is always protected from improper access. This results in more engaged employees, which then results in improved business efficiency.

What Is a Cyber Security Risk Management Plan?

Cybersecurity risk management is a strategic approach to prioritizing threats. Organizations use cyber risk management processes to assure that the most severe threats are dealt with quickly.

Before developing a risk management plan, you need to define the level of risk with which you are comfortable. In cybersecurity, this begins by evaluating how your IT systems are connected to third-party vendors, and which contractors have access to your critical infrastructure. Then look at your security controls to protect sensitive data and proprietary information, even amid that complicated IT environment.

You don’t have to start from scratch to develop a methodology that will help you find the weak spots in your IT systems. The National Institute of Standards and Technology (NIST) is an excellent source for frameworks that can help you develop a cyber risk assessment and create a risk management plan.

Here are five common steps that are part of a cybersecurity risk assessment:

• Identify the risk areas: weak firewalls, outdated access controls, lack of staff education surrounding malware, phishing, hacking, and other common cybersecurity threats. Assure that you identify your most valuable data assets, such as proprietary information and software.
• Identify possible damages: how would each of the identified risk areas affect your business processes, and what is the cost of remediation? (This includes possible reporting requirements that may have to be fulfilled for your business to stay in industry compliance.)
• Assess which risk would be the most costly if it comes to pass: careful risk analysis lets you rank the identified risks. Don’t forget the cost of remediation and the cost of having to shut or slow down part of your business processes while you recover.
• Create a record of which information security risk areas you find, and create security teams who can take the lead on implementing security policies for each risk you identify.
• Review the cybersecurity risk assessment and identify how it fits your common risk management framework. Make sure you have support from all the stakeholders in your company, and build a risk-aware workforce. A staff trained to report any cybersecurity risk is an invaluable part of any risk assessment process.

How do you Create a Cybersecurity Risk Management Program?

Once you have done your cybersecurity risk assessment, it’s time to implement some of your findings and turn them into a cybersecurity risk management program.

Assemble a security team and make sure the team communicates clearly with all the cybersecurity risk management program stakeholders. The security team will be responsible for taking all your research and turning it into an easily understandable risk profile of your company before communicating it to all the internal stakeholders.

The security team will also take the lead in educating staff on network security and updating everyone on the latest cybersecurity risks, such as new ransomware, new social engineering schemes, and other threats that may fit your risk profile.

The team is also responsible for establishing and updating a risk mitigation plan that determines how you will respond to a security incident or potential threats.

What are the Components of a Risk Management Plan?

Risk management must be systematic, organized, collaborative, and cross-organizational to be effective. There are numerous cybersecurity frameworks used to describe the core aspects of a successful risk management process. Still, at the very least, it should include the components listed below.

Risk Identification

Risk identification is the process of identifying prospective business hazards and classifying the dangers the business encounters. Identify all potential risks methodically, since such discipline decreases the chance of overlooking potential threats.

When assessing risk, consider the company’s current risks and those that may develop in the future. The risk landscape changes as technology evolves and companies restructure.

Risk Analysis

After identifying risks, the next stage is to assess their likelihood and possible effect. For example, how vulnerable is the company to a particular risk? What is the likely cost of the risk should it happen? Based on the potential for disruption, an organization may categorize risks as “severe, moderate, or minor” or “high, medium, or low.”

The classification technique is less important than the understanding that some risks are more urgent threats than others. Businesses use risk analysis to prioritize mitigation. For example, one risk might theoretically pose great harm, but also have a low chance of actually happening. If a risk has a high cost and a high chance of happening, that should go to the top of the remediation list; other risks can come later.

Response Planning

An Incident Response Plan addresses the question, “What are we going to do about it?” For example, suppose you discovered during identification and analysis that the company is vulnerable to phishing attempts because the staff is unaware of email security standards. In that case, your response plan may include security awareness training.

Risk Mitigation

Risk mitigation is the action (or set of actions) your company takes to lower risk exposure. For example, you might introduce new security training for employees or adopt multi-factor authentication to access confidential systems. The organization must create safeguards that bring the risk to acceptable levels. It is necessary to evaluate these controls to assure they are appropriately constructed and functional.

Risk Monitoring

Risks evolve over time. What was once considered a minor risk might become a severe danger to the company, or vice-versa. Understanding your current risk profile through routine risk assessments is the process of risk monitoring.

Cybersecurity Risk Management is Made Easy with ZenRisk

At Reciprocity, a team of cybersecurity professionals is always looking out for you and your assets, ensuring you get the best and most up-to-date cybersecurity risk management tools.

ZenRisk works with governance, risk management, and ever-changing compliance demands to keep your business safe and secure, freeing up time to do what you do best: run your business.

The ZenRisk compliance, risk, and cybersecurity management software is an intuitive, easy-to-understand platform that quickly identifies areas of high risk before that risk has manifested as a real threat or an actual data breach.

Worry-free cybersecurity risk management is the Zen way. Contact us for a demo for more information on how ZenRisk can help your organization.

The International Organization for Standardization (ISO) has established a framework for three distinct types of audits: first-party, second-party, and third-party. Among these, the third-party audit holds the key to ISO certification, signifying ISO compliance with specific ISO standards.

Audits play a pivotal role in contemporary corporate governance and risk management, and ISO standards represent a renowned and comprehensive framework that aids organizations in managing risk effectively. 

In this article, we delve into these three types of ISO audits, shedding light on which ones are most relevant for your organization and the circumstances under which they are applied to ensure ISO compliance with the various types of ISO standards.

What Is ISO Auditing?

ISO Auditing, such as an ISO 9001 audit, systematically examines an organization’s operations, systems, and processes to ensure they adhere to the ISO standards. This includes the evaluation of a Quality Management System (QMS). 

Internal auditors may conduct ISO Audits as internal audits or by external ISO auditors during a certification audit performed by a certification body.

The audit process involves assessing the organization’s documented procedures and performance against ISO requirements and identifying nonconformities and areas for improvement. These non-conformities need to be addressed through corrective actions. 

An audit checklist guides the audit, and the results are documented and presented during a management review. The primary goal is to verify compliance with ISO standards specific to the organization’s ISO certification.

Why Is an ISO Audit Important?

ISO Auditing is crucial for several reasons, especially for organizations that aim to become ISO-certified:

1. Quality Assurance: ISO standards, such as ISO 9001, focus on establishing a robust Quality Management System (QMS), ensuring high-quality products and services. An ISO audit helps organizations maintain and improve their quality policy and meet quality objectives.
2. Compliance: Many industries require ISO certification to meet regulatory and contractual obligations. An external auditor may perform a certification audit to confirm submission. Please comply to avoid legal issues or loss of business opportunities.
3. Risk Management: ISO Audits play a significant role in risk management by identifying potential risks and areas for improvement. Addressing these findings helps mitigate operational, financial, and reputational risks.
4. International Credibility: ISO certification signals stakeholders that an organization follows global best practices. This enhances trust and facilitates international trade.
5. Cost Savings: By optimizing business processes and reducing waste, ISO Audits can lead to cost savings over time. Improved efficiency and reduced errors result in financial benefits.

ISO Auditing is essential because it ensures organizations operate by international standards, leading to improved quality, compliance, risk management, enhanced credibility, and potential cost savings. It is a valuable tool for businesses aiming to continually improve and maintain a competitive edge in a global marketplace.

What are the three types of audits?

First-Party Audits

First-party audits are the internal audits we mentioned earlier. Typically, they are performed by a company’s staff to measure how well the company is (or isn’t) achieving business objectives. This ISO audit is a conformity assessment to check for compliance gaps and to prepare an organization for an external ISO certification audit (that is, a third-party audit).

Usually, first-party auditors will be enterprise employees, but they shouldn’t be vested in the audit results.

Second-Party Audits

A second-party or external audit is usually performed at a customer’s request (often by an audit firm contracted to act on the customer’s behalf) on a supplier of products or services.

The second-party audit assures that the supplier is doing what it has promised to do based on the contractual agreements. In this case, qualified staff members or employees of an outside consulting firm can perform a second-party audit.

A company will likely want to combine the results of a second-party audit with its first-party audits so the company will know when it’s ready for an ISO certification.

Third-Party Audits

The third-party audit is a certification audit. An organization typically undertakes a third-party audit to achieve an ISO certification. During the certification audit, a “certification body auditor” (an auditor formally certified to perform audits for the ISO standard in question) assesses whether an enterprise complies with the appropriate ISO standard. If so, the certification body auditor will award the certification.

As part of this audit process, the auditor may:

• Assess the company’s adherence to the ISO standard’s requirements. These could include (but are not limited to) time, temperature, responsiveness, and component mixture.
• Look closely at the resources, methods, and environment the company uses to transform inputs into outputs and the criteria used to determine performance.
• Examine the process controls to ensure they are both efficient and effective. The auditor may also take a closer look at daily operations and training procedures to verify that the expectations for the standard have been met.

Since most ISO standards that are eligible for certification govern systems (for example, quality systems, information security management systems, food safety management systems, and environmental management systems), ISO certification audits are generally system audits.

There are more than 23,000 ISO standards – including the ISO 9000 family of standards, which govern quality management systems. ISO 9001 is the only standard in this group eligible for certification. ISO 14001 offers direction on how to develop an effective environmental management system. ISO 27001/27002 is an information security standard. These represent just a few examples of ISO standards organizations may pursue for certification, including the corresponding surveillance audits.

Types of ISO audits

There are several types of ISO audits, each serving a specific purpose within the framework of ISO standards and management systems. Here are some of the most common types of ISO audits:

1. ISO 9001 (Quality Management System) Audit: This audit assesses an organization’s Quality Management System (QMS) to ensure compliance with ISO 9001 requirements, focusing on continuous improvement and providing quality products and services.
2. ISO 14001 (Environmental Management System) Audit: The ISO 14001 audit evaluates the Environmental Management System (EMS) to ensure compliance with ISO 14001 requirements and applicable environmental regulations, aiming to verify effective implementation and maintenance.
3. ISO 45001 (Occupational Health and Safety Management System) Audit: This audit ensures that the Occupational Health and Safety (OH&S) management system aligns with ISO 45001 requirements and relevant OH&S regulations, focusing on preventing work accidents and health impacts.
4. ISO 27001 (Information Security Management System) Audit: ISO 27001 audits focus on an organization’s Information Security Management System (ISMS), verifying compliance with ISO 27001 standards and regulatory requirements, emphasizing information confidentiality, integrity, and availability.
5. ISO 13485 (Medical Device Quality Management System) Audit: The ISO 13485 audit ensures compliance with ISO 13485 and various medical device regulations, particularly assessing an organization’s ability to maintain the safety, quality, and performance of medical devices.
6. Other ISO Management System Audits: Other ISO standards, such as ISO 22301 and ISO 22000, can be audited based on an organization’s specific products, services, business processes, and management systems. Depending on the organization’s goals and needs, these audits may encompass internal, supplier, and certification audits.

What Are the Benefits of a Third-Party Audit?

Investing in a third-party audit can demonstrate to potential customers that your information systems and business procedures follow strict security, availability, integrity, privacy, and confidentiality standards. Would-be customers can feel more comfortable working with you, knowing that your operations meet the rigorous ISO standards for performance.

This becomes even more true when considering cybersecurity and data privacy. Hackers are now a constant threat, and customers want to know before handing over valuable information to a business (such as yours) that it has taken serious steps for data protection. Achieving ISO certification gives them that assurance.

Is a Third-Party Audit External?

Yes. Independent auditors conduct third-party audits for a separate party’s benefit. An audit firm not connected to the supplier-customer relationship conducts a third-party audit without potential conflicts of interest.

What Happens During an ISO Audit?

An ISO audit involves a systematic assessment of an organization’s compliance with ISO standards and the efficiency of its management system. The process begins with meticulous planning, outlining the audit’s objectives and the specific ISO standards to be reviewed. An opening meeting sets the stage, where the audit team collaborates with the auditee, discussing the audit’s scope and agenda.

Auditors delve into a document review, scrutinizing the organization’s procedures, records, and policies to gauge their alignment with ISO standards. For on-site audits, auditors physically visit the organization’s premises, observing processes and conducting interviews with employees to gather firsthand information. During the audit, discussions are crucial to understanding the organization’s operations and identifying nonconformities—deviations from ISO standards requiring corrective actions.

Upon completion, auditors compile their findings, both positive observations and identified nonconformities, into an audit report. A closing meeting with the auditee provides a platform to discuss the results and any necessary corrective actions. 

How to Prepare for Your ISO Audit

Preparing for an ISO audit is crucial in ensuring a successful audit process and demonstrating compliance with ISO standards. Here’s a step-by-step guide to help you prepare for an ISO audit:

1. Understand the audit scope, focusing on the ISO standard or management system to be audited.
2. Plan an internal audit program considering complexity, recurring issues, and process importance.
3. Select impartial auditors with a good understanding of audit standards.
4. Develop a detailed audit plan, including objectives, scope, schedule, and resources.
5. Gather necessary information and obtain the auditee’s cooperation for access.
6. Prepare an internal audit checklist to cover all necessary areas and evidence.
7. Review processes thoroughly for compliance with ISO standards.
8. Document findings, both positive and nonconformities, with evidence.
9. Collaborate on corrective actions for nonconformities and document them.
10. Use findings for continuous improvement and organizational enhancements.
11. Communicate results and provide necessary training.
12. Conduct follow-up audits if needed to verify corrective action effectiveness.

By following these steps and conducting internal audits regularly, your organization can better prepare for external ISO audits conducted by certification bodies. The internal audit process helps identify areas for improvement, ensure compliance with ISO standards, and demonstrate a commitment to maintaining a robust management system.

What Happens if Your Company Fails an ISO Audit?

If an organization fails an ISO audit, it must take corrective action to fix the problems. There are specific steps a company can take to remedy its problems and achieve ISO certification, including:

1. Analyze the situation. The auditor’s non-conformance report will describe whether there was a “minor non-conformance” or a “major non-conformance.”
   • A minor non-conformance means the auditor has found gaps in the enterprise’s ISO compliance, but only a few. For example, the company didn’t follow one ISO requirement, or an individual didn’t have the necessary documentation to demonstrate compliance.
   • A significant non-conformance indicates that the management system has a fatal flaw and needs to include something essential to achieve organizational goals or protect customers. For example, the company didn’t implement a primary procedure or requirement, or the organization needs to take the required preventive or corrective action to assure compliance.
2. Take corrective action. A minor non-conformance will ensure an organization achieves an ISO certification if the company immediately tries to rectify the problems outlined in the report. A significant non-conformance, on the other hand, denies certification. To achieve certification, the enterprise will have to schedule another audit.

Manage ISO Audits With ZenGRC

The ZenGRC compliance workflow management system is an easy, user-friendly tool for identifying high-risk areas before they become problems.

ZenComply’s workflow management tools simplify compliance paperwork via a real-time dashboard showing your control efficacy. By supporting your replies to auditor questions, you can create an audit trail while implementing corrective actions necessary to pass the audit.

ZenGRC’s single source of information platform reduces the need for follow-up requests from external auditors by supplying the required paperwork and facilitating stakeholder relationships with internal and external parties.

Schedule a demo to learn more about how ZenGRC helps businesses manage compliance.