In today’s digital world, data is ever-present, and as such, remains a valuable asset for many stakeholders. As the importance of data has grown, so have the risks involved in protecting it. For stakeholders that manage data (e.g., financial, healthcare, personally identifiable information (PII)) on behalf of third parties (e.g., customers) and who are subject to regulatory and compliance audits, data security and confidentiality are essential for minimizing the risk of compromise. This is where governance, risk management and compliance (GRC) systems come in to support the maintenance of an effective internal control environment.
In this article, we’ll explore how GRC systems have improved in recent years and how these systems have become essential tools in a service auditor’s toolbox to streamline fieldwork procedures and provide support for System & Organization Controls (SOC) examinations and other regulatory audits.
GRC systems: A rocky start
In the past, GRC systems were often poorly designed. User experience tended to take a back seat to other capabilities resulting in systems that weren’t user-friendly or intuitive.
Further, these systems frequently struggled to meet the needs of complex organizations and their multiple stakeholders. A typical organization has governance, risk and compliance needs that impact its board of directors, C-suite executives, various departments or business lines, and internal audit, as well as vendors and customers or prospects. Often, these systems didn’t provide adequate visibility into all risk areas or permit easy customization to support bespoke risk management strategies.
Finally, GRC systems historically have lacked robust regulatory and compliance framework content. A system might be designed to address finance or IT, but lacked the support of operational and functional areas of organizations. This, in turn, made establishing a risk management plan for a company incredibly difficult (an especially acute problem for those companies subject to a myriad of regulations).
The times, thankfully, have changed.
A new era of GRC system functionality
GRC systems have evolved substantially in recent years. Companies now leverage advanced solutions that offer increased flexibility and functionality while providing an intuitive, user-friendly experience. These new solutions have proven capable of adapting to complex organizational needs while providing increased visibility of all risk areas and robust content for compliance framework support.
As auditors, we’ve learned and adapted to several different GRC solutions used by our clients. We recognize that today’s GRC solutions offer significant benefits, allowing organizations to achieve greater efficiency and accuracy in their compliance efforts.
Some of the benefits include:
- Greater transparency and reliability of audit evidence.
- Improved communication capabilities between auditors and their clients to enhance audit workflows.
- Enhanced GRC modules that support risk assessment procedures, evidence gathering, and control analysis across multiple security frameworks.
These benefits demonstrate how such GRC systems can facilitate better and more efficient audits and examinations. However, such benefits should be tempered with a note of caution. Unlike what some GRC system vendors seem to imply, the use of a GRC system cannot guarantee that your company will “pass the audit.”
GRC capabilities add value to both “auditor” and “auditee”
GRC systems provide significant advantages that make the SOC examination and other regulatory audit processes more efficient throughout fieldwork procedures.
SOC examinations (for those unfamiliar with the concept) are independent examinations that help demonstrate to customers and other key stakeholders that a company’s systems and controls are designed and operating effectively, securely and compliantly. While not mandatory, SOC reports can be a valuable way to show clients and vendors that you have robust controls in place to protect their data.
GRC systems can support the organization and help automate many aspects of the SOC examination process. Some capabilities include:
- Project Management – track audit milestones and progress using pre-built dashboards and reporting capabilities, allowing your organization to summarize results and make it easier for auditors to review the data and draw conclusions about the organization’s compliance posture; collaborate with your auditors to complete tasks and address findings; manage “multi-scope” compliance efforts by reducing redundant work for “common controls” across the organization.
- Guidance – provides organizations the benefit of pre-written policies, controls and evidence tasks for myriad frameworks to which customization against the organization’s business is necessary.
- Automation – enables the collection and verification of audit evidence by authenticating integrations from third-party sources directly into your tech stack.
Our experience with various GRCs and their capabilities allows us to develop a comprehensive approach to helping our clients build their GRC platform. We can help our clients customize their GRC systems to suit the needs of their organization by conducting a SOC “readiness assessment” that includes:
- Risk assessments to determine the scope of regulatory and compliance needs and building out appropriate control sets within the GRC modules.
- Policy, procedure and control design and optimization.
- Assistance with integrating the GRC system with the company’s tech stack to gather evidence automatically.
- Development of appropriate workflows between the control owner, audit evidence and auditor.
- Design a “test once, comply many” controls model to support efficiencies throughout the company’s ongoing audit process for regulatory and compliance requirements.
Keeping track of each regulatory need using different tools can be overwhelming, especially if your organization is accountable to more than one compliance measure. A modern GRC system can offer your company innovative technology for streamlined workflow processes, including automated workflows to monitor internal controls, initiate remediation procedures and flag new compliance needs, significantly reducing the risk of data breaches, maintaining compliance and building client confidence.
If you need help supporting your compliance efforts or safeguarding against the risks and costs of compliance failures, reach out to Dean Flores. We’re happy to help you select and implement a robust GRC system so that you can anticipate significant efficiency gains and better preparation of SOC examinations and other regulatory and compliance requirements.
