Category: News

Home / News
Nov12023

ISO 27001 certification benefits

ISO 27001 certification benefits

Obtaining an ISO 27001 certification offers a multitude of advantages, not only for your internal operations but also for your relationships with customers and partners. This certification leads to heightened information security within your premises and among your employees while continuously enhancing your business processes. These benefits extend to your stakeholders as you effectively mitigate information security risks, establishing yourself as a trustworthy collaborative partner.

Minimized Information Security Risks and Ensured Continuity: The ISO 27001 certification process doesn’t solely uncover internal information security risks; it also sheds light on external threats. As a response, the necessary security measures are implemented. This proactive approach serves as a safeguard against security incidents that could potentially lead to data breaches, negative public exposure, or even claims for damages. Prioritizing information and data protection is vital, both for the individuals involved and for preserving your organization’s image and reputation. With ISO measures in place, the likelihood of sensitive information being compromised is significantly reduced.

Demonstrated Adherence to Privacy Laws and Regulations: ISO 27001 certification demonstrates your organization’s compliance with the privacy requirements outlined in GDPR and other relevant laws. While this compliance might be inherent in your operations, it serves as a valuable reassurance for your customers.

Enhanced Reliability for Customers: One of the primary merits of an ISO 27001 certificate for customers is that it portrays your organization as professional and safety-conscious. Through this certification, your company exhibits meticulous handling of confidential data, which is endorsed by all levels of your organization.

Improved Market Position: In various industries, ISO 27001 is increasingly becoming a prerequisite for clients. Holding the certificate attracts more reputable customers, enhancing your organization’s standing. Beyond its commercial implications, governmental regulations concerning information security are growing more stringent. ISO 27001 certification serves as essential documentation for participating in (European) tenders and securing government contracts.

Structured Information Security System: ISO 27001 standards necessitate the implementation of an Information Security Management System (ISMS). The protocols and procedures developed within this system, such as process descriptions, reports, and records, provide your employees with a framework to follow. ISMS encourages your organization to approach information security systematically and maintain a culture of critical thinking.

Commitment to Continuous Improvement: With an ISO 27001 certification, your organization demonstrates an ongoing commitment to information security. It operates in line with the PDCA cycle (Plan, Do, Check, Act), continually monitoring security measures and making necessary enhancements. This approach reflects your dedication to staying vigilant and adapting to evolving security challenges.

Nov12023

SOC 1 & SOC 2

SOC 1 & SOC 2

The primary and widely used term for service organizations reporting on third-party risks to user organizations is the Systems and Organization Control Report, often referred to as the SOC report. This term was introduced by the American Institute of Certified Public Accountants (AICPA) as a replacement for the SAS70 framework.

Previously, these were known as Service Organization Control reports. SOC encompasses a suite of reports that originated in the United States. ISAE 3402 is aligned with the US Statement on Standards for Attestation Engagements (SSAE) 18 US standard. An ISAE 3402 report delivers assurance on a service organization’s system description and the appropriateness of its control design and operational effectiveness as presented in a Service Auditor’s Report.

ISAE 3402 | SOC 1: In an ISAE 3402 | SOC 1 report, organizations establish their own control objectives and controls and align them with customer requirements. The scope of an ISAE 3402 report typically includes all operational and financial controls that impact financial statements, as well as IT General Controls (e.g., security management, physical and logical security, change management, incident management, and systems monitoring). In essence, if an organization hosts financial information that could affect its client’s financial reporting, pursuing an ISAE 3402 | SOC 1 audit report is the most logical choice and is often requested. ITGCs, operational controls, and financial controls fall within the purview of an ISAE 3402 | SOC 1 audit.

SOC 1: In a SOC 1 audit, control objectives essential for accurately representing internal control over financial reporting (ICOFR) are required. Organizations subject to SEC filings in the United States typically include these objectives.

Given the importance of IT service providers, cloud service providers, and datacenter/housing providers as key suppliers to financial institutions, standards like SAS70, SSAE 18 SOC 1, and ISAE 3402 have gained significant prominence in the IT industry. They have become the most comprehensive and transparent standards for effective IT outsourcing and risk management. Organizations seeking an ISAE 3402 | SOC 1 report often contemplate ISAE 3000 | SOC 2 reports.

ISAE 3000 | SOC 2: In ISAE 3000 | SOC 2 reports, the Trust Services Principles and Criteria (TSPs) are applied. These TSPs consist of specific requirements developed by the AICPA and Canadian Institute of Chartered Accountants (CICA) to provide assurance concerning security, availability, confidentiality, processing integrity, and privacy. An organization can select the specific aspects that align with their customers’ needs. An ISAE 3000 | SOC 2 report may encompass one or more principles. When an organization handles various types of information for clients that do not impact financial reporting, an ISAE 3000 | SOC 2 report is more relevant. In such cases, clients are primarily concerned about the secure handling and availability of their data as stipulated in their agreements. A SOC 2 report, like a SOC 1 report, evaluates internal controls, policies, and procedures.

SOC 1 or SOC 2: Organizations that manage, process, or host systems or information affecting financial reporting should invariably provide an ISAE 3402 | SOC 1 report. ISAE 3000 | SOC 2 is suitable when all systems and processes are unrelated to financial reporting. Datacenter providers, Infrastructure as a Service (IaaS) providers, and Platform as a Service (PaaS) providers often issue hybrid reports, incorporating both an ISAE 3402 | SOC 1 for finance-related processes and systems and an ISAE 3000 | SOC 2 for unrelated processes and systems. The content of both reports is typically identical.

Nov12023

Benefits: Improving Risk Control and transparency

Benefits: Improving Risk Control and transparency

Organizations often encounter inquiries from (potential) clients about security standards, with questions regarding the distinctions between ISAE 3402 | SOC 1, ISAE 3000 | SOC 2, and ISO 27001 audits. They seek to determine which standard is more suitable for their company and weigh the advantages and disadvantages of ISAE versus ISO 27001. ISAE 3402 | SOC 1 and ISO 27001, in reality, are significantly different standards, with divergent applications. The primary disparities are in the reporting format and the nature of the audit itself.

Notable Benefits:

  • Proficiency in risk management
  • Enhanced market trust
  • Streamlined audit processes
  • Improved control measures

ISAE and Security: ISAE 3402 is an attestation performed by an independent certified accountant or firm that assesses System and Organization Controls (SOC) information against defined audit objectives or criteria. In an ISAE 3402 | SOC 1 report, IT general controls (ITGCs) and, consequently, security aspects are included, but the primary focus revolves around financial procedures and controls. On the other hand, an ISAE 3000 | SOC 2 report concentrates on the Trust Service Principles, encompassing security, availability, and privacy. It shares more common ground with ISO 27001. An essential distinction is that ISAE 3402 | SOC 1 and ISAE 3000 | SOC 2 reports are forms of attestation, whereas ISO 27001 is a certification.

ISO 27001: ISO 27001, in contrast, is a risk-based standard designed to establish, implement, and enhance an organization’s security framework or Information Security Management System (ISMS). This security framework adheres to the ISO and IEC standards and is validated by independent certification bodies.

The organization must have the procedures and controls outlined in Annex A of the ISO 27001 framework in place. These procedures and controls effectively mitigate risks, thereby bolstering information security. ISO 27001 provides a comprehensive system for ensuring information security, and all organizations that adopt ISO 27001 should have an information security management system in operation.

Choosing Between ISO 27001 and ISAE 3402 | SOC 1: The landscape has evolved. ISO 27001 has traditionally served as the gold standard for information security. However, given the ever-evolving information security risks, many organizations now seek a higher level of assurance concerning information security. ISO 27001 prescribes a fixed set of controls, while ISAE 3402 and ISAE 3000 standards are principle-based. This means that the controls cannot be rigidly stipulated but must function effectively. An auditor will qualify the ISAE 3402 | SOC 1 assurance opinion if this is not the case. An ISAE 3402/3000 audit entails a comprehensive examination that centers on the effectiveness of the risk framework in managing risks. If risks are not adequately managed, the ISAE 3402 report will reveal this deficiency. This level of transparency is essential in the evolving global economy and the ever-changing threat landscape.

Nov12023

Outsourcing

Outsourcing

Organizations have long grappled with harnessing their competitive edge, a pursuit that gained momentum since the Industrial Revolution, driven by the quest to expand their markets and boost profits. Throughout the 19th and 20th centuries, the prevailing model was the large integrated organization, which, in the 1950s and 1960s, underwent further diversification to capitalize on economies of scale.

Economies of Scale: The large integrated organizations broadened their product offerings, necessitating additional layers of management. As technological advancements, such as the internet, emerged, businesses faced the imperative to compete globally in the 1980s and 1990s. However, their unwieldy management structures hindered flexibility. To enhance agility, many large organizations turned their focus toward core business and essential processes.

Principal-Agency Problem: This shift towards core processes precipitated discussions on identifying which processes were critical for business continuity and which could be outsourced to external service providers. Processes lacking internal resources were outsourced to specialized agencies or service providers. Consequently, the principal-agency problem, involving the user organization and service organization, gained prominence. The principal-agency theory and related information asymmetry grew in significance in line with the expansion of outsourcing.

Outsourcing: The principal-agency problem manifests through information asymmetry, where the principal is often unaware of the agent’s activities or is prohibited from acquiring pertinent information. This disparity creates a divergence of interests between the principal and the agent, potentially leading to undisclosed actions and outcomes. The evolution of the accountancy profession played a pivotal role in mitigating this agency problem on a global scale.

Risk and Resource Planning: In scenarios where agents intend to commit resources from investors to high-risk investments, an asymmetry in risk tolerance may emerge. Agents, making decisions while facing minimal to no personal risk, may engage in activities that put the onus of potential losses on the principal. Information asymmetry also characterizes the relationship between management and employees, especially when management lacks full insight into employees’ daily activities. The principal and agent often possess opposing financial interests.

Financial Consequences: When the principal is an investor or shareholder, their focus is on optimizing investment returns, which are subsequently paid out as dividends. High dividend payouts can constrain investment opportunities and lead to cash flow challenges for the organization’s management. The principal-agent problem is also relevant in the context of management’s relationship with employees, where differing objectives and information asymmetry can create tensions.

Agency Theory in Outsourcing: Agency theory pertains to relationships between two parties where one acts as the principal, and the other serves as the agent, representing the principal in transactions with third parties. Agency issues may arise when the agent makes decisions and contracts affecting the principal.

In the context of outsourcing, the agency theory applies to information asymmetry, resource planning disparities, and differing risk tolerances. For example, when a financial institution outsources IT services to a managed service provider, the provider may make decisions about risk and data storage without insight into the institution’s risk tolerance. This can lead to issues such as downtime and resource allocation mismatches. Outsourcing offers numerous advantages, including cost control, efficiency improvement, and risk reduction. However, the principal-agency problem remains a primary risk, as it hinges on divergent goals and risk aversion levels between principal and agent.

Phases in Outsourcing: Outsourcing has evolved through various phases, starting with the primary or baseline stage where ancillary services are outsourced. The second phase involved cost-saving outsourcing, where services were transferred to lower-cost providers. The latest phase is strategic asset outsourcing, where even core competences are considered for outsourcing.

In conclusion, outsourcing presents both opportunities and challenges, and Securance can assist in achieving compliance with ISAE 3402, SOC 1, ISAE 3000, SOC 2, ISO 27001, and ISO 9001. Contact us for tailored solutions to meet your organization’s needs.