Enron, WorldCom, Tyco… even two decades after their respective scandals, these names are still synonymous with corporate fraud. Congress passed the Sarbanes-Oxley Act of 2002, commonly referred to as SOX 404, in response to these egregious examples of corporate greed and misconduct. The law holds U.S. companies responsible for their financial record-keeping and reporting practices, and it stipulates criminal penalties for misconduct related to the manipulation, destruction, or alteration of financial records. 

As a U.S. company, especially a publicly traded one, it’s vital to know what parts of SOX apply to your business and how to ensure compliance. Section 404 of the act (SOX 404) deals specifically with the internal controls and procedures that companies must implement in their financial reporting process. Keep reading to learn more. 

What Is SOX 404? A Summary 

SOX Section 404 (“Management Assessment of Internal Controls”) is commonly considered one of the most resource-intensive sections of the act to which companies must adhere. There are two subsections: 

SOX 404(a) requires that companies implement and maintain effective internal controls. Companies document compliance with an “internal control report” with each of their annual reports mandated by the Securities Exchange Act of 1934, such as Form 10-K. This report, provided by company management, should describe and assess the effectiveness of the company’s internal control over financial reporting (ICFR). 

SOX 404(b) requires that an independent auditor attest to and report on the assessment of internal controls provided by company management. 

The Importance of SOX 404 

While complying with SOX 404 can be a headache for executives, it serves an important purpose. Beyond shielding investors from risk, SOX 404 also safeguards a company’s reputation and longevity by annually assessing the design of their control environment and ensuring the controls are operating effectively with no gaps that would lead to a risk of incorrect financial statements. 

Who Must Comply with SOX 404? 

The Sarbanes-Oxley Act applies to all publicly traded companies in the U.S. (including wholly owned subsidiaries and publicly traded foreign companies that do business in the U.S.) with some important distinctions between SOX 404(a) and SOX 404(b). The Dodd-Frank Wall Street Reform and Consumer Protection Act codified an exemption to SOX 404(b) for non-accelerated filers, as defined by the Securities and Exchange Commission (SEC). In other words, companies that do not rise to the level of accelerated or large accelerated filers according to the SEC are not required to enlist an independent auditor for SOX testing and will only fall under the requirements of SOX 404(a). 

The SEC updated its definitions of accelerated filer and large accelerated filer in March 2020, which led to a greater number of companies becoming exempt from SOX 404(b). Combined with previous SEC updates to its definition of smaller reporting companies (SRCs) in June 2018, companies meeting any of the following criteria are exempt from SOX 404(b): 

SRCs (i.e., companies with less than $250 million in public float or less than $100 million in annual revenues with less than $700 million in public float) that reported less than $100 million in annual revenues in the most recent fiscal year 

Emerging growth companies (EGCs) for the first five years following their initial public offerings, as long as they do not exceed annual gross revenues of $1.235 billion, have not issued more than $1 billion in non-convertible debt in the past three years, and do not become large accelerated filers 

Newly acquired businesses in the first year following acquisition 

Do Private Companies Need SOX 404 Testing? 

While private companies and nonprofits are not required by law to perform SOX 404 audits, there are situations in which third parties may encourage them to perform various internal control audits (SOC/ISO) to ensure all systems and processes used in financial reporting are reviewed.  

How SOX 404 Compliance Testing Works 

The complete SOX testing process involves several rounds of internal testing throughout the year followed by an annual independent audit as required by SOX 404(b). If you are preparing for your first official SOX audit, consider working with compliance experts who can help you set processes up the right way and avoid headaches down the road. 

That said, no matter how mature your company is or how robust your internal controls are, some deficiencies might be uncovered during SOX 404 testing. Often, auditors point to incomplete design or documentation of controls as the cause of weaknesses. Luckily, hiring an experienced compliance auditor gives you access to expert advice that helps you decide what parts of your processes require additional steps, signoffs, or documentation to ensure the effectiveness of internal control design and operations.  

Combining SOX 404 Testing with Other Compliance Requirements 

When it comes time for your yearly SOX audit, an external third party can provide subject matter expertise ensuring robust coverage of the control environment. As you research auditors, take into account any other compliance testing your company requires. Look for a SOX auditing firm that can help you with other compliance and cybersecurity certifications like SOC 1 or SOC 2. 

Considering the strain that compliance testing can put on internal resources in terms of manpower and finances, it’s in your business’s best interest to avoid going through multiple rounds of auditing with different testing providers. Using an auditor who can identify the overlap of internal controls, processes, and evidence requests to satisfy multiple compliance efforts reduces the burden on your employees. Simply put, your team can get back to doing their jobs instead of tracking down documentation and information for auditors. 

SOX 404 Compliance: Simplified 

In summary, the Sarbanes-Oxley Act of 2002 was passed in response to major corporate scandals of the early 2000s. SOX 404 applies to most U.S. publicly traded companies and requires a yearly audit of internal controls and processes related to financial reporting. With A-LIGN, you get comprehensive control framework coverage and testing that will provide management and investors comfort that internal controls over financial reporting are designed and operating effectively. With the right controls in place, you don’t have to dread your annual SOX audit. 

Reach out to A-LIGN’s SOX 404 experts today to learn how our decades of experience, comprehensive offerings, and flexible scheduling can help you avoid the fiscal year-end time crunch. 

If your organization handles, processes, stores, or transmits financial information, or information that can impact the financial statements of your customers, then it’s the ideal candidate for a SOC 1 audit. As an evaluation of the internal controls your organization has in place, a SOC 1 audit reviews how your organization protects client data. To go through an examination and receive a SOC 1 report, an organization must demonstrate that it is committed to and capable of delivering secure services.

What is a SOC 1 report?

A SOC 1 audit typically covers a period of six to 12 months. Following completion of the audit testing, a CPA firm will issue a report to review the findings and implement new measures if needed. It is considered an “attestation” report whereby management asserts certain controls are in place to meet the objective of the report. The firm’s auditors will provide an opinion on whether it agrees with management’s assertion.

An organization may be required to obtain a SOC 1 report by clients or stakeholders. The opinion stated by the firm in the report is valid for twelve months following the date of issuance. A bridge letter, or gap letter, is a document that states there have been no material changes or significant events within an organization’s control environment between SOC reports. The letter is issued by the organization and typically covers a period of three months or less.

Who should get a SOC 1 audit?

Enterprises that handle sensitive financial data, especially those whose actions affect financial reporting, should conduct SOC 1 audits to demonstrate to clients and partners that their information is in good hands. These include:

• Payment processors: These companies are contracted to distribute the payroll for employees at other organizations, and as such, must be trusted to perform this high-value responsibility.
• Collections organizations: These firms collect debts on behalf of another organization, and, in turn, directly impact financial reporting.
• Benefits administrators: These administrators manage, direct, and plan group benefits programs such as health, dental, vision, workers comp, 401(k), retirement and other plans. 
• SaaS MSPs: Software-as-a-Service MSPs that process financial statements have a direct impact on financial reporting.

What are the benefits of SOC 1?

Even if it’s not required by a customer or investor, there are still benefits to pursuing a SOC 1 audit. The following benefits demonstrate the value of a SOC 1 audit:

• Ensure protection of your customers’ and partners’ financial information
• Demonstrate a commitment to corporate governance
• Provide assurance to customers and partners that your systems are secure

What is the difference between a SOC 1 Type 1 and Type 2?

There are two types of SOC 1 audits that an organization can conduct – Type 1 and Type 2. So, what’s the difference?

A SOC 1 Type 1 audit assesses an organization’s internal controls at a specific point in time. The report acts as a snapshot of your environment to determine and demonstrate if the controls are suitably designed and in place.

A SOC 1 Type 2 audit assesses an organization’s internal controls over time, typically a twelve-month review period. It serves as a historical review of an environment to determine and demonstrate if the controls are suitably designed and in place, as well as operating effectively over time.

How does a SOC 1 report differ from a SOC 2 report?

You might have heard of a SOC 2 report and are now wondering how it differs from a SOC 1 report. While similar, there are a few key differences you should be aware of when deciding whether to pursue SOC 1 or SOC 2.

SOC 1 is ideal for organizations whose data processing or storage can impact the financial reporting of their customers, and SOC 2 reports are relevant for a broader group of organizations because they focus on information and IT security. These may include data centers, IT managed services, SaaS vendors, and other technology and cloud computing businesses. SOC 2 audits are structured across five categories called Trust Services Criteria and are relevant to organizations who process data that does not directly affect the financial statements of end users:

1. Security (required): Security controls protect information throughout its lifecycle. Organizations establish security controls to protect against unauthorized access, unauthorized disclosure, or damage to systems. Controls include a range of risk-mitigating solutions including endpoint protection and network monitoring tools to prevent or detect unauthorized activity.
2. Availability (optional): Availability controls keep systems operational and available at a level that meets stated business objectives.
3. Processing Integrity (optional): Processing Integrity controls ensure systems operate predictably and without accidental or unexplained errors.
4. Confidentiality (optional): Confidentiality controls protect sensitive information throughout its lifecycle from collection to disposal.
5. Privacy (optional): Privacy controls are specific to protecting personal information, especially information captured from customers.

How can I prepare for an audit?

Proactively preparing for a SOC 1 audit can save you time and better position your organization for a successful and efficient evaluation.

Define the scope: To ensure that your audit proceeds on schedule and within budget, define the scope. Will the assessment engage the entire organization, or will it be limited to specific departments? Determining this before the evaluation begins is critical.

Take inventory of assets: Compile a comprehensive list of the information systems in use including servers, routers, firewalls, load balancers, and applications so that you and your auditors can better envision the scope of the assessment.

Conduct a readiness assessment: An efficient audit requires a readiness assessment to identify what’s missing from an effective and complete internal controls environment. Remediating deficiencies before the audit begins is another critical effort.

Determine control objectives: There is flexibility allowed when compiling SOC 1 reports such that the reports of a company working with a CPA firm might differ from a similar company working with another firm. Prior to commencing the audit, determine internally and with your auditing partner which control objectives are to be included in your report.

Perform continuous monitoring: Following the completion of your audit, it’s essential to continue monitoring and assessing your control environment for maximum effectiveness, and then make improvements when necessary.

How A-LIGN can help

With thousands of SOC 1 assessments completed and more than 20 years of experience, A-LIGN is a leader in helping organizations protect the financial information of their customers and business partners. Click here to start your SOC 1 compliance journey.

Compliance isn’t just a contractual or regulatory requirement; it’s a cornerstone of trust, reputation, and operational excellence. As executives and managers evaluate compliance services, the temptation to “cert shop” or choose third-party assessors based solely on cost can be compelling. Making decisions based solely on price can pose significant risks. In this blog post, we will explore the perils of prioritizing cost over quality in compliance services. 

Quality Over Quantity 

The old saying “you get what you pay for” rings true when it comes to selecting an audit partner. While a cheaper assessor may seem like an attractive option, consider the quality of their work. Lower cost doesn’t always mean better value in the long run. Auditors who offer their services at a lower price point may lack the necessary expertise or thoroughness required for a comprehensive assessment. This can lead to overlooked vulnerabilities, ultimately putting your organization at risk.  

The A-LIGN 2023 Compliance Benchmark Report revealed that over 30% of respondents had chosen not to do business with a vendor due to poor quality of assurance reporting. Prioritizing quality over quantity ensures that your organization receives the level of expertise and attention to detail necessary for a robust and effective assessment process. 

Hidden Costs 

While low-cost assessors may initially seem like a budget-friendly option, there may be hidden costs associated with their services. A cheaper service might not be as exhaustive, potentially missing critical vulnerabilities that could leave your organization exposed to security breaches. The 2023 Verizon Data Breach Investigation Report (DBIR) references crimes of opportunity (i.e., opportunistic exploit) as the number one driver for bad actors. 

Addressing a security breach can be significantly more costly than the initial savings gained from choosing a cheaper auditor. The financial ramifications of a data breach can include regulatory fines, legal fees, damage control, and the loss of customer trust. Additionally, the cost of low-quality reporting should not be overlooked. Inaccurate or incomplete reporting can result in a lack of actionable insights and hinder your ability to make informed decisions to improve your cybersecurity posture effectively. 

Reputational Harm 

The reputation of your organization is everything. It is what differentiates you from your competitors and instills trust in your stakeholders and clients. Switching assessors solely based on price can have a negative impact on your reputation. When stakeholders, clients, or industry peers discover that you have chosen an auditor solely because they offered the cheapest price, it can lead to a perception of taking shortcuts or prioritizing cost over quality. A subpar assessment can erode trust as check-the-box assessments bring into question both the character and competence of your organization. It’s important to remember that the cost of reputational harm far outweighs any short-term cost savings gained. 

Inconsistent Assessments 

Switching audit providers frequently can lead to inconsistent evaluations. Each assessor has their own methodology, approach, and areas of focus. By constantly changing audit firms, it becomes challenging to track progress, identify recurring issues, and measure improvement over time. Consistency is key when it comes to cybersecurity assessments. Building a long-term relationship with a trusted partner allows for a more accurate and reliable evaluation of your organization’s security posture. By establishing continuity in the assessment process, you can effectively track your organization’s progress in addressing vulnerabilities and mitigating risks. 

Reactive and Fragmented Compliance 

Strategic compliance is about being proactive. It’s a process that consolidates audits and assessments, making them more efficient and less disruptive. The 2023 Compliance Benchmark Report found that 94% of respondents believe that consolidating their compliance obligations will save them time and money. However, many organizations are still taking a reactive approach to compliance. When time and budget constraints are in place, organizations are left to make less-than-ideal choices about their assessors. This leaves an opportunity for proactive organizations to get a competitive advantage by adopting a strategic approach to compliance. 

Relationship and Partnership Building 

Building a relationship with a trusted third-party assessor is invaluable. When you work with the same audit team over time, they become intimately familiar with your organization’s unique challenges, processes, and compliance needs. This deep understanding allows them to provide compliance aligned to you – tailored insights and recommendations specific to your organization’s circumstances. By building a long-term partnership, you gain trusted advisors who can guide you through the complex world of cybersecurity compliance. The best third-party compliance firms help you navigate changing regulations, provide strategic guidance, and ensure that your organization stays ahead of the curve in terms of security practices and compliance requirements. 

Prioritizing Long-Term Value 

While it is understandable to consider costs, it is equally crucial to prioritize the long-term value that a trusted and reliable auditor can bring to your organization. By focusing on quality, expertise, and consistency, you can safeguard integrity, security, and the ability to create value over time. Cybersecurity compliance is not a one-time checkbox exercise, it is an ongoing commitment to protect your organization and its stakeholders from ever-evolving threats. By choosing a reputable and experienced assessor, you are investing in the long-term success and resilience of your organization. 

While optimizing cost is essential, it can’t be the only factor when selecting a compliance partner. The potential pitfalls of “cert shopping” can have wide-ranging implications, from financial repercussions to significant reputational damage. By focusing on long-term value, you can ensure that your organization’s integrity and security are protected. Strategic compliance isn’t just about adhering to standards and regulations; it’s about leveraging them for business growth and trust-building and creating lasting value for your organization. 

As organizations strive to maintain trust and assurance, understanding the specific compliance focal points within your industry becomes crucial. A-LIGN’s 2023 Compliance Benchmark Report provides in-depth industry benchmarking data across multiple sectors, including technology, IT services, professional services, healthcare, finance, manufacturing, and government. 

In this blog, we’ll be exploring the valuable insights uncovered by the benchmarking data, shedding light on the top audit priorities within various sectors. 

What is the most important audit? 

SOC 1 is the most important audit across the most verticals, including the technology, IT services, professional services, and manufacturing sectors, with SOC 2 and ISO 27001 contending for second and third place to varying degrees. While any of these three audits are useful for demonstrating trust and assurance, SOC 1 is generally considered less intensive than SOC 2 or ISO 27001, which could explain its popularity. However, the finance sector prioritizes SOC 2 over SOC 1 because SOC 2 places a greater emphasis on demonstrating the effectiveness of its data security controls. 

The healthcare and government sectors are the outliers, which both prioritize HIPAA compliance over all others. Since HIPAA is a federal law focused on healthcare security and privacy, most non-healthcare organizations can safely ignore it. The government sector also prioritizes FedRAMP and FISMA, which are both government-specific compliance frameworks. 

What is the greatest challenge to audit processes? 

The professional services, healthcare, manufacturing, and government sectors cited limited staff resources dedicated to compliance as the greatest challenge to their audit process. These sectors could strongly benefit from strategic compliance initiatives, such as consolidating audits and auditors, and leveraging compliance management and audit software to streamline the audit process. Each of these strategies has the potential to unlock compliance efficiencies, reducing the strain on their limited resources. 

Likewise, the technology and IT services sectors could benefit from audit consolidation, as their greatest challenge is the complexity of conducting multiple audits. Consolidating audits can help ensure consistency and efficiency and save organizations significant time and resources. 

On the other hand, the finance sector cited tedious and manual evidence collection as their greatest challenge. This challenge could be related to the finance sector’s preference for the more intensive SOC 2 audit. In any case, the finance sector could be best served by adopting compliance management and audit software solutions, which offer features such as automated evidence collection and continuous monitoring of compliance state to streamline the audit process. 

Which industry conducts the most audits?  

The technology and finance sectors conduct more audits than the other industries. 60% of the technology sector conducts four or more audits per year, compared to 51% of the general population, and works with four or more auditors, compared to 30% of the general population. 32% of the finance industry conducts six or more audits per year, compared to 16% of the general population.  

A logical explanation for the high volume of audits in these industries is the importance their customers and partners place on data security and privacy. It also makes sense that the technology industry cited the complexity of conducting multiple audits as their greatest challenge since they also conduct so many audits. 

What are organizations looking for in a service provider? 

The biggest reason the technology sector would switch audit providers would be for a more efficient, less time-consuming process, which seems logical since they conduct so many audits each year. In fact, every industry said that the main reason they would switch audit providers is for a more efficient, less time-consuming process, which ultimately speaks to the value of consolidating audits and auditors. Consolidating audit service providers not only increases the efficiency of audits, saving both time and resources, but also ensures the consistency of results. 

When evaluating audit firms, the technology and IT services sectors favor audit firms that use technology throughout the entire audit process. The professional services, healthcare, manufacturing and government sectors prefer the ability to complete the entire process, from readiness to report, with a single provider. The finance sector prefers the ability to complete multiple assessments with a single provider, which again highlights how they tend to conduct more audits than any other vertical. 

Delving deeper into demographics and verticals 

If you are interested in learning more about the benchmarking data of your specific vertical, be sure to check out A-LIGN’s 2023 Compliance Benchmark Report which includes a full breakdown of upcoming audit plans and budgets, as well as best practices for achieving strategic compliance. 

Learn more — Download A-LIGN’s 2023 Compliance Benchmark Report.  

In today’s business landscape, organizations are realizing the importance of adopting a proactive and strategic approach to compliance. As highlighted by A-LIGN’s 2023 Compliance Benchmark Report, the demand for compliance is evident, with a significant number of organizations (72%) conducting audits or assessments to win new business.  

The need for strategic compliance is further underscored by the frequency of audits, the time spent preparing for them, and the benefits of consolidating audits. In this blog, we delve into the concept of strategic compliance and explore how organizations can develop a master audit plan to streamline their compliance program. We also discuss the value of consolidating audits and auditors, leveraging technology, and the journey toward compliance maturity. 

Embrace strategic compliance with a master audit plan (MAP) 

Strategic compliance requires a fundamental shift in the way that organizations approach their compliance program away from tactical and reactive audits to a more strategic and proactive compliance program. Strategic compliance elevates singular audits into an ongoing process of risk assessments, monitoring and reporting, and continuous improvement. Planning, testing and assessing, and optimization are cornerstones of strategic compliance. 

A master audit plan (MAP) is at the heart of strategic compliance. Developing a MAP includes reviewing current processes, establishing a schedule of upcoming audits, consolidating audits and auditors as needed, and delivering an efficient and scalable audit program. 

Consolidate audits and auditors 

Consolidating audits and auditors is one of the most effective approaches to enhancing the efficiency of a compliance program. Conducting multiple audits as a coordinated effort can reduce duplication of work and ensure consistency across the audit process. 

The first step toward consolidating audits and auditors is to review which audits and auditors can be consolidated. Most audits can be consolidated under a single auditor, but certain compliance frameworks may have specific requirements to be conducted independently. Once you have determined which audits you want to consolidate, seek an audit firm that provides the widest breadth of coverage for those audits. 

The process of consolidating audits and auditors should be outlined within the MAP. For example, a MAP could define the objectives and expected outcomes of the audits. Organizations should also include key activities, timelines, resources, roles, and responsibilities when they develop their MAP schedule. Likewise, this process should be continuously monitored and assessed. 

Leverage technology with auditor expertise 

In the process of consolidating audits and auditors, organizations should also consider how audit software solutions can further increase the efficiency of their compliance program — particularly if an audit service provider can provide a compliance management solution as part of their service. 

Start by reviewing the audit requirements and determining which features of compliance management software are important to you. Then, talk to your audit service provider about their software solutions or research other options to find the right solution for you needs. Commonly requested features include the ability to automate audit workflows, integrate with other systems, generate reports and analytics, provide continuous compliance monitoring, and deliver the final compliance report.  

Compliance is a journey toward maturity 

Ultimately, fostering a culture of strategic compliance takes time. This transformation requires investing resources into assessing audit requirements and researching the capabilities of service providers. Consolidation does not happen overnight — some compliance frameworks may take a year or more to fully transition from one audit service provider to another. 

Even as an organization begins their journey toward compliance maturity, their audit processes may still seem tactical and ad hoc. Over time, as technology is introduced and compliance becomes a proactive, strategic function, these processes tend to become more well-managed and consolidated. Eventually, with the right compliance framework and process, it can be optimized as a competitive advantage across departments. 

Learn more about strategic compliance in A-LIGN’s 2023 Compliance Benchmark Report. 

On January 18, 2023, HITRUST launched the latest version of its framework, HITRUST CSF v11, which brings significant changes compared to the previous version, HITRUST CSF v9.6.

HITRUST understands the importance of keeping organizations up to date with the evolving threat landscape and ensuring compliance. With the release of HITRUST CSF v11, they have redesigned the framework to enhance the efficiency of the assessment portfolio and its relevance to cyber threats. The primary goal of this new framework is to enable organizations to stay prepared for current threats and identify appropriate measures to protect their data.

The update includes the introduction of new controls and requirements, modifications to existing ones, and updates to risk factors and scoring methodology. Additionally, HITRUST CSF v11 offers enhanced security and risk management capabilities, increased flexibility for organizations, and improved alignment with other frameworks and regulations.

Here are some of the key benefits that organizations can expect from the new HITRUST CSF v11 framework:

1. Cyber Threat-Adaptive Assessments: The new framework and controls leverage threat intelligence information to proactively defend against the latest cyber threats, such as phishing and ransomware.
2. Expanded and Aligned Assessment Portfolio: This updated framework provides a comprehensive approach that addresses diverse assurance needs for different risk levels and compliance requirements. It offers greater assurance reliability compared to other assessments.
3. Traversable Assessment Journey: A new feature introduced in HITRUST CSF v11, traversable assessments allow organizations to reuse lower-level HITRUST assessments, progressively achieving higher levels of assurance by sharing common control environments and inheritance.
4. Reduced Level of Effort: The selection and specification of controls ensure that the most relevant ones are in place, eliminating redundancy. This streamlines the HITRUST certification process, reducing the time and effort required and helping organizations obtain credentials in a timely manner.
5. Expanded Authoritative Sources: AI-powered improvements increase speed, efficiency, and automation for organizations. The update includes additional sources like NIST SP 800-53, Rev. 5, and HICP, along with refreshed mappings for HIPAA, NIST CSF, and NIST 800-171.

Tips for Businesses Transitioning from HITRUST CSF v9.6 to v11

Considering the significant changes in the new HITRUST CSF v11 framework, organizations should keep the following points in mind during their transition from v9.6 to v11:

1. Communication and Training: It is essential to communicate the changes to all employees and provide necessary training to ensure awareness of the new requirements and individual responsibilities in compliance.
2. Update Risk Management Program: Align the risk management program with the newly outlined risk factors and scoring methodology in HITRUST CSF v11.
3. Review Controls and Requirements: Evaluate the new controls and requirements in v11 and identify any gaps in the current compliance posture of the organization.

To facilitate a smooth transition and address any critical control gaps, it is recommended to collaborate with a trusted cybersecurity and compliance partner. A detailed HITRUST gap assessment or diagnostic assessment conducted by such a partner, like A-LIGN, can help organizations:

• Align with industry standards and the new framework
• Mitigate risks and vulnerabilities
• Improve operational efficiency
• Enhance trust and reputation with customers, stakeholders, and partners

To ensure that your business effectively addresses any critical gaps in controls, A-LIGN offers a comprehensive HITRUST gap assessment. The HITRUST gap assessment is designed for organizations that have previously undergone the HITRUST certification process. The gap assessment involves a focused evaluation of the controls that have changed between frameworks, identifying any gaps, and providing recommendations.

This gap assessment becomes crucial when there are changes in the HITRUST standard, such as transitioning from v8 to v9 or from v9 to v11. Additionally, changes to scoring rubrics used to determine how controls are evaluated can also lead to the requirement of a HITRUST gap assessment. For example, if an organization previously scored 100% on their controls based on a less rigorous rubric, the updated rubric may yield a lower score, indicating the need for additional work.

This process allows for targeted testing and ensures businesses remain aligned with the updated standards. The gap assessment by A-LIGN provides valuable insights, helps customers maintain compliance with the latest HITRUST standards, and offers a tailored approach based on their specific needs and resources.

A-LIGN also offers a diagnostic assessment for organizations transitioning from HITRUST v9.6 to v11. This assessment generally compares previous version controls like v9.6 to an updated version like v11 framework. The diagnostic report provides best practice recommendations on how to address changes between versions based on the CSF general control library. It does not consider the specific requirement statements of an organization like the gap assessment described above does.

Organizations with a mature control environment and a compliance team could leverage the general comparison and recommendations offered in a diagnostic assessment to make the necessary changes needed to complete a validated assessment against the new CSF version. Following the diagnostic assessment, your business will receive a general comparison report outlining the identified gaps and providing recommendations on how to close them. This will enable your organization to maintain compliance and stay up to date with the latest framework.

If your organization has never done a HITRUST Assessment before, a full readiness assessment is recommended. In contrast to the gap assessment or diagnostic assessment that only provides gaps and recommendations for controls that changed between two CSF versions, the full readiness assessment reviews the scope of every single control requirement.

If your business is currently navigating the changes brought about by HITRUST CSF v11 and would like to undergo a diagnostic assessment or gap assessment to identify any gaps, we encourage you to reach out to the A-LIGN team. Our experienced professionals are available to provide further information and guidance on which assessment will be most beneficial to your organization.

Contact us today to learn more about our services and how we can support you during this transition period.

Download our HITRUST checklist now!

As the focus on cybersecurity continues to rise, many organizations are realizing that maintaining compliance and keeping their systems safe can come with many challenges. While consolidating audits and auditors is one way to streamline the process, compliance management software is another. 

More than nine out of ten organizations are now using audit software solutions, up from 71% in 2022, according to A-LIGN’s 2023 Compliance Benchmark Report. 

In this blog, we will discuss the benefits of compliance management software and highlight some of the most popular and in-demand features and capabilities that organizations should consider when evaluating compliance management software. 

What are the benefits of compliance management software? 

Once an organization realizes the business value of compliance, they may want to implement more efficient compliance processes. Compliance management and audit software is one way that organizations can consolidate their audit process. The benefits of compliance management software include: 

• Efficiency: Using compliance management and audit software has the obvious benefit of saving organizations time and improving their efficiency by streamlining the audit process. Organizations can reduce the internal resources required by automating tasks such as evidence collection and project management. This can help organizations to reduce costs, save time, and focus their resources on other important business activities. 

• Consistency: Organizations can ensure that their audits are conducted consistently across different business units and locations by using a standardized audit software solution. Consistency can help to reduce the risk of errors in the audit process. 

• Visibility: Compliance management and audit software can provide organizations with improved visibility into the audit process, such as progress tracking, status updates, and compliance assessments. By continuously monitoring compliance state, organizations can identify issues or gaps more quickly, and work to remediate these risks before they disrupt their business. 

Overall, the use of compliance management and audit software solutions can provide organizations a competitive advantage by improving their efficiency, accuracy and decision-making. 

How to evaluate compliance management software 

When it comes to compliance management and audit software, there are a lot of options. A-LIGN’s 2023 Compliance Benchmark Report provides benchmarking data to help organizations determine the most popular and in-demand features for these solutions. 

A-LIGN’s survey found commonly mentioned features, including: 

• Evidence Collection: More than half of respondents reported that their compliance management software collects evidence required for their audit. A centralized approach to evidence collection can streamline what can otherwise be a time-consuming and complex process. Organizations can achieve even greater efficiency with automated evidence collection. 

• Task Management: More than half of respondents reported that their audit software helps manage the process with features like task assignment, tracking, and reporting, which can help ensure audits are completed on time and with accountability. 

• Gap Assessment: Almost half of respondents reported that their audit solution helps to assess gaps before the audit, which can identify potential compliance issues in advance, enabling organizations to address them proactively. 

• Compliance Reporting & Analytics: Almost half of respondents reported that their audit software solution helps to prove compliance, which could include features such as automated reporting and analytics. Reports generated by the software can help demonstrate compliance and identify areas for improvement. 

• Policy Implementation: Less than half of respondents reported that their audit software solution helps to implement policies needed for the audit, which could include features such as policy templates and workflows for policy review and approval. This also includes ensuring that policies and procedures are in place and up-to-date. 

• Continuous Monitoring: Only about a quarter of respondents reported that their audit software offers continuous compliance monitoring, which can help identify issues in real-time and enable organizations to take corrective action more quickly. It is worth noting that continuous monitoring is now the most in-demand feature for organizations evaluating audit software solutions. 

Ultimately, compliance management and audit software solutions can simplify, centralize, and organize audit processes that may otherwise be time-consuming and complex. Furthermore, more advanced solutions offer continuous monitoring and automated processes to enable even greater efficiency. 

How to streamline the audit process with A-SCEND 

A-LIGN’s automated compliance management software, A-SCEND, is an end-to-end audit solution. From readiness and evidence collection to reporting and certification (and more), A-SCEND streamlines the full audit lifecycle. Key features and benefits include: 

• Automated Evidence Collection: Save time and resources. 
• Cloud Integrations: Accelerate readiness to reporting. 
• Continuous Monitoring: Reduce security and compliance risks. 
• Policy Center: Access industry best practices at your fingertips. 
• Automated Readiness Assessments: Get audit ready in half the time. 
• Consolidated Audit Requests: Easily satisfy multiple audit requirements with one click. 

To learn more about the strategic benefits of compliance, read A-LIGN’s 2023 Compliance Benchmark Report. 

Contact A-LIGN to learn more about how A-SCEND can streamline your audit process to drive a competitive advantage for your organization. 

Cybersecurity compliance is a competitive advantage. Cybersecurity compliance enables organizations to improve their security posture, comply with industry regulations, and to demonstrate the effectiveness of their cybersecurity controls to customers and partners.  

However, despite the benefits, many organizations struggle with the challenges of their compliance program. According to A-LIGN’s 2023 Compliance Benchmark Report the greatest compliance strategy challenge is that audits are reactive, driven by customer requests versus internal management. The greatest audit process challenge is limited staff resources. 

In this blog, we will share results from A-LIGN’s 2023 Compliance Benchmark Report to highlight some of the greatest challenges and provide tips for organizations that want to implement a more strategic compliance program. 

The Challenge of Ad-Hoc Audits 

The greatest challenge related to compliance strategy is that audits are ad-hoc and assessments are conducted at the request of customers or other stakeholders. There are several issues associated with this challenge: 

• Reactive Approach: Ad-hoc audits are often conducted in response to a specific request, rather than as part of a proactive compliance program. This reactive approach can leave the organization vulnerable to compliance gaps that may not be identified until an audit is conducted. 
  
• Lack of Consistency: Ad-hoc audits may be conducted differently each time, depending on the requirements of the customer or partner. This can lead to inconsistent audit findings and make it difficult to identify trends or patterns in compliance reports. 
  
• Resource-intensive: Ad-hoc audits can be resource-intensive, as they require the organization to divert staff and resources to meet the requirements of each audit request. Frequently, this results in the duplication of work (such as collecting evidence). This can be a burden on the organization, especially if they are receiving multiple audit requests, but managing them individually. 

Other challenges related to compliance strategy include the difficulty keeping up with new compliance requirements and the lack of a coherent compliance strategy entirely. When you consider these issues, it is clear that organizations would benefit by implementing a more strategic compliance program that proactively pursues and consolidates audits. 

The Challenge of Limited Resources 

When it comes to the specific challenges of the audit process, the greatest challenge for most organizations is limited staff resources dedicated to compliance. Organizations with limited resources will compound the challenge of conducting ad-hoc audits (and the issues associated with them). Additional issues related to limited staff resources include: 

• Incomplete or inadequate assessments: With limited staff resources, auditors may not be able to conduct comprehensive assessments. This can result in incomplete or inadequate assessments that leave an organization without compliance certification. 

• High turnover: Limited staff resources can result in high turnover, as employees may find themselves overworked or burnt out. This can create gaps in compliance expertise and result in a loss of institutional knowledge. 

• Missed regulatory deadlines: When new regulatory compliance mandates emerge, a lack of staff resources may result in missed deadlines and compliance failures. 

If an organization has limited resources dedicated to their audit process, then it is a strong indication that their cybersecurity program is lacking, which in turn makes them more likely to fall victim to a cyberattack. 

Another major challenge for the audit process is the complexity of conducting multiple audits. Many organizations are subject to multiple compliance frameworks or regulations, each with their own specific requirements and reporting standards. Conducting audits across multiple frameworks can be complex and time-consuming, requiring significant staff resources and coordination. 

To effectively manage these challenges, organizations should once again consider streamlining their audit process by identifying areas of overlap to reduce duplication of efforts or investing in audit technology that automates compliance management. And of course, choosing the right audit service provider can go a long way in alleviating limited staff resources and the complexity of conducting multiple audits. 

Overcoming Challenges with Strategic Compliance 

The challenges associated with cybersecurity compliance can be significant, particularly when it comes to conducting audits and managing the overall compliance process. However, by streamlining compliance frameworks and leveraging automated compliance management platforms, organizations can take steps to address these challenges and improve their compliance posture.  

Consolidating audits and automating compliance processes can help reduce duplication, improve efficiency, and ensure that compliance requirements are being met consistently across the organization. Ultimately, investing in these strategies can help organizations to stay ahead of emerging threats and protect their sensitive data and systems against cyberattacks. 

Learn more about the most common cybersecurity compliance challenges and best practices for strategic compliance — Read A-LIGN’s 2023 Compliance Benchmark Report. 

As cyberattacks continue to grow and evolve, cybersecurity has become a top concern for organizations of all sizes and industries. One way that organizations can protect themselves and demonstrate their commitment to cybersecurity is by establishing and maintaining robust compliance programs. 

Compliance with recognized cybersecurity frameworks and standards can help organizations build trust with existing and potential customers and partners by demonstrating that they have implemented effective security controls to protect sensitive data and systems. 

In this blog, we will share statistics from A-LIGN’s 2023 Compliance Benchmark Report that demonstrate the benefits of using cybersecurity compliance as a competitive advantage. Read on for tips that will help you leverage compliance as a way to win new business. 

The Benefits of Cybersecurity Compliance 

One of the primary benefits of cybersecurity compliance is that it can help organizations improve their overall security posture. Compliance with cybersecurity frameworks can help organizations identify and address security weaknesses and vulnerabilities, reducing the risk of cyberattacks and data breaches. With the right assessments and certifications, organizations can establish effective security policies and procedures that can help prevent cyber incidents before they happen. 

Many industries are subject to legal and regulatory requirements related to cybersecurity. In these cases, compliance isn’t a nice-to-have, it is an obligation. Maintaining compliance helps organizations avoid potential legal or regulatory penalities or reputational damage resutling from non-compliance. 

Beyond regulatory requirements and basic security, compliance can also provide organizations with a competitive advantage in the marketplace. By demonstrating that they have implemented effective security controls, organizations can differentiate themselves from competitors who may not have implemented similar controls or who have experienced cybersecurity breaches in the past.  

With the right certifications and controls and a strategic plan for highlighting the value of compliance, organizations can win new business and expand their customer base. If two organizations are competing for a customer’s business, the one with a more robust compliance program is often viewed as the more trustworthy option. 

According A-LIGN’s research, the majority of organizations (72%) have conducted an audit or assessment to help win new business. Conversely, 29% of organizations have lost a new business deal because they were missing a compliance certification. This demonstrates that audits and assessments are an important aspect of the sales process since they can validate the effectiveness of an organization’s cybersecurity controls. 

Tips for Leveraging Cybersecurity Compliance as a Competitive Advantage 

There are numerous cybersecurity frameworks and standards to choose from, each with its own set of requirements and controls. It’s important for organizations to choose the framework that best aligns with their business needs and risk profile. Organizations should also consider the compliance requirements of their customers and partners. The A-LIGN 2023 Compliance Benchmark Report includes benchmarking data that can help organizations select the cybersecurity framework that is best suited for their industry. 

Cybersecurity compliance requires organizations to implement effective security controls. It’s important for organizations to take a risk-based approach to control implementation, focusing on the controls that are most critical to their business and risk profile. Organizations should also ensure that controls are regularly reviewed and updated to ensure their ongoing effectiveness. 

Most importantly, organizations should adopt strategic compliance initiatives, such as consolidating audits and auditors to save time and money. Implementing audit technology solutions, such as A-LIGN’s automated compliance management platform, A-SCEND, enables organizations to automate evidence collection and continuously monitor compliance to discover and remediate compliance risks. 

Cybersecurity compliance has become such a competitive advantage that the C-suite has taken notice. According to A-LIGN’s survey results, when asked about the driving force behind their compliance program, there was an even split between the desire to increase revenue/win new clients and a mandate from the board-level or C-suite. These results suggest that even at the highest level, organizations recognize that cybersecurity compliance is a competitive advantage. 

To learn more about the competitive advantages of strategic compliance, read A-LIGN’s 2023 Compliance Benchmark Report.