You know it’s coming. The annual third-party audit looms ahead, and you’ve got a million things to do before the auditors arrive. Don’t panic! With a solid audit preparation plan, you can tackle the necessary steps efficiently and effectively.
In this blog, we’ll walk through best practices for getting audit-ready, from getting your documentation together to prepping your team. We’ll share insider tips to help you approach your next audit with confidence, sail through with flying colors, and get back to business as usual.
But first…
What Are Third-Party Audits?
A third-party audit is an assessment of a company’s internal controls, security practices, or compliance processes conducted by an independent auditing firm. The auditors will evaluate how well you meet industry standards or regulatory requirements. Third-party audit reports are important for building trust and credibility with your customers and business partners.
Why Do Companies Need Third-Party Audits?
Companies pursue third-party audits for a few key reasons:
- Compliance: To demonstrate you meet framework requirements in your industry like ISO 27001 or SOC 2. Non-compliance can lead to major fines and damage to your reputation.
- Security: To validate your information security controls and ensure sensitive data and systems are properly protected. This is important for any company that handles customer information or intellectual property.
- Trust and credibility: Completing an audit from a reputable firm signifies to customers and partners that you operate with integrity and have strong controls in place. This can help win new business and strengthen existing relationships.
- Process improvements: The audit process often identifies areas for improvement in your internal controls, security procedures, risk management, and governance. Implementing recommended changes will make your company stronger and better equipped to pass future audits.
Types of Third-Party Audits
Some of the most common types of audits for SaaS and technology companies include:
- SOC 2: A SOC 2 audit evaluates security, availability, processing integrity, confidentiality, and privacy controls and is required by many companies to do business.
- ISO 27001: An ISO 27001 audit assesses information security management systems and controls and is the globally recognized standard for information security.
- PCI DSS: A PCI DSS audit validates compliance with payment card data security standards and is required for any company that processes credit card payments.
Checklist for Preparing for Your Next Third-Party Compliance Audit
Put Together a Dedicated Audit Team
Appoint key staff from across your organization to a dedicated audit team. Include representatives from IT, compliance, risk management, HR, and any operational areas relevant to your audit scope. This team will help ensure all necessary documents, controls, and processes are ready for the auditors’ review.
Review the Compliance Framework and Audit Scope
Carefully review the specific compliance framework, like SOC 2 or ISO 27001, to understand exactly what controls and processes the auditors will be assessing. For example, if undergoing a SOC 2 audit, ensure you understand the applicable trust services criteria. The audit scope will specify which systems, applications, and environments will be in scope. Ensure all teams involved understand what is in scope for the audit.
Conduct a Pre-Audit Assessment
Do an internal assessment to identify any gaps or weaknesses before the official audit. Review policies, procedures, logs, and documentation to verify they meet the necessary compliance requirements. Make any needed changes to ensure you are audit-ready.
Prepare Documentation
Compile all documentation that demonstrates your compliance with the audit requirements. Have digital copies of policies, standards, processes, training materials, logs, screenshots, and more, readily available. Ensure all documentation is current, approved, and consistent.
Educate Employees
Employees should understand their role in maintaining compliance and be prepared to answer auditor questions. Provide compliance training and communicate what employees can expect during the audit. Let them know auditors may interview them or ask for system access.
Test Key Controls and Processes
Validate that key controls and processes are functioning as intended and meeting compliance requirements. Interview employees, observe daily operations, review system reports, and analyze other data to confirm proper control performance. Make any necessary changes before the audit to remediate issues. Be prepared to provide auditors with evidence that controls were tested and effective.
What to Expect During the Third-Party Audit Process
Pre-Audit Phase: Preparation is Key
The pre-audit phase involves all the above points, where you gather all the necessary documentation to prove your compliance with the relevant framework. Auditors will review policies, procedures, controls, and other records to ensure you have the proper documentation in place. They will want to see evidence that policies and procedures are being followed, so be ready to provide specific examples and data to support your claims.
Audit Kick-off: Show, Don’t Just Tell
During the audit, auditors will conduct interviews, observe processes, and review additional documentation. They will want to see your controls and procedures in action. Auditors may ask basic questions to verify that your staff understand their role in compliance, or more complex questions to test the depth of knowledge. Show the auditors real-world examples of how you follow the policies and controls outlined in your documentation.
Audit Findings: Look for Opportunities to Improve
After the audit, auditors will prepare and present their findings. This may include observations, opportunities for improvement, or corrective actions needed to achieve compliance. Look at the findings as an opportunity to strengthen your compliance program. Even if no major issues were identified, there are always ways to improve. Discuss the findings with your team and develop a plan to remediate any problems and build on your success.
Get Audit-Ready Successfully the First Time with Scytale
Going through a third-party audit can be stressful, but it doesn’t have to be. Using Scytale’s compliance automation software and expert compliance team makes the above steps totally manageable for getting audit-ready for compliance frameworks like SOC 2, ISO 27001, and others.
Scytale’s software has features like document management, workflow automation, and risk assessment tools to compile and review all audit evidence, significantly reducing manual effort and chances of human error, giving your auditors one centralized source for all compliance data.
Some of Scytale’s key platform features that will get you ready for your auditors (and fast) include:
Automated Evidence Collection
Rather than sifting through disorganized files, Scytale digitizes and centralizes all audit evidence in one place. Upload policy documents, process documentation, access controls, and any other relevant materials. Give auditors role-based access so they can review evidence for specific control objectives.
Built-In Audit
Scytale’s Built-In Audit simplifies the often daunting task of finding a qualified auditor for your security audit. By leveraging Scytale’s network of experienced auditors, Scytale will pair you with an auditor best suited to your company’s industry, size, and specific compliance requirements. Plus, all communication between you and the auditor is streamlined within the platform. This includes all evidence collection, exchanging documents, addressing queries, and providing status updates. By centralizing communication, Scytale ensures that both parties are aligned on audit objectives and timelines.
Risk Assessment
Scytale offers a simplified yet comprehensive approach to identifying and remediating security gaps through a structured risk assessment process. By using our platform, your company can proactively address potential vulnerabilities and enhance your overall security posture.
Streamlined Workflows
Scytale establishes automated workflows to keep your audit preparation on schedule. Set deadlines for control owners to submit self-assessments, evidence, and remediation plans. Send automated reminders as deadlines approach. Use workflows to route assessments and evidence through review and approval cycles. These types of workflows minimize bottlenecks, keep all parties aligned, and ensure milestones are met leading up to the audit.
So there you have it – the key steps for getting audit-ready and setting your company up for success when the auditors come knocking. By having your policies, processes, and controls in order, gathering the right documentation, and training your teams, you’ll breeze through your audit with no major hiccups.
Remember, audits don’t have to be dreaded events if you prepare properly.
Leverage tools like Scytale to automate compliance evidence gathering and get organized ahead of time. With the right prep work, your next audit can be a valuable opportunity to improve – not just a stressful box to check. Stay cool, stay compliant, and you’ll be audit-ready in no time.
See how Scytale’s customers have passed their audits stress-free here.
