Thu, Mar 30, 2023

Data Security and Internal Controls

In today’s digital age, breaches in data security from cyberattacks have become more prevalent and sophisticated, causing significant financial losses for companies. It is essential to prioritize data security to protect sensitive assets from cyber threats. Businesses of all sizes should take proactive measures to safeguard against cyberattacks and digital security threats to ensure the long-term sustainability of their operations.

For companies handling sensitive data, it is crucial to have data security integration with their internal control environment as part of their overall data security framework. This integration provides safeguards to ensure that sensitive data remains protected and to minimize the chances of a privacy breach. Establishing unambiguous data protection policies and procedures, deploying encryption technology and access controls, and routinely evaluating data security measures are essential steps for companies to effectively safeguard their sensitive data against cyber threats.

As technology continues to evolve, data security concerns have become increasingly important for organizations. At its core, data security is focused on protecting data from unauthorized access or use. To be fully effective, risk management and audit professionals must understand the internal controls around data security.

Data Security Risks

Countless data security risks can affect organizations online. Without careful management, they can grow beyond control. The potential impacts of various risks related to IT infrastructure, data breaches and cyber threats require proactive and effective planning for prevention. Several data security risks touching various aspects of corporate governance exist and include:

  • Ransomware
  • Third-party vendors
  • Budgets

To manage these and other forms of data security risks, companies should focus on identifying and mitigating the smaller risks that lead to larger risks. Managing these risks requires a robust internal control environment, which is a crucial component of a successful corporate risk management strategy.

Integrating Data Security With the Internal Control Environment

Data security often requires companies to comply with multiple standards and regulations across various industries. This means taking a multilevel and multistandard approach to ensure privacy and security. In other words, it means companies need to have data security integration across their organizations.

Companies can integrate data security with their internal control environment by establishing clear data protection policies and procedures. Such policies should outline the company’s approach to safeguarding sensitive data and provide guidelines on who can access and handle the data. This helps to ensure that employees and other authorized users are aware of their responsibilities and obligations when handling sensitive data.

Data security measures must be aligned with the company’s internal control environment. This can be achieved through regular assessments of data security measures to identify any weaknesses or areas of improvement. By doing so, the company can develop effective strategies to mitigate risks and enhance data security.

Best Practices

Data security best practices aim to provide data confidentiality, integrity and availability by implementing appropriate measures, policies and procedures. The ultimate goal of data security is to protect sensitive and valuable data from potential threats, such as cyberattacks, unauthorized access, theft or loss. By ensuring the security of data and data systems, companies can mitigate the risks and maintain trust with their clients and stakeholders.

Expertise and Insights of Risk Management and Audit Professionals

Expertise is crucial in addressing various data security issues and challenges, such as risk management, incident response planning, third-party risk management and compliance reporting. Complementing this expertise is the use of compliance management software, which can simplify the process and make sure nothing is missed.

Establish a Data Security Framework

A data security framework outlines the policies, procedures and processes for managing risks, threats and vulnerabilities. The framework should be tailored to meet the specific needs of the company and should be regularly updated to reflect the changing threat landscape.

Implement Access Controls

Access controls prevent unauthorized access to sensitive data. They can include password policies, multifactor authentication and role-based access controls. Regular security awareness training for employees can also help to reinforce the importance of access controls and security practices.


Encryption converts data into a coded language that can only be deciphered with a specific key. Implementing encryption for sensitive data in transit and at rest can significantly reduce the risk of data breaches.

Regular Testing

Regular vulnerability assessments and penetration testing can also help identify potential weaknesses in an organization’s systems and applications. Identifying these vulnerabilities enables a company to take proactive measures to remediate issues before they can be exploited.

Plan Ahead

Disaster recovery and business continuity planning outline the processes and procedures for recovering critical systems and data in the event of a cyberattack or disaster. Regular testing of these plans can help ensure their effectiveness and identify areas for improvement.

Best Practices Lead the Way

By following these best practices, organizations can proactively manage risks and protect sensitive data from cyber threats. When information security is prioritized, organizations can minimize exposure to risks from external threats, operate with confidence, and ensure the longevity and success of their operations.

A Data Security Toolbox

Data security is imperative to companies. Effective data security tools are a crucial part of data security that cannot be overlooked. The following are some tools that can help companies establish clear guidelines for backing up, storing and securing organizational data.


Of the many policies that fit with data security, three stand out:

  • IT Data Management Policy: This policy can be used to enable the prompt recovery of vital company data in the event of data loss, corruption or destruction. It ensures the continuity or prompt resumption of critical information system processing functions and the completeness and accuracy of information.
  • Separation of Duties Policy: This policy sets forth guidelines for implementing separation of duties to safeguard a company’s information assets. It applies to all information systems administrators, including those who manage platforms, LANs, client/server systems and email systems.
  • Building and Data Center Physical Security Policy: This policy can be used to maintain the security of company buildings and data centers. It outlines the acceptable practices for planning, managing and implementing a company’s physical security measures.

Data Security Templates and Guides

Effective templates and guides are critical for policies to be carried out according to prescribed methods. Here are two examples:

  • Risk Control Matrix (RCM). The RCM is both a guide and a template that emphasizes the importance of incorporating risk-oriented internal controls, which can be automated or manual, depending on the specific situation.
  • Data Migration Strategy Guide. This guide assists auditors in successfully executing a data migration project and provides a detailed plan and documentation to ensure transparency throughout the data migration process.

By using data security tools, companies can refine their policies and improve their data security procedures, ensuring the continuity of critical information system processing functions, the accuracy of processed information, and the restoration of network server files and nonapplication data.

IT Data Management Policy: Critical for Data Security Programs

A strong IT data policy is critical for maintaining a robust data security program. The IT Data Management Policy tool provides two sample policies that can enable the prompt recovery of vital company data in the event of data loss, corruption or destruction. The tool ensures the continuity or prompt resumption of critical information system processing functions and the completeness and accuracy of information. Critically, the tool enables the restoration of network server files and nonapplication data.

Compliance with relevant laws and regulations — and alignment with the company’s mission and values — is crucial when developing policies. By using this tool, companies can create a customized policy that suits their unique needs and requirements. A well-written and implemented company policy can help protect sensitive information, reduce the risk of data breaches and ensure business continuity.

Wrapping Up

By investing in these measures, organizations can mitigate cyber threats and safeguard their data, avoiding costly data breaches and maintaining their customers’ trust. Companies should prioritize data security and adopt a comprehensive IT data management policy to ensure that their information is protected.