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Weaknesses of internal controls

Here’s what you need to know.

Cloud Security
Image: RealProtect.net

Control weaknesses stem from the inability of an organization to effectively implement its internal controls. Malicious individuals can take advantage of such a situation to bypass even the most seemingly watertight security measures.

The growing implementation of internal controls, the emergence of new technologies, and the incredible rate with which malware is evolving necessitate the need for closer data security control monitoring. In doing so, it will be easier for organizations to evaluate the effectiveness of internal controls that they have in place. Similarly, it will help expose weaknesses in these controls.

Internal Control Weaknesses: What Are They?

Before you even start thinking about what internal control weaknesses are, you first need to ask yourself what data security control is. Basically, data security control entails keeping sensitive data safe by implementing measures against unauthorized access. Such measures guide risk management programs by helping to counteract, detect, minimize, or avoid the typical security risks that computer systems, data, software, and networks face.

These measures may include technical controls, architectural controls, administrative controls, and operational controls. Besides, controls can be streamlined to be detective, corrective, compensatory, or preventative in nature. Data security control processes protect organizations by providing credible financial reporting as mandated by various regulatory bodies and industry standards that pertain to capital, investment, and credit risks.

For instance, Sarbanes-Oxley Act of 2002 (SOX) section 404 requires yearly proof that companies truthfully report their financial statements and procedures to ensure effective fraud mitigation. Similarly, companies are required to prove that they have addressed any uncertainties related to financial aspects such as stocks.

What Are Technical Control Weaknesses?

Technical security control focuses on both hardware and software. Weaknesses in an organization’s technical control framework typically arise from alterations in technology, or configuration and maintenance failures. The “Heartbleed” Vulnerability report of 2014 highlighted the common technical control weaknesses in SSL, which expose data to malicious actors.

Operational Control Weaknesses

Operational Security (OPSEC) entails monitoring operations in view of implementing a risk management program. Typically, operational control weaknesses result from human error. When individuals mandated to conduct operations fail to abide by established policies and standards, an organization’s operational controls get weakened.

Incident response is a time-sensitive operational control. You will only realize its peak effectiveness by ensuring rapid intervention. When the interval between an incident and the necessary invention increases, the efficacy of incidence response equally reduces.

What is an Administrative Control Weakness?

Also known as procedural controls, administrative security controls involve consistent failure to streamline daily operations to established regulations. A scheduled backup routine is a significant procedural control that pertains to disaster recovery. Failure to ascertain the viability and integrity of backups exposes an organization to the ever-looming risk of media degradation. In such a situation, it will be difficult for the organization to recover from the catastrophic outcomes of human error fully.

Architectural Control Weaknesses

Generally, security architecture entails creating an integrated framework that highlights and addresses risks that arise within an organization’s integrated IT environment. Weaknesses in either documentation or design are detrimental to the organization’s security structure foundation.

Unforeseen hardware replacement is more prevalent in organizations that are more prone to architectural control weaknesses. This arises due to the circumvention of the regular change management process. These replacements are often urgent, something that creates a window for missed patches, configuration irregularities, and other forms of implementation oversights.

How Risk Management Supports Internal Controls

The inherent values of GRC focus on clarifying risks so that an organization can comply with standards and regulations while consistently monitoring to ascertain that all processes work. Efficient corporate risk management entails creating a structure that supports procedures that protect an organization’s resources and assets.

Contrary to what many people think, risk management isn’t a one-off undertaking. Implemented controls need to evolve with the evolution of the threat landscape. Malicious actors often modify their tactics. This highlights the significance of maintaining peak effectiveness since it makes it easier to reassess risks throughout an organization’s information system life cycle.

The Importance of Consistently Monitoring Internal Controls

Continuous monitoring of internal controls provides organizations with real-time insights on vulnerabilities and threats that they face. Although malicious actors evolve malware and ransomware continuously to avoid dedication, consistent monitoring helps the management team to adequately respond to threats that can negatively affect an organization’s business and risk assessment processes.

The continuous monitoring of internal controls requires you to leverage internal audit and ongoing activities. This will ensure that your organization embeds all its procedures within its operational setup. For instance, these detective measures can help internal analysts to evaluate operational effectiveness.

Automation can go a long way in reducing the burden of continuous monitoring. As an organization scales, the number of internal controls that need to be monitored also grows. Technology use will undoubtedly increase the overlap between different control types. For instance, cloud migration has made unauthorized access both an IT and operational risk.

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