The process of IT auditing is constantly changing, being driven by technological developments and regulatory changes. The importance of data security and privacy only continues to grow, especially in maintaining the confidentiality, integrity and availability of an organization’s data.
Midway through 2024, key trends in IT auditing continue to expand from previous years or have emerged in the IT auditing landscape. IT auditors must stay updated and adapt to new trends, technologies, threats and changes in regulations to ensure they can effectively manage risks, ensure compliance, and add value to the organization.
1. Artificial Intelligence and Machine Learning
The revolution of Artificial Intelligence (AI) and Machine Learning (ML) is having an immense effect on different industries, and IT auditing is no exception. In 2024, we continue to see a significant increase in the use of AI and ML for automating routine audit tasks, such as data analysis, anomaly detection, and risk assessment. AI and ML possess the ability to process extensive amounts of data faster and more accurately than humans, allowing IT auditors to focus on strategic activities. The integration of AI and ML in IT auditing can enhance predictive analytics capabilities, which provides an opportunity to identify potential issues before they become significant problems.
From the standpoint of auditing AI and ML systems it involves evaluating the robustness of these technologies and their ability to handle potential threats and vulnerabilities. Key aspects for auditing include ensuring data integrity, securing training data, and protecting against adversarial attacks. IT auditors must verify that proper access controls, encryption methods, and anomaly detection systems are in place to safeguard sensitive data and model integrity. In addition, it's crucial to assess the AI systems for biases that could lead to security vulnerabilities or ethical issues, and to ensure compliance with relevant regulations and standards. Regularly updating and patching these systems, along with continuous monitoring, is essential to protect against evolving threats and maintain the reliability and trustworthiness of AI and ML applications.
2. Emphasis on Cybersecurity
Unfortunately, cyberattacks frequency and level of sophistication continue to increase, making cybersecurity a top priority for organizations worldwide. The most common type of cybersecurity compromises, ransomware attacks, phishing schemes, and the exploitation of vulnerabilities in cloud computing environments, account for millions in direct financial losses, not to mention the indirect costs such as loss of customer trust and brand reputation. Ransomware attacks alone are projected to cost organizations globally over $20 billion in 2024. Similarly, phishing and cloud vulnerabilities continue to rack up costs as companies deal with the consequences of successful attacks.
In 2024, IT auditors will need to place even greater emphasis on evaluating and strengthening the organization's cybersecurity posture. It is vital that IT auditors stay informed on the latest cybersecurity threats and trends by periodically assessing the effectiveness of security controls, reviewing incident response plans, and ensuring compliance with emerging cybersecurity regulations. Additionally, they should be familiar with frameworks like the NIST Cybersecurity Framework and ISO 27001, which provide guidelines for managing and mitigating cybersecurity risks.
3. Data Privacy and Protection
In 2024, IT auditors will need to focus on ensuring that organizations comply, depending on the organization’s jurisdiction, with existing data privacy regulations, such as the General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and the Virginia Consumer Data Protection Act (VCDPA); and, emerging data privacy laws, such as, Florida Digital Bill of Rights (FDBOR), the Oregon Consumer Data Privacy Act (OCPA), and the Texas Data Privacy and Security Act (TDPSA).
Data privacy regulations have set high standards for data privacy and protection, resulting in auditing data collection, storage, and processing practices to ensure they align with regulatory requirements. As part of the IT audit review, an assessment on the effectiveness of data protection measures, such as encryption, access controls, and data loss prevention (DLP) solutions, needs to be performed. IT auditors must ensure that organizations are not only compliant with their regulatory requirements but are also promoting a culture of privacy and trust.
4. Cloud Computing and Third-Party Risks
Cloud computing provides organizations with increased flexibility, scalability, and cost savings. However, it also introduces new risks that IT auditors must address. IT auditors will need to focus on evaluating the security and compliance of cloud service providers (CSPs) and ensuring that appropriate security controls are in place to protect sensitive data.
Third-party risk management will also be a critical area of focus. As organizations increasingly rely on third-party vendors for various services, IT auditors must assess the risks associated with these relationships. Conducting thorough due diligence on vendors, reviewing their security practices, and ensuring they comply with relevant regulations and contractual obligations, must be at the top of the list when assessing third-party vendors relationships.
5. Blockchain and Distributed Ledger Technology
Blockchain technology is a decentralized digital ledger that records transactions across a network of computers, ensuring transparency, security, and immutability. In the other hand, a distributed ledger technology (DLT) is a digital system that allows multiple parties to share and update a common database in a decentralized way. Both technologies are gaining traction across various industries, offering enhanced transparency, security, and efficiency. IT auditors should familiarize themselves with the basics of blockchain and DLT technologies to effectively evaluate the risks and controls associated with its implementation.
Key risks associated with blockchain and DLT include security vulnerabilities, such as the 51% attack, where a single entity gains control over the majority of the network's mining power, enabling them to manipulate transactions. Other risks include the potential for smart contract bugs, which can lead to unintended financial losses, and privacy concerns, as transaction data, although pseudonymous, is permanently recorded on the blockchain. To address these risks, IT auditors must guide organizations in implementing comprehensive controls that include rigorous code audits for smart contracts, multi-signature wallets to enhance security, and continuous monitoring of the blockchain network for unusual activities. Also, the adoption of cryptographic techniques, such as zero-knowledge proofs, can help protect sensitive data while maintaining transparency. Compliance with relevant regulatory frameworks and industry standards is crucial to mitigate legal and operational risks associated with blockchain and DLT deployments.
6. Emphasis on Governance, Risk, and Compliance (GRC)
Effective governance, risk management, and compliance (GRC) are critical components of a robust IT audit program. A greater emphasis on integrating GRC practices into their overall audit strategy is a pattern that will continue to grow in 2024. IT auditors will need to ensure that GRC frameworks are aligned with organizational objectives and that risk management processes are effective in identifying and mitigating risks. Implementing a robust GRC strategy can significantly reduce legal liabilities and improve operational efficiency.
Collaboration between IT auditors and other stakeholders, such as risk managers, compliance officers, and executive leadership is needed to ensure a comprehensive and cohesive approach to managing risks and achieving compliance. As 2024 progresses, we will see an increased complexity in the technology landscape, new challenges in understanding and controlling critical IT assets, along with continuous changes in the threat landscape and in compliance requirements.
7. Continuous Auditing and Monitoring
Traditional audit approaches, which often involve periodic reviews, requesting supporting evidence and conducting field testing, are becoming less effective in the current IT environment. Continuous auditing and monitoring are emerging as essential practices for identifying and addressing risks in real-time. IT auditors will need to step up their game by leveraging technology that includes continuous monitoring and collects real-time data about the effectiveness of controls and the compliance status.
The integration of automated tools that continuously analyze data, generate alerts for potential issues, and provide dashboards for real-time reporting, can enable organizations to respond more quickly in the face of emerging risks and ensure the effectiveness of established controls. Integrating artificial intelligence and machine learning technologies into automated auditing and monitoring solutions can allow organizations to maintain a proactive approach to IT security and governance, reduce the likelihood of significant disruptions and enhance overall operational resilience.
Conclusion
Moving forward into 2024 and future years, IT auditors must stay informed about the latest trends and technologies. The IT industry will only continue to change and bring additional challenges, some of them still unknown. It is of foremost importance to add new approaches, skills and technologies to the IT auditor’s toolbox to effectively manage risks, ensure compliance, and add value to organizations. Adopting AI and ML technologies, focusing on cybersecurity and data privacy, addressing cloud and third-party risks, understanding blockchain, enhancing GRC practices, and adopting continuous auditing solutions will enable IT auditors to support organizations attain an effective risk management strategy with a robust security posture in a compliant state.