Conducting an efficient internal audit is an excellent way of uncovering new threats. There are unique risks that emerge every day. Internal audits check the integrity of internal controls set in place to mitigate risks. It is essential to conduct a thorough internal review just before external auditors and deal with the emerging issues. External auditors are bound to report any problems as findings in their final report. The most critical role of internal audits is to ensure the company maintains a healthy posture against cybersecurity. The data that manufacturing companies have can be desirable to malicious parties.
The Importance of an Internal Audit Checklist
An internal audit checklist will enable a company to conduct audits efficiently and effectively. The checklist lists all the essential matters that cover the cybersecurity of a manufacturing company. You are sure that no aspect will be left out if you keep to the list.
Manufacturing Company Internal Audit Checklist
Regulatory Standards
Several regulatory standards cover the manufacturing industry. To conduct an effective internal audit, a company must be on par with the current regulation. These regulations are meant to ensure manufacturing companies are safe from cybercriminals. It is in the best interest of the company to adopt the regulatory guidelines. These regulatory standards affecting manufacturing companies include the following.
1. ISO 9001
International Organization for Standardization (ISO) seeks to standardize both product and service industries to provide high-quality outputs. ISO 9001 stipulates the need and purpose of a quality management system in a manufacturing company. It states the procedures, processes, documentation, and responsibilities of the system. The audit requirements include the review of the process, products, and the system itself. Documenting is a critical element in the audit process. The documentation of procedures, monitoring, internal audit procedures, corrective actions, and preventive measures act as proof that the internal controls are working efficiently.
2. ISO/IEC 27001:2013
The standard is risk-based that allows a level of flexibility whereby companies can select a suitable approach to cybersecurity. The controls suggestions offer a unique opportunity to transfer, avoid, or accept risks. The standard does not require manufacturing companies to mitigate all the risks the company faces. Annex A of the standard stipulates a list of controls that companies can select for and implement to fortify the cybersecurity posture of the company.
Regulatory Compliance Requirements
Several compliances manufacturing companies have to meet to keep privilege information safe. It is vital for a manufacturing company to find out whether it falls under any of the following regulations.
1. Internal Traffic in Arms Regulation (ITAR)
The ITAR regulates products and software that can be useful to the military. The regulation covers software, blueprint, new technologies, and some design upgrades. Plans for things like military grade jets, cryptography, and technology about satellites.
2. Defense Federal Acquisition Regulation Supplement (DFARS)
The regulation applies to companies doing business with the US government. The law seeks to keep transfer of data about federal contracts. The DFARS has a set of minimum requirements that each contractor should meet. There are rules and guidelines on how to be compliant with the DFARS regulations.
The Steps for an Internal Audit in a Manufacturing Company
Once a manufacturing company understands the standards and regulations it has to be compliant with, it can conduct an internal review. It is essential to document all the procedures and processes that occur in an audit for reference purposes. A thorough internal review acts as a “trial run” for an impending external audit. The examination should confirm the controls that work, those that need upgrading and obsolete controls. Also, the check will reveal the correct cybersecurity posture of the company. The following steps play a crucial role in internal audit.
1. Identify the Subject Matter Experts (SMEs)
Identify the stakeholders in the manufacturing company that can contribute to making internal audit effectiveness. It is good to establish communication channels between audit experts and the various stakeholders of the company.
2. Continuous Testing and Monitoring of Internal Controls
An internal audit is the best time to test the strength of internal controls against cybercrime. Testing internal controls can uncover some weaknesses that need updating due to changes in technology. Continuous monitoring is essential to identify new threats. Documenting the monitoring process is an excellent way of keeping records for future use in evaluations.
3. Generate Relevant Reports
Generating regular reports on the effectiveness of internal controls can be reassuring for the board of directors and the management. The reports should include recommendations for the necessary changes if any. A good report should explain in-depth the preventive actions, audit procedures, and the monitoring process.
4. Create an Internal Audit Workflow
An audit workflow has a schedule of audits, the procedures for preparation, reviewing, and responding to internal audits. An official communication before, during, and after an inspection ensures that everyone follows protocols.
