Gartner Says Data and Analytics Risks Are Audit Executives’ Prime Concerns for 2018
- Data governance: New data privacy regulations such as GDPR and high-profile breaches have expanded the compliance, financial and reputational risks of data usage and protection. Although data-driven business strategies are necessary to increase efficiency and competitiveness, only 37 percent of organizations have formal data governance frameworks in place.As the complexity and volume of data increases, companies should implement formal data governance frameworks to mitigate the risks caused by security threats and privacy issues. Companies can develop a framework by first creating an inventory of data assets across the business and establishing a data classification policy. In addition, they should review data analytics training and talent assessments.
- Third parties: As companies increasingly rely on partnerships for digital initiatives, they are expanding their reliance on third parties — and fourth and fifth parties, if not even more. This amplifies their exposure to operational and regulatory risk. Nearly 70 percent of CAEs report third-party risk as one of their top concerns, but many organizations still struggle to account for and manage it.To help mitigate this risk, organizations must increase visibility into the operations of third parties and strengthen their focus on third parties’ information security behaviors. Internal audit teams can help by evaluating third-party contracts and compliance efforts, as well as investigating regulatory requirements for third-party data handling.
- Data privacy: Although data can confer competitive advantages, recent high-profile security breaches show the negative impact of data privacy failures. In fact, data privacy is a top concern for organizations across the board.In response to GDPR enforcement uncertainty, companies must expedite implementation of GDPR mandates — such as transparency, consent and breach reporting — or risk regulatory fines and other sanctions. Organizations must also take steps to regain customers’ trust, or suffer a potential loss of customers. Gartner has predicted that more than half of companies affected by GDPR will not be in full compliance with it by the end of 2018.
“Data-related risks continue to evolve, and CAEs have a key role to play in helping companies implement clear frameworks and repeatable processes to navigate this ever-changing threat landscape,” said Mr. Murray.
In addition to data and analytics, other risk themes CAEs are watching closely for 2019 include IT vulnerabilities, risks stemming from cost and growth pressures, and the vastly shortened planning horizon that executives face.
Gartner creates its annual Audit Plan Hot Spots report by combining input from interviews and surveys from across its global network of client organizations and experts. Read more in the Audit Plan Hot Spots report. Gartner clients can find more information and download various related resources at Gartner’s Audit Leadership Council home page.
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The Gartner Audit Leadership Council helps audit directors and their teams build plans that drive results, strengthen department capabilities, and minimize exposure to fraud and risk. Learn more at https://www.gartner.com/en/risk-audit/audit-leaders.
