The study on internal security auditing, published this week by PriceWaterhouseCoopers, offers a look at the impact of internal security auditing procedures.
According to the study, more than 1,037 publicly reported incidents of loss, theft, or exposure of personally identifiable information were recorded in 2011, according to Open Security Foundation/DataLossDB.org.
"Companies must therefore deploy an ever-more robust defense strategy by constructing three lines of defense, with internal audit playing a critical role in providing assurance around data security and privacy controls and practices," the whitepaper says.
"Despite all the attention around data security, the risk of breaches is only getting worse with severe ramifications, not only in terms of dollar costs, but also management attention and company reputation," said Dean Simone, leader of PwC's U.S. risk assurance practice.
"To battle the ever-changing hacker profiles and accelerating rate of technological change, companies need to constantly re-evaluate their privacy and security plans," Simone says. "No company, no matter how well it has secured its data, is ever finished maintaining information security and privacy, but by establishing three lines of defense involving internal audit, they are putting in place the best safeguards to deal with critical risks to a business."
As data thieves become even more inventive, corporate policies, procedures, tools, training, and compliance efforts have not kept up, according to the study. In some instances, PwC found that some security capabilities have actually diminished over the past three years.
In 2011, 39 percent of nearly 10,000 executives in 138 countries said they reviewed their privacy policies annually, compared to 52 percent in 2009, the study says. Only 41 percent had an identity management strategy in 2011, a decrease from 48 percent in 2009.
According to the whitepaper, government bodies are increasing the penalties they impose on companies whose security flaws allow data breaches. At least 50 countries have enacted data privacy laws, and more are expected to follow.
"No matter how strong a company's data security policies and controls are, a company won't really know the adequacy of its defense if it doesn't continually verify that those defenses are sound, uncompromised and applied in a consistent manner," said Jason Pett, PwC's U.S. internal audit services leader. "Internal audit has to play a far more substantial role in information security, and audit committees must also increase their attention on the increasing risk."
To combat the ever-increasing attacks on their data or any critical risk to the business,companies must improve security management, risk management and compliance, and internal audit functions, the study says.
"Keeping the audit committee apprised of emerging risks and effective ways to address them is a critical role of internal audit, and they must stay ahead of the threat curve," Pett said.
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