Security Spotlight: Enterprise Risk Assessments

The American Institute of Certified Public Accountants (AICPA) lays out many different criteria that are assessed when your organization undergoes the System and Organization Controls (SOC) 2 examination process. These criteria are designed to ensure that your organization has controls in place that support the security and any other in-scope categories of your SOC 2 such as availability, processing integrity, confidentiality, and/or privacy. By going through the SOC 2 process, your organization can attest to customers and business partners that these standards are upheld in your operations. However, it isn’t always clear how certain criteria fit into the bigger picture. This Security Spotlight outlines why an enterprise risk assessment is a key part of the SOC 2 examination.

Enterprise Risk Assessment

At its core, an enterprise risk assessment is a process that identifies risks to your organization, evaluates how the risks may impact the organization, and creates a response plan to ensure your organization is prepared to meet the risks. The process usually begins by gathering information about risks through surveys, interviews, meetings and workshops. Once risks have been identified, they can be analyzed and prioritized.

While traditional risk assessments often consider the impact a risk will have and the probability that the risk will occur, enterprise risk assessments have more depth. They can include factors such as how soon the risk will affect the organization, the influences one risk can have on others, and the impacts of a risk on the organization’s reputation.

With a thorough understanding of the risks your organization faces, you can plan for how to deal with each risk. Having risks ranked and well-understood by priority allows organization management to choose appropriate risk responses.

Enterprise Risk Assessment for SOC 2

A SOC 2 examination is a testament to your customers and business partners that your organization is taking responsibility for its security. By taking the time to identify, prioritize and mitigate the risks your organization faces, it becomes much easier to assert that your organization is in control of potential liabilities. Enterprise risk assessments allow management to use resources wisely and minimize preventable obstacles.  

For large organizations with dedicated Enterprise Risk Management (ERM) teams, the risk assessment process may be done frequently and thoroughly. For very small organizations, an enterprise risk assessment may take place annually. Organizations of all sizes may call on a third party to help them through the process. Regardless of size, having documentation of an enterprise risk assessment can be very helpful when preparing your organization for a SOC 2 examination.

Helping You Get There…

Every organization has unique needs. Boulay’s risk assessment and SOC 2 reporting services are customized to fit the needs of your organization. To learn more about performing a risk assessment or preparing for a SOC 2 examination, connect with a member of our Risk Advisory Team today.