Vendor Audit Process
Vendor audits are quickly becoming a best practice across industries given significant third-party risks in data privacy, cybersecurity, corruption and other areas. Clarip assists with this process by helping organizations build greater internal understanding of the information that it is sharing with its third-party vendors through the Data Risk Intelligence scans.
What is a vendor audit?
A vendor audit is used by organizations to evaluate a third-party hired by the organization. An audit can look at a number of different issues, such as the organization’s quality control, its costs vs. benefits, its cybersecurity protection, or other aspects.
In the privacy context, third-party vendor risk management is becoming an area that businesses are enhancing. The Cambridge Analytica scandal has put third-party data sharing front and center in the eyes of regulators and the media. Organizations that are only looking at their own practices and are not evaluating their vendor data practices are missing a key area of concern.
What are the Benefits and Costs of a Vendor Audit?
An organization’s efforts to oversee vendors can be expensive, time-consuming and difficult. At the highest levels, it would require site visits, internal document review and interviews of key vendor stakeholders.
However, vendor management can occur at a number of levels and organizations may decide that their concerns can be satisfied with a lower level of scrutiny. Some organizations may decide that the risk with a vendor is minimal based on their activities within the organization and a questionnaire sent to the third-party vendor for response may be sufficient to gain the clarity that it needs to continue its relationship with them.
Notwithstanding the efforts that can be required to understake vendor management, organizations may not be able to avoid enhanced efforts in this area. Facebook may have avoided significant regulatory and media scrutiny over the past year if it had engaged in more substantial efforts in vendor risk management. As vendors are asked to do more for organizations, or third-parties are provided with significant data, the oversight on them needs to correlate to the risks. Yet, as Cambridge Analytica shows, even small organizations can cause significant problems for a large organization.
What may occur as part of the vendor audit process?
In general, vendor audits may include some or all of the following:
– Review of the third-party’s books and records.
– Data analysis on transactions and records.
– Sampling of high risk transactions.
– Phone or In-Person interviews with third-party personnel.
– Vendor questionnaires.
– Site visits.
– Review of contracts, policies and other documents.
– Documentation of findings and any correction plans.
Effective Vendor Management Process Balancing
The amount of time and resources that should be put into a vendor audit depends in large part on the risks that a third-party may pose within the organization. If a service provider has minimal access to data (in the privacy context), then it may warrant a lower level of scrutiny.
How Does Clarip Help with Vendor Audits?
Many organizations do not have sufficient insight into their data sharing with their third-party vendors. Clarip systems help with the identification of service providers for an organization. Additionally, information from the Data Risk Intelligence scans can be used in the identification of the level of data sharing that is happening with an organization so that an internal decision can be made about the appropriate level of vendor scrutiny.
Contact Clarip Today for Help with CCPA and GPDR
The Clarip team and data privacy software are prepared to help your organization improve its privacy practices. Click here to contact us (return messages within 24 hours) or call 1-888-252-5653 to schedule a demo or speak to a member of the Clarip team.
If your challenge right now is CCPA compliance for your California operations, allow us to show you our CCPA software. From consent management software to offer the option to opt-out of the sale of personal data, to a powerful DSAR Portal to facilitate the right to access and delete, Clarip offers enterprise privacy management at an affordable price.
If you are preparing your European operations for GDPR compliance, we can help through our modular GDPR software. Whether you are looking to start the process with GDPR data mapping software, increase automation in your privacy program with DPIA software, or handle ePrivacy with a cookie consent manager, Clarip has the privacy platform that you need to bolster your program.
Click here to contact us (return messages within 24 hours) or call 1-888-252-5653 to schedule a demo and speak to a member of the Clarip team.
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Service Providers and the CCPA Right to Opt Out
GDPR Data Processing Agreement under Article 28
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Differences between a GDPR Data Controller vs. Data Processor