Technology Risk Assurance

Technology is an essential part of our lives today and where very few can actually live without them, most of us are got a mini heart attack on the days all three lights of our Wi-Fi modem are not blinking. It is a given fact that we have achieved a lot today with the help of technology and with the development and innovations; it also gives us more freedom and choices to explore, however one cannot ignore the risk factors technology brings along with it. Innovations such as social media with the help of which you can connect to anyone globally, digital platforms and cloud computing has made our lives so much easier and at times we fail to fathom how our ancestors use to live without having these perks of 21st century by their side, but to think of it holistically, technology and advancement in the field has also increased threats around data governance and cyber security and has thus increased the importance and need of effective technology risk management and its assurance.

Having a well thought mechanism for proactively identifying and evaluating risks is a key requirement for a well-managed organization. Ideally having a risk assurance team should sit in the first line of defence because technology risk forms a critical component of an organization’s risk profile, but as a matter of fact, it is overlooked and ignored more often that it should be, which at most of the time is because of lack of understanding of technology risks or may be because the anticipated risks are not mentioned in the conventional risk registers of the organization or business.

Why Technology Risk Assurance needed?

Today almost every organization is working its best towards dealing with prevailing electronic risks and is revolutionizing the way they do business using latest innovations. Apart from making healthy changes in the way of working, companies in the United Kingdom are also working on building a strong team of specialists because the same business models that have served clients well for decades are now being disrupted or destroyed due to speed of digital disruption, has also increased the cyber threats and the need for having a regulated scrutiny on technology risks.

Also Read: Risk Assessment Training

In today’s global world where everyone is competing against themselves in order to reach heights, it has become imperative for the organizations and businesses to expand globally and the only way to integrate the existing business process globally is by increasing electronic muscles to the organization. Adding on to the electronic infrastructure had been and continues to be the only key enabler in gaining competitive advantages over its peers and competitors. However, where the organizations are on the constant lookout for the ways to build on to its existing electronic muscle, they are also continuously seeking a technology assurance solution which is not only technically equipped to add value to their businesses but also can deliver independent technology risk assurance over the integrity, availability and confidentiality of information.

1. If there is a robust Technology Governance framework in place to identify and manage the fundamental technology risks facing the business?
2. If the Internal Audit is detailed and thorough enough to provide a comprehensive, independent and value add IT Audit assurance as expected from it by the Audit Committees?
3. As per the recent changes made by the European Union Data Protection Regulations, it has increased the requirements and scrutiny and has also emphasized on the importance data plays as a business intelligence tool, as an organization it has become important to evaluate if its senior management is taking a comprehensive view of the data quality, its integrity and risk factors? And if it is also looking in ways how it is to be controlled? Also it raises question such as if the senior management have access to leading edge technology risk assurance skills to add value and insight to your business?
4. With the increase in technology and telecoms and our dependency on them, is it guaranteed that the IT environment is resilient and recoverable?
5. Every project and change management is an outcome of a transformation and with every transformation, need of being assured from the prevailing or possible technology risks increases and when a project goes into crisis, it is the lack of an effective risk assurance system in place which results to poor outcomes. So, it is important for an organization to evaluate if it is comfortable with the nature of existing assurance across your change programme?
6. Every business is dealing with the cyber threats and the need of cyber security and needs to evaluate if it has sufficient and required strategies and assurances in place in order to manage the risks?
7. No matter how far we have come in the world of technology, technology and data continues to get impacted because of the regulatory environment, so it is important for a business to understand the nature of regulatory environment and how to manage the risks in order to minimize the reputation and financial consequences, if any kind of sanction is imposed.
8. Complex applications such as SAP, Oracle and infrastructures such as cloud platforms require a deeper assessment of the existing controls and in order to have the right skills and good practice methods can be a challenge, especially when the risk assurance specialists are in such a high demand and thus every business need to evaluate its existing assurance structure and check if it is capable to meet this assurance need?

While digital transformation gives an organization or a business to be more competitive, it is quite a complex process and needs an effective risk management which in turn requires a co-ordinated and integrated approach that allows you to assess the situation in the following manner:

1. An effective technology risk assurance gives you to understand and consider the risk factors of your business in a holistic way, rather than looking at it as IT centric.
2. It gives you an opportunity to understand the wide ranging risks to your digital strategy.
3. Every technology solution comes with a hidden risk factor and cyber threat and an effective technology risk management allows you to assess and highlight the risks right from the selection of a technology solution to implementation of it.
4. Without having an effective technology risk assurance system in its place, you will not be able to assess and highlight the risks prevailing within your business model and IT infrastructure and policies.
5. With the help of technology risk assurance, you can assess the implications of your data governance and security.

• Threat 1: From Good to Bad – The Headline Creators - Scenario like this has the potential of affecting the organization immediately and critically as well and involve factors such as in case of poor IT resilience or inadequate data recovery, a business might reaches a point where it is unable to interface with its customers and is not able to provide critical services. Also if there is a loss in the key databases because of weak data management practices, it might leads to having a significant adverse impact on the business and its brand. In case of a major security breach, it can also lead to theft of critical data, intellectual property or an adverse impact on the integrity of key processes of the business.
• Threat 2: The Strategic Technology and Data Challenges: Lot many businesses in UK are facing strategic barriers such as inadequate IT strategic leadership, weak project and change management and also poor data quality and thus must evaluate their existing IT solutions and services and see if they are supporting the strategic objectives.
• Threat 3: The Systematic Issues Facing Technology and Data: In case of a weak risk management and assurance, there are several areas that might get affected and can also create issues such as:
  1. Fraud threats due to weak management controls.
  2. Fines and penalties in case of inadequate management of software licenses.
  3. Ongoing IYT problems due to an ineffective management and root cause analysis of incidents reported to the service desk.
  4. Weak policies and procedures leading to certain sanctions.

While organizations are working towards strengthening of technology risk management team, it is important to understand that the team should comprise of specialized and experienced professionals who have the ability to combine their knowledge and expertise in technology risk assurance and regulatory requirements, because it is this team which will provide co-sourced and outsourced technology audit capability to the organization and also will provide their views and solutions to certain risk areas such as:

1. Data governance
2. System selection and specification
3. Programme assurance over areas of significant IT change
4. IT outsourcing and third party management
5. IT operations assurance
6. Data and digital security
7. Business and IT resilience

Also See: Outsourced Bookkeeping and Accounting

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.