Dangers Of Mixing Compliance Consulting And Auditing: Why It Leads To Compliance Blindspots

Compliance audits are a high-impact activity. The results of compliance audits can have a cascading effect on a business. We aren’t just talking about security apparatus or operations but its longevity in the market. A compliance audit can determine whether the business gets funded or not and even have a progressive or regressive impact on the value of the stock. 

With such a high impact, it’s only natural for companies to gravitate toward consultants with the expertise to establish complete and sustained compliance. Not only do they possess the technical know-how of what needs to be done, but can also course-correct and troubleshoot based on the company’s requirements or when deviations occur. Over the course of time, they help companies go from some level of compliance immaturity to a state of audit readiness, preparing them for the last-mile certification. As a function, the role of a consultant ends here. 

From this point on, the auditor takes over, essentially assessing the company’s controls against the specifications of compliance or regulation. These checks are run against a standardized checklist while gathering the evidence presented to them. They simply exist to examine the implementation of the framework and highlight lapses in compliance, if any. 

Why you must not mix compliance consulting and auditing?

Conflict of Interest

When talking about audits, the emphasis on independence cannot be understated. 

An auditor’s role carries an immense responsibility—one that literally holds the sanctity of customer data in the balance. Needless to say, to get an accurate assessment, auditors must not be influenced, incentivized, or persuaded to misrepresent results in any way. 

We say this because the results from compliance audits are not always convenient. Despite all the meticulous planning and preparation, there’s always room for error. Add to this the work they put into creating the data management system, and we enter the realm of critiquing one’s own work.  

And so, having compliance consultants step in as auditors gives rise to a clear ethical conflict of interest. While some may argue that clubbing the consultancy and audit functions facilitates a more holistic approach to compliance, the vast majority agree that there quite obviously needs to be a separation of service.

The conundrum here is about auditing independence. So, let’s assume for a minute what happens when the roles of consultants and auditors merge into one, Let’s look at the possible pitfalls of such an approach.  

Compliance Blindspots and Other Dangers

Many inherent conflicts come with auditors getting too close to the firm being audited. One of the most pressing concerns is the emergence of compliance blindspots. 

What is a compliance blindspot? A compliance blindspot is the inability to completely or accurately ensure compliance due to a lack of visibility, information, or objectivity. Compliance blindspots have devastating impacts on both short-term and long-term security strategies.  

Not addressing compliance blindspots can introduce specific control gaps that can be exploited quite easily. So, in the short term, the organization is left susceptible to increased risk and vulnerabilities while in the long term, a less than thorough audit can cause a severe loss of reputation and business once these gaps come to light.  

Also check: Top 11 Compliance Audit Software (A Quick Walk-through)

The Role of Bias

Consulting is a lucrative business that isn’t just a one-time exercise but has scope for multiple renewals and referrals. Often, a consultant-turned-auditor is incentivized to achieve a good audit score. They fear losing their business if the audit report is not favourable.

When consultants become auditors, they unknowingly inherit a certain bias that makes obvious shortcomings in the system they help design more difficult to notice. This can lead to critical issues getting overlooked, resulting in a false sense of security and a compromised compliance posture. 

The auditor may also carry assumptions into the auditing phase that jeopardize the validity of security systems and practices. A consultant-auditor is likely to suggest solutions that worked in previous instances, although they might not always satisfy compliance needs.

Instruction vs Recommendation 

There lies a fundamental and tonal difference between how a consultant provides recommendations and how an auditor does. A consultant’s objective is to provide a creative method to arrive at compliance. When a consultant suggests a method of fulfilling a requirement, it is still acceptable for the client to choose a different path as long as they achieve the same result. In other words, there is no consequence for not following the consultant’s instructions exactly. 

On the other hand, the recommendations from an auditor are absolute. They may not be open to the same fluid interpretation as advice from a consultant. By nature, they are instructional. When they add their recommendations to a compliance report, it is always recommended to follow them exactly to avoid a reported instance of non-compliance.  

The Illusion of Being Thorough 

Compliance audits require a fresh set of eyes. They must be able to provide an honest assessment with no preconceived notions or hesitations stemming from the consulting.    More often than not, the level of involvement compliance consultants share with the data security system is high. The process of building an audit-ready system is a sophisticated one, and their proximity to the system can give the illusion of thoroughness.

Familiarity with the system and management can influence the auditor to be less stringent and less rigorous. Not only is this hard to detect, but can have an impact on what areas of compliance are given importance and what is overlooked. This can also result in compliance blindspots associated with not identifying a certain type of risk. In the long term, this may evolve into a deeper problem, requiring intensive, long-drawn fixes.

There is also the question of renewals. Let’s say the initial audit portrays a favourable result with a few minor instances of non-compliance, and the audit report is later found to be faulty. In such cases, it is likely that follow-up audits will get tougher from this point. As standards evolve, the problem compounds, making it difficult to steer back on track and prove compliance. These cases can also draw out the actual process of truly getting compliant.    

To summarize, there is a limitation on how far a consultant can go. When the same vendor fulfills both functions, the lines between what can and must be done are blurred. This can lead to unrecognized compliance issues, erroneous reporting, and questionable decision-making.

3 Best Practices for Ensuring Robust Compliance

In addition to a separation of service, organizations can take a proactive approach to ensure they avoid compliance blindspots and other dangers. Here are a few practices they can follow:

Clearly define roles and transition points

As mentioned above, consultants have limitations and need to know how not to overstep. To do this, roles need to be defined carefully for consultants and the teams they work with. Teams need to be trained on transition points with consultants to know where to take over from them. A steady line of communication helps consultants know when they are allowed to provide advice and when to let the security operations team handle things.

Double down on independent risk and compliance assessments

Risk and compliance assessments are not always tied to certification audits—they can be carried out in isolation. In fact, conducting regular assessments is a best practice that ensures a strong, evolving approach to threat management. 

There are two ways in which periodical assessments aid in ensuring tighter security. On the one hand, they identified any missed risks during certification. This means organizations can keep their risk profiles updated while also making incremental changes to the existing security measures. On the other, independent compliance assessments also help curb any compliance gaps in addition to any instances of non-compliance that were found as a part of the certification process. They also enable companies to keep up with the latest changes in regulation and pivot when needed.

Leverage external advisory

An external board of advisors can immensely benefit companies looking to overlook their compliance strategy. External advisory boards include experts who possess the technical know-how of the compliance landscape as well as a fresh perspective on compliance that is independent of the system. An independent advisory board can also drive strategies to help companies thrive in a volatile landscape. 

External advisory is a results-driven business. They help companies focus on the details that matter—which is to establish a strong security posture and enable them to stay ahead of the threat curve. This means weeding out obsolete best practices, enabling change management, and nurturing a security-first culture.

How Technology-enabled Compliance Can Solve For This?

Forward-thinking CIOs and CISOs have recognized the importance of letting technology do the heavy lifting. Especially with the complexities of security and compliance, there’s so much a comprehensive platform can do. Compliance automation platforms like Sprinto take away the human element from consulting by leveraging technology to help organizations achieve a sustainable, mature security and compliance posture. 

Compliance is also a lot about control. Companies often depend entirely on the consultant for everything and this gives them complete autonomy on how compliance is implemented. With solutions like Sprinto, customers are not only able to minimize dependence but gain back a lot of control by integrating with the company’s existing tech stack and monitoring controls in real-time. 

5 Crucial Criteria for Selecting an Independent Auditor

There’s a lot that goes into picking an independent auditor. They’re likely to work with the organization for an extended period, sometimes over years. So, it’s important to pick one with the right philosophy and outlook. Here are some criteria that must considered while picking an auditor for compliance certifications:

Qualifications

Regulatory bodies have their own auditor requirements. Auditors need to possess certain certifications to become registered auditors. Organizations not only need to analyze auditor qualifications but also need to select auditors based on the framework they wish to align with. For example, auditors need to be ISO/IEC certified for them to become qualified ISO 27001 auditors.

Track record

An auditor’s past experience is like his portfolio. It tells you how much success they’ve had over their career in auditing organizations. There are two particular factors to consider—longevity, or the long-term associations they’ve had with firms they’ve audited, and the number of firms and years of experience within the industry. Longevity tells you how successful they are in helping the organization consistently pass their periodical audits, while their experience in the industry indicates the quality of audit insight they are likely to provide.

Quality and assurance

As with every regulation, auditors must provide the firms they audit a certain level of quality and professional service. They need to be able to align with the requirements of federal and state laws wherever applicable. In addition to this, they need to demonstrate that they adhere to auditing and reporting best practices as specified by the regulatory or certification body.

Qualitative feedback    

Qualitative feedback and reviews are often underrated aspects to consider. Irrespective of whether the auditor is independent or from an auditing firm, it’s important to work through reviews to get an honest assessment of the auditor’s reputation, methodology, effectiveness, and quality. Industry references also indicate the quality of their analysis and decision-making on remediation and repeat audits. 

Leveraging technology

The compliance landscape is a tech-forward field. Organizations are only adding more technology to their arsenal. This means consolidation is an incredibly complex process that can only be solved with, ironically, technology. Compliance management and automation can help simplify the process of gathering data and evidence for auditors. The right auditor not only recognizes this but can work with compliance automation and other technology to help businesses achieve compliance. Interviewing an independent auditor on this can help understand how accommodating they are to this facet. 

How Sprinto ensures audit independence

Solutions like Sprinto also help in audit independence. The technology acts as an aid to compliance. The platform performs all the tasks that are expected of a consultant—aligning policies with compliance requirements, monitoring controls in real-time and gathering extensive evidence of compliance. 

Sprinto’s team of compliance experts then compile a list of thoroughly vetted auditors that customers can choose from. From this point on, customers assess auditors individually and choose ones that fit their specific needs. This way, Sprinto ensures a separation of service. 

Want to learn more? Speak to our compliance experts here.  

Compliance Beyond Audits

The realm of compliance extends well beyond the audit. It isn’t a one-time activity but a necessary endeavour to keep data security measures, organizational policies, and internal controls attuned to the threat landscape. Organizations must ensure their security postures are performing constantly at the highest standards and security teams are always one step ahead of the curve.   

Building a security-first culture requires strong leadership. A strong culture is built on robust security practices, an unwavering quest for excellence, and the ability to take criticism when the situation demands it. Often, it requires a top-down approach where management sets the pace and employees operate within it. 

One of the cornerstones of such a culture is its ability to function independently—something technology significantly simplifies. Today, there are technologies that serve the exact purpose of a consultant completely without oversight or bias. 

Sprinto has a philosophy of complete audit objectivity. The platform equips organizations with everything they need to get audit-ready in record time. It does so by automating periodical compliance checks, notifying security teams when controls fail, and collecting evidence in a manner that makes it easy for auditor approval. 

Let’s show you how it’s done. See Sprinto in action. 

Frequently Asked Questions

How can companies ensure their auditors are truly independent?

Companies can ensure independence by keeping consultants and auditors separate. Organizations need to ensure a separation of service and approach independent auditors from the consulting firms that they work with. They must have relevant experience in conducting rigorous audits while providing honest, unbiased, and thorough feedback on their compliance practices. 

What are the signs that an auditor may not be rigorous enough?

There are a few tell-tale signs of faulty audits. Here are a few of the most common:

• Auditors do not flag controls that are failing
• Auditors leave out details or findings from the compliance report and suggest fixing them outside of the scope
• Auditors suggest quicker, less effective methods for problems

Are there legal implications for not separating consulting and auditing services?

Not maintaining a separation of service can have devastating legal consequences. For one, it can compromise the independence and validity of audits, cause regulatory standards violations, and invite legal penalties.