Auditing Cloud Computing and Outsourced Operations

Auditing cloud computing and outsourced operations refer to the process of evaluating and verifying the security, performance, and compliance of cloud computing systems and outsourced operations. The purpose of this type of audit is to ensure that the cloud computing systems and outsourced operations are secure, reliable, and comply with relevant laws, regulations, and organizational policies.

Scope of this Audit:

The scope of an audit of cloud computing and outsourced operations typically includes the evaluation and verification of the following:

1. Security: Evaluate the security controls in place to protect sensitive data and systems, such as encryption, access control, and incident response processes.
2. Performance: Assess the performance and availability of the cloud computing systems and outsourced operations, including response times, data transfer speeds, and the ability to scale resources as needed.
3. Compliance: Verify that the cloud computing systems and outsourced operations comply with relevant laws, regulations, and organizational policies, such as data privacy and data protection policies.
4. Data protection: Evaluate the processes and technologies in place to protect sensitive data, such as backup and recovery procedures, data retention policies, and data access controls.
5. Contract terms: Review the terms of the contract with the cloud provider or outsourced operations vendor, including the scope of services provided, the responsibilities of each party, and the payment and liability provisions.

Tools for Audit:

• Vulnerability scanning tools
• Penetration testing tools
• Configuration management tools
• Compliance and security management tools
• Cloud management platforms
• Data protection and backup tools
• Cloud monitoring tools

Steps to perform this Audit:

The steps to perform an audit of cloud computing and outsourced operations typically include the following:

1. Define the scope and goals of the audit: Determine the specific areas to be audited and the goals of the audit, such as verifying security, performance, and compliance, or assessing the effectiveness of specific security controls.
2. Review policies and standards: Review the relevant policies and standards, such as data privacy and data protection policies, to ensure that the cloud computing systems and outsourced operations are in compliance.
3. Perform a risk assessment: Conduct a risk assessment to identify the potential security and compliance risks associated with the cloud computing systems and outsourced operations.
4. Evaluate security controls: Evaluate the security controls in place, including access control, encryption, incident response processes, and disaster recovery procedures.
5. Perform vulnerability scans and penetration testing: Use vulnerability scanning tools and penetration testing tools to identify and assess any security vulnerabilities.
6. Evaluate performance and availability: Assess the performance and availability of the cloud computing systems and outsourced operations, including response times, data transfer speeds, and the ability to scale resources as needed.
7. Review the contract terms: Review the terms of the contract with the cloud provider or outsourced operations vendor to ensure that the agreement meets the requirements of the organization.
8. Document the findings: Document the findings of the audit, including any issues or risks identified, and provide recommendations for improvement where necessary.
9. Provide a report: Provide a written report of the audit results, including a summary of the findings, recommendations for improvement, and a plan for remediation of any issues identified.

Checklist for Auditing Cloud Computing and Outsourced Operations

• Review the audit steps in the other chapters in this part of the book and determine which risks and audit steps are applicable to the audit being performed over outsourced operations. Perform those audit steps that are applicable.
• Request your service provider to produce independent assurance from reputable third parties regarding the effectiveness of their internal controls and compliance with applicable regulations. Review the documentation for issues that have been noted. Also, determine how closely these certifications match your own company’s control objectives and identify gaps.
• Review applicable contracts to ensure that they adequately identify all deliverables, requirements, and responsibilities pertinent to your company’s engagement.
• Review and evaluate the process used for selecting the outsourcing vendor.
• Determine how your data is segregated from the data of other customers.
• Review and evaluate the usage of encryption to protect company data stored at and transmitted to the vendor’s site.
• Determine how vendor employees access your systems and how data is controlled and limited.
• Review and evaluate processes for controlling non-employee logical access to your internal network and internal systems.
• Ensure that data stored at vendor locations is being protected in accordance with your internal policies.
• Review and evaluate controls to prevent, detect, and react to attacks.
• Determine how identity management is performed for cloud-based and hosted systems.
• Ensure that data retention and destruction practices for data stored offsite comply with internal policy.
• Review and evaluate the vendor’s physical security.
• Review and evaluate your company’s processes for monitoring the quality of outsourced operations. Determine how compliance with SLAs is monitored.
• Ensure that adequate disaster recovery processes are in place to provide for business continuity in the event of a disaster at your service provider.

Conclusion:

In summary, the conclusion of an audit of cloud computing and outsourced operations should provide a clear, concise, and actionable assessment of the systems and operations, and provide guidance for improvement where necessary.