In today’s interconnected digital landscape, organizations increasingly rely on third-party vendors and service providers for IT services, software, infrastructure, and data handling. Third-party IT risk refers to the potential threats and vulnerabilities introduced by external vendors, service providers, or partners that access, manage, or host an organization’s IT systems, data, or infrastructure. (ChatGPT).
Important Question <> Have you obtained a System and Organization Controls (SOC) Type 2 report or conducted a Third-Party Security Risk Assessment (TPSRA) report of all key 3rd party vendors.
- SOC 2 reports are conducted by independent – regulated auditing and accounting firms.
- Leverage ISO 27001:2022
- TPSRA reports are conducted by internal Information Security team supported by independent expert IT Auditors
3RD Party risk is one of the fastest-growing threats to organizations due to digital transformation and supply chain complexity; therefore a proactive, structured, and collaborative approach to vendor risk management—supported by contracts, technology, and governance—helps reduce exposure and ensures TECH resilience (ChatGPT)
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- Read, Rely & Remediate R³ SOC2 report on Security, Availability, Processing Integrity, Confidentiality & Privacy – SAPCP.
- Conduct TPSRA on all mission critical 3ʳᵈ party vendors.
- Tighten Vendor Management Policies & Procedures for Identifying and ranking vendors, Selecting vendors, Assessing vendor risks and Performing due diligence.
- Ensure appropriate language, requirements, safeguards (data protection, incident response, compliance obligations, audit rights, SLA, etc.) and roles & responsibilities are clearly defined in vendor MSA & contracts.
- Be aware that Regulatory scrutiny of third-party risk is increasing globally.
- Adapt zero trust architectures to mitigate third-party access risk.
- Focus on Change MGMT (SUCOP).
- Regularly test Legacy systems, HVAC, EMS (Environmental Monitoring System), BMS (Building Management System, SCADA (Supervisory Control and Data Acquisition) & subsidiary systems for 3rd party access provisioning & deprovisioning processes.
Purpose: Assess if organization’s controls relevant to the AICPA’s Trust Services Criteria, are designed and operating effectively.
| Type | Scope | Use Case |
|---|---|---|
| Type I | Design of controls | Early-stage or first-time audits |
| Type II | Operating effectiveness over a review period | Provides stronger assurance for ongoing compliance |