Cloud computing has revolutionized the way many businesses carry out daily tasks and manage their data. A mid-2020 forecast by Gartner estimated the value of the cloud computing market at $242 billion in 2019, a number projected to reach over $364 billion by 2022.
That means many businesses will be moving more of their workflows and their data management to the cloud. For some businesses, this will be a first move to the cloud. For others, it will be another in a series of migrations.
For both, a cloud migration offers a number of advantages — and pitfalls, too. During the initial planning stages, a cloud audit by an external third party can help companies understand their current computing situations and so they can plot their next steps more with greater confidence.
What Is a Cloud Audit, and Why Do You Need One?
On its surface, cloud computing is a simple concept: Applications are run and data are stored not on servers a business maintains on its own premises, but on remote servers. These servers often offer more storage space and computing power than local servers can.
Scratch the surface, however, and cloud computing becomes more complex. According to Linford & Co. LLP auditor Jaclyn Finney, cloud computing involves multiple service models and multiple deployment models. “The models can be shaped and morphed into different resources depending on the needs of the organization,” Finney explains.
Such adaptability makes cloud computing highly versatile for a growing business, but it also introduces a level of complexity that can make identifying key resources or monitoring their interactions difficult.
Enter the cloud audit.
In a cloud audit, an outside expert or group of experts examines a company’s current computing situation, whether cloud and in-house. The external team’s goal is to evaluate the design, performance and risks related to the company’s approach to computing.
Based on this evaluation, the external team offers recommendations about how the company may use the cloud more effectively, whether that means moving in-house capabilities to the cloud, strengthening cloud security or taking additional steps.
Cloud audits provide a number of opportunities for businesses. These include the ability to understand the scope and operation of a business’s computer assets, and to address security vulnerabilities.
Outlining Plans for a Cloud Audit
During the pandemic, cloud computing made the transition to remote working possible for many businesses. Thanks to cloud-based tools, companies can allow staff to work from home, or even run entire aspects of their business online, without disruption to day-to-day operations.
With every new layer of cloud-based computing, however, the business can be exposed to new risks that could impact business performance, security and other concerns.
To identify these risks, a cloud audit will need to incorporate the perspectives of multiple stakeholders and examine multiple aspects of cloud use, Meredith Stein, Vincent Campitelli and Steven Mezzio write in CPA Journal.
Assemble the Team
A thorough cloud audit requires coordination between internal team members and external professionals. The internal team contributes its knowledge of the organization’s specific systems and needs, while the external team focuses on performing an analysis as objectively as possible.
An organization preparing for a cloud audit may also need to consider the role that cloud vendors play in their analysis. For example, it may be difficult to audit some aspects of cloud application use when those aspects are controlled by third-party vendors, KPMG senior managers Dirk Vanderbist and Thomas Vormezeele write.
Rather than relying on these vendors, in some instances, an “internal audit may need to gain assurance from other sources such as external certifications,” Vanderbist and Vormezeele write. Providing assurance is one significant benefit of having an external professional participate in the audit process.
Both internal team members and external professionals can make valuable contributions in a discussion regarding the purpose and goals of a cloud audit.
For internal team members, it’s important to keep the cloud audit framed within the organization’s bigger goals. This means aligning cloud computing services with the larger IT strategy and architecture, writes Laura Zannucci, an information security consultant at SBS CyberSecurity, LLC.
To achieve such alignment, Zannucci writes, organizations should focus on several areas, including:
- Which systems or applications are to be run in cloud environments.
- The effect of these changes on the operations of the business.
- The team’s ability to monitor and manage its own digital assets.
Here, external cloud audit team members can provide perspective and advice in addition to performing the audit itself.
“Management should not assume that effective security and resilience controls exist simply because the technology systems are operating in a cloud computing environment,” warns the Federal Financial Institutions Examination Council’s Joint Statement on Security in a Cloud Computing Environment.
Rather, by making effective security and resilience controls a goal, the results of a cloud audit can be better contextualized and used for meaningful change.
Take an Inventory of Assets
“As a first step, IT needs to identify and inventory all the services that the financial institution consumes from a CSP [cloud service provider],” write Protiviti managing directors Randy Armknecht and Noah Kessler.
As a part of this inventory, Armknecht and Kessller recommend that organizations clarify the service expectations and control responsibilities of the organization and the cloud service provider, respectively. For example, determine who manages access to the system, how security is monitored, how vulnerabilities are addressed and which party manages updates.
A business that knows where its responsibilities lie with respect to cloud-based services can more effectively address those responsibilities. The organization can also hold its cloud provider accountable for meeting its end of the arrangement, if needed.
Understand Your Security Position
Data security is a key concern when it comes to cloud computing, which means security is a key focus area for a cloud audit.
How a company’s data is stored and handled will inform your cloud security strategy. And because there are so many cloud configurations possible, each organization will have a different arrangement of security needs.
A cloud audit can help your team understand exactly where your vulnerabilities lie and how to address them.
Choosing a Partner for a Cloud Audit
Because understanding cloud applications and their use can be complex, any organization can benefit from partnering with an external firm for an audit, writes Christopher Stark, president and CEO of Cetrom, which provides cloud services for CPA firms.
“Whether it’s the latest updates, the newest software, increased data privacy regulations, changing data security threats, or the accelerating advancements in artificial intelligence and machine learning, an IT leader or even a team can struggle without outside, expert IT advisors to augment their capabilities,” writes Stark.
While Stark emphasizes the benefits of enlisting outside help to address cloud computing and security, it does not follow that small companies can forego this partnership due to their size. As The Purple Guys founder and CEO Jon Schram notes, no business is too small to avoid all the risks of operating in the digital realm — but many cannot afford the full costs of inefficiencies, unnecessary duplication or a breach, either.
One survey of CEOs of small and medium-sized businesses found that 62 percent had either an outdated cybersecurity strategy or no strategy at all, writes Joe Galvin, chief research officer for Vistage.
Yet a single cloud breach can put a small company out of business. “According to the National Cyber Security Alliance 60 percent of small and midsized businesses that are hacked go out of business within six months,” Galvin notes.
Businesses of any size can thus benefit from a partnership with an external team for cloud audit purposes. By understanding how your digital assets work, interact and protect against exploitation, an organization can make better choices when it comes to tech.
Whether your organization is already using cloud-based services or is considering a move to the cloud, an audit by an external professional can help ensure you are protecting your assets and getting the greatest value for your investment.
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