Financial Audit and Cyber Security Risks: Implications and Mitigation

This report explores the increasing importance of cybersecurity in financial audits, driven by regulations like 23 NYCRR 500 and the growing frequency of cyberattacks. It highlights the financial and regulatory implications of these attacks, emphasizing the need for audit professionals to advise clients on risk management and compliance. The report discusses the role of the audit committee in overseeing cybersecurity risks, including the complexities of cloud computing and the need for collaboration between IT and audit professionals. It details the requirements of 23 NYCRR 500, including the designation of a Chief Information Security Officer (CISO) and the importance of risk assessment and reporting. Finally, it presents a socio-technical model for cyber risk management, emphasizing the need for a multi-tiered approach involving people, technology, and processes to ensure effective cybersecurity governance.