Originally published by New Context.
As our data, applications, and infrastructures grow more complex, so too do the laws and standards that govern them. Achieving and maintaining compliance with all applicable laws and regulations can feel like a Sisyphean task. Often, organizations will implement compliance controls and processes that they believe are adequate, only to get caught off guard by a failed audit. That’s why it’s so important to validate your compliance program using a robust compliance testing methodology.
Think of a compliance test as essentially a practice audit. A team of experts, or a compliance testing program, will analyze your systems, processes, and controls to ensure that you’re compliant. Your compliance test will then identify issues, suggest remediations, and validate that all issues have been resolved. It’s essential that your compliance testing system is developed by experts who specialize in the specific laws and regulations you need to follow. With their assistance, you can establish a compliance testing methodology to catch potential problems before they occur and ensure you’re never surprised by a failed audit.
How To Implement a Compliance Testing Methodology
The process of creating and implementing a compliance testing methodology may vary depending on the exact regulations and standards you need to follow. However, most successful compliance testing programs follow these general steps:
Step 1: Create the Requirements Library
The requirements library is essentially an inventory of all the specific rules you need to follow and steps you need to take to ensure compliance. It is absolutely critical that you consult with compliance experts for this step, so you don’t unintentionally omit, misunderstand, or misrepresent any of your requirements. After you’ve defined your requirements, you must map them to their applicable business units and identify the employees or departments who are responsible for each area. You should put great care into defining your compliance requirements and risks in terms that your employees can understand, even if they’re not familiar with legalese and technical jargon.
In addition to defining your requirements, you also need to identify the controls and processes you already have in place to mitigate your compliance risks. This is an opportunity for you to find any gaps in your compliance program and target areas that need additional testing.
Once you’ve established the requirements library, you should consider it your compliance bible. It should be your one and only source of information regarding your compliance requirements, controls, and testing. The requirements library can and should be updated if your requirements change, new laws are enacted, or your compliance testing uncovers additional problems. However, you need strict policies regarding who is allowed to modify your requirements, and changes should only be made after consulting with your compliance experts.
Step 2: Assess Your Compliance Risk
Once you’ve established the requirements library, you need to conduct a compliance risk assessment. First, you need to determine the parameters of your risk assessment—which will be informed by your requirements library—and identify the data sources you’ll be using. Next, you need to evaluate and prioritize the risks you’ve identified, measuring the likelihood of a compliance violation and the potential consequences for your company if a violation occurs. Once you’ve identified and prioritized your risks, you can determine which mitigating controls should be tested.
Step 3: Define Your Compliance Testing Methodology
Next, you’ll need to actually define and create your compliance testing methodology. There are five primary components you need to define with your compliance testing methodology, including:
- The purpose, scope, and objectives of your compliance testing methodology.
- The methods you’ll use to collect data for the compliance test.
- The issue management procedure you’ll follow when you identify a compliance violation.
- How you’ll validate that compliance issues have been remediated.
- The reporting requirements for testing results.
This compliance testing methodology should be communicated to all stakeholders and applicable business units so they are fully prepared to cooperate. You should also expect to modify your methodology as you improve your compliance program and streamline your testing process.
Step 4: Determine Your Testing Schedule
There’s no single testing schedule that works for everyone, so if you’re conducting a manual compliance test, you’ll need to use the data from your compliance risk assessment to determine how frequently you need to test each requirement. If you’re at high risk for compliance violations, for instance, you might plan to conduct a test once per quarter until you’ve identified and resolved all issues. Once you’ve determined a testing schedule, you need to share it with all applicable departments, so they know when to expect and prepare for a test.
An even better option is to test continuously with an automated compliance testing program. An automated compliance solution can monitor your systems and generate alerts as soon as a resource falls out of compliance, allowing you to remediate the violation immediately. Since most business systems and processes are progressive and cumulative in nature, waiting three months in between tests could mean that the violating resource and dependent systems continue to drift further out of compliance. That could make the violation much more difficult to remedy than if the problem had been detected immediately by an automated compliance test.
Step 5: Perform a Compliance Test
At this step, you’ve finished developing your compliance testing methodology and you’re ready to put it into action. Make sure all business units know the testing schedule and have adequate time to prepare the necessary data and documentation. As you conduct your manual compliance test, make sure you document each step and preserve evidence of your results. If your test identifies any issues, you should follow up to ensure they aren’t false positives. Once your testing is complete, you need to communicate your findings to all relevant parties.
If you’re implementing a manual compliance testing program, you’ll repeat this process according to the schedule created in step 4. If you’re using an automated testing solution, you’ll likely want to manually follow-up on the initial findings of your first test, but then you’ll set up email alerts and/or monitoring dashboards to notify you of any future violations and remediations.
Step 6: Implement Your Issue Management Procedure
In step 3, you should have defined your issue management procedure, and now it’s time to implement it. Any issues you found through your compliance test need to be assigned to the responsible parties. You should define the severity and priority of each violation and ensure that the affected business units document the underlying cause and remediation plan.
This step is much easier with an automated compliance test, which can implement these procedures automatically as soon as a violation is detected.
Step 7: Validate Issue Remediation
Once an issue has gone through the manual remediation process, you need to validate that the remediation plan worked as intended. Your validation process will ensure that individual violations have been resolved, and may involve additional testing to provide evidence that the remediation was successful.
With an automated compliance testing methodology, issue remediation happens automatically, but it’s still good practice to verify that remediation was successful. You can usually set up email alerts to ensure stakeholders are notified when a violation is found and remediated, or you can use a graphical dashboard to monitor remediations.
Step 8: Monitor Compliance Sustainability
Depending on the severity of the issues uncovered by your manual compliance testing, you may need to establish a period of sustainability during which you continue monitoring affected controls to ensure that violations don’t reoccur. If any issues do pop back up during the sustainability period, you’ll need to reinvestigate the underlying cause and conduct a new remediation plan.
An automated compliance testing program will continuously monitor your resources for compliance and notify you of any violations, so this step is essentially built into the process.
Finalizing Your Compliance Testing Methodology
An effective compliance management program requires robust testing. Automation is key to establishing and maintaining compliance controls, continuously monitoring for compliance sustainability and violations, and removing human error from the testing process, so you should always look for opportunities to automate wherever possible. If you’re going to rely on a manual compliance testing methodology, but you don’t have in-house regulatory experts, you should hire or consult with a third-party company that specializes in your specific compliance requirements.