ME2.6:
ME 2.6 Internal Control at Third Parties
Control Objective:
Assess the status of each external service provider’s internal controls. Confirm that external service providers comply with legal and regulatory requirements and contractual obligations. This can be provided by a third-party audit or obtained from a review by management’s internal audit function and the results of the audits.
Managing third-party services includes the use of outsourced service providers to support financial applications and related systems. Deficiencies in this area could significantly impact financial reporting and disclosure of an entity. For instance, insufficient controls over processing accuracy by a third-party service provider may result in inaccurate financial results.
Applicability:
- Sarbanes-Oxley
- HIPAA
- GLBA
- PCI
- FISMA
- NIST SP 800-66
- Ditscap
- Control Exception
- User Defined
Risk Association Control Activities:
- 1. Risk: Business requirements are not met or third parties have inappropriate access to business data stores and business processes.
- a. SOX.2.0.6 Roles and responsibilities of third parties are clearly defined in the contractual relationship.
- a. SOX.2.0.6 Roles and responsibilities of third parties are clearly defined in the contractual relationship.
- 1. Risk: Business requirements are not met or third parties have inappropriate access to business data stores and business processes.
- 2. Risk: Third party entities have inappropriate access to critical business processes and data.
- a. SOX.2.0.7 Third party (outsourced) processors have established an acceptable level of control procedures in their operations.
- a. SOX.2.0.7 Third party (outsourced) processors have established an acceptable level of control procedures in their operations.
- 2. Risk: Third party entities have inappropriate access to critical business processes and data.
- 3. Risk: Insufficient controls over processing accuracy by a third-party service provider may result in inaccurate financial results.
- a. SOX.2.0.11 A designated individual is responsible for regular monitoring and reporting on the achievement of the third-party service-level performance criteria.
- a. SOX.2.0.11 A designated individual is responsible for regular monitoring and reporting on the achievement of the third-party service-level performance criteria.
- 3. Risk: Insufficient controls over processing accuracy by a third-party service provider may result in inaccurate financial results.
- b. SOX.2.0.12 Selection of vendors for outsourced services is performed in accordance with the organization’s vendor management policy.
- b. SOX.2.0.12 Selection of vendors for outsourced services is performed in accordance with the organization’s vendor management policy.
- c. SOX.2.0.13 IT management determines that, before selection, potential third parties are properly qualified through an assessment of their capability to deliver the required service and a review of their financial viability.
- c. SOX.2.0.13 IT management determines that, before selection, potential third parties are properly qualified through an assessment of their capability to deliver the required service and a review of their financial viability.
- d. SOX.2.0.14 Third-party service contracts address the risks, security controls and procedures for information systems and networks in the contract between the parties. .
- d. SOX.2.0.14 Third-party service contracts address the risks, security controls and procedures for information systems and networks in the contract between the parties. .
- e. SOX.2.0.15 Procedures exist and are followed that include requirements that a formal contract be defined and agreed upon for third-party services before work is initiated, including definition of internal control requirements and acceptance of the organization’s policies and procedures.
- e. SOX.2.0.15 Procedures exist and are followed that include requirements that a formal contract be defined and agreed upon for third-party services before work is initiated, including definition of internal control requirements and acceptance of the organization’s policies and procedures.
- f. SOX.2.0.16 A regular review of security, availability and processing integrity is performed by third-party service providers (e.g., SAS 70, Canadian 5970).
- f. SOX.2.0.16 A regular review of security, availability and processing integrity is performed by third-party service providers (e.g., SAS 70, Canadian 5970).
Process Narrative
Implementation Guide:
Insert a description of the process narration that is applicable to the existing control statement this narrative refers to.
Process Illustration
Insert a process diagram, flowchart or other visual representation here to illustrate the process narrative.
File:Someimage.jpg
Control Commentary
Insert a description of the control that is applicable to the existing control statement this commentary refers to.
Control Exception Commentary
Insert a description of the control exception that is applicable to the existing control statement this commentary refers to.
Evidence Archive Location
Insert Evidence Description Here.
Control Status and Auditors Commentary
Describe the condition of the applicable control and its effectiveness. Set the color icon to a redlock.jpg, yellowlock.jpg or greenlock.jpg.
File:Redlock.jpg
Remediation Plan
Insert remediation plan, applicability, or any information that indicates what needs to be done.
Supplemental Information:
As desktop applications become more sophisticated, their file formats have become more complex. Application files contain more metadata and hidden information as a byproduct of capabilities such as routing slips, custom properties, version tracking, change tracking, comments, embedded objects and linking to external data sources, to name a few. Utilize available products to identify and remove more these data elements that represent potential privacy, policy, and security threats.
The following list represents many forms of metadata to be aware of.
- Audio and Video Paths
- Author History
- Comments
- Content Properties
- Custom Properties
- Database Queries
- Embedded Objects
- Fast Save Data
- Hidden Slides
- Hidden Text
- Linked Objects
- Macros and Code
- Office GUID Property
- Outlook Properties
- Presentation Notes
- Printer Information
- Routing Slip
- Scenario Comments
- Sensitive Hyperlinks
- Sensitive INCLUDE Fields
- Statistic Properties
- Summary Properties
- Template Name
- Tracked Changes
- User Names
- Versions
--Mdpeters 10:46, 15 June 2006 (EDT)
Implementation guidance
An example of an open community application to address this risk is Bitform Discover .