Using a Vendor Risk Management Audit Checklist

Your company data has an immense value, so having a secure third-party management policy and vendor risk assessment questionnaire are integral in protecting its confidentiality and availability.

Our free downloadable worksheet will assist in managing third-party risk more effectively and creating stronger vendor lifecycle management practices.

1. Review the Vendor’s Terms of Service
Vetting vendors for your organization can range from being straightforward or in-depth, depending on how integral their involvement is with its operations. A number of checks should help to ascertain if a vendor can be trusted with protecting information security and operational continuity.

Evaluating third-party risk can save your business thousands in mitigation costs and hours of research, not to mention hard-to-quantify losses like reputational harm or disruptions of its operations. That is why it is vital that your audit checklist includes enough detail for your unique business requirements.

Start by compiling an inventory of all third-party relationships. Give priority to those that possess access to sensitive information or essential functions. Next, collect pertinent data through questionnaires or external sources and develop assessment criteria for them.

2. Review the Vendor’s Security Policy
An extensive vendor assessment checklist can assist organizations with streamlining their third-party risk management processes. It allows organizations to quickly assess whether prospective business partners meet internal information security standards as well as comply with relevant governmental regulations, while also helping prevent misconfiguration errors that could potentially expose sensitive data into the public realm.

Begin by compiling a list of all vendors with whom your organization interacts – this should include suppliers, contractors, consultants and business process outsourcers. Prioritize those vendors who can access confidential data or perform essential functions within your organization.

A well-drafted policy should set forth a schedule and procedures for conducting risk analyses as well as ongoing governance (e.g. audit reports and policies). Furthermore, such policies must contain procedures for ending vendor relationships.

3. Review the Vendor’s Backup Policy
Businesses reliant on vendors for data storage must put special consideration into the backup process to minimize risks related to storing. It’s crucial to review each vendor’s backup policy in order to understand how they will react in case of data breaches or other disaster scenarios.

An effective checklist is key to protecting your business from data breaches and other threats. With an exhaustive list, you can ensure every aspect of risk evaluation is covered and that the company you work with can effectively handle any situation that arises.

Utilizing a mobile inspection app can save your organization both time and money by streamlining the process of collecting information from vendors and creating reports instantly, freeing your team up to focus on analyzing whether third-party vendors comply with cybersecurity standards, best practices, or regulations.

4. Review the Vendor’s Data Protection Policy
Data breaches often result from third-party vendors, so it is imperative that companies establish effective vendor risk assessment practices. A thorough audit checklist covering everything from vetting and due diligence checks to remote access monitoring can protect your company’s crown jewels from potential hackers.

Digitizing questionnaires can simplify and expedite the vetting process by eliminating redundant data entry, as well as automatically generate reports for supervisors or project managers to easily share. Digital inspection tools also adapt their questions based on responses received from vendors to ensure you’re receiving thorough responses that prevent any gaps or misunderstandings and ensure your business complies with internal and industry standards.

5. Review the Vendor’s Disaster Recovery Plan
Employing a vendor risk management audit checklist will enable companies to perform due diligence and protect data security. Use of the checklist will make third party management an integrated, continuous process that increases security posture while assuring stakeholders that the organization takes their data seriously.

Begin by compiling a list of all third parties currently associated with your business. Prioritize them according to their impact on your organization and level of risk they pose – such as those having access to sensitive data or operating in areas prone to natural disasters. Next, collect any pertinent information regarding each third party such as contracts, SLAs, financial reports, or compliance reports for analysis.