Unlocking Efficiency: The Power of Continuous Controls Monitoring 

Continuous controls monitoring (CCM) technologies automate processes to minimize business losses while increasing operating effectiveness. CCM achieves these objectives by continuously monitoring business functions and implementing continuous auditing of financial controls and transactional applications.

Financial services employ CCM to monitor financial transactions and identify fraud. It is a core component of governance, risk, and compliance (GRC) that helps organizations across various industries improve their overall risk management. For example, organizations can use CCM for identifying separation of duties violations, and manufacturers can implement CCM for process control monitoring to maintain compliance.

What Are the Benefits of Continuous Controls Monitoring?

Modern organizations are shifting their risk management practices from manual controls to automated controls to better monitor business activities supported by their applications. As the IT environment grows more complex, workloads and applications move to the cloud, and employees work remotely, there is a growing issue of control oversight, especially for ERP customers.

Some of these challenges are:

• Ineffective communication, which does not include all participants in the internal control process (process owner, control owner, auditor, manager, etc.).
• Disruptive risks from epidemics, globalization, innovative technologies, and complex regulations.
• High cost and complexity of manual security controls.
• Possible negative impact of security controls on the user experience.
• Difficulty in ensuring the effectiveness of internal controls without a continuous monitoring process.
• A need to manage and control massive amounts of data in various systems.

Without a continuous monitoring process, it is difficult for organizations to ensure the effectiveness of internal controls. It is no longer acceptable to tell auditors you are not aware of a problem. Organizations should take precautions to avoid unnecessary surprises.

CCM systems can resolve many of these problems by:

• Increasing productivity of your compliance and internal audit teams. If more controls can be tested in a given amount of time, compliance professionals are more likely to find problems before they occur. This also frees compliance and internal audit professionals to focus on higher-value tasks such as manual testing required to evaluate controls.
• Increasing confidence that line managers running critical business processes are actively managing the associated risks. CCM provides compliance managers with a clear view of key control activities and ensures that they are performing as intended.
• Reducing remediation costs by identifying and correcting control faults before escalation.
• Providing senior executives with visibility into their organization’s risk, security, and compliance status.
• Providing immediate access to evidence of the organization’s ability to mitigate risk, protect valuable assets, and meet legal obligations.
• Placing a financial quantification to risks to better prioritize remediation actions.

Common Use Cases for Continuous Controls Monitoring

CCM has a multifold impact on your security, risk, and compliance. Depending on how well it is implemented, continuous monitoring of controls can significantly improve efficiency and provide direct and indirect cost savings. Here are three key use cases for CCM:

Controls Management

IAM is critical for protecting sensitive data and systems. Most organizations conduct manual access reviews on a quarterly or monthly basis. Compliance specialists compare each employee’s status and role in the company against a list of permissions to ensure they have the appropriate access level.

Continuous controls monitoring software automatically executes tests to compare user lists, identifying users with excessive access permissions for their current status or role.

Change Management

Organizations use various hardware devices to support operations, relying on system configurations to ensure functionality and security. Developers and IT managers can reduce security risks by carefully managing configurations and tracking changes.

Modern organizations often deploy a device management application to deploy and monitor devices automatically. However, it is still necessary to consult reports to ensure IT administrators have installed the latest patches.

Integrated with the device management solution, a compliance operations system can use configuration details to manage devices. For example, you could use tests to ensure corporate devices are properly configured based on company security policies.

Risk Quantification

IT auditors will require the compliance team to provide evidence of the organization’s vulnerability management efforts, including whether the organization has addressed all critical vulnerabilities within a reasonable time frame. It is also important to demonstrate adherence to internal incident response and vulnerability management policies.

Usually, vulnerability scanners help provide this evidence. When combined with continuous controls monitoring tools, these scanners help organizations verify the performance of control processes.

A Practical Approach to Continuous Controls Monitoring

The steps for implementing CCM include:

Defining Controls to Monitor

The decision on which controls should be monitored is usually determined by key business and IT processes. The prioritization of these processes is based on risk and prior experience with audits, self-assessments, and reviews due to control failure.

Gathering Transaction Data

Managed assurance processes are usually more informal than audits because they are based on expert judgment rather than detailed testing. An audit is a systematic process by which a qualified team or individual objectively obtains and evaluates the evidence for a process claim and forms an opinion on the execution of the claim.

Automating the assurance process requires reviewing control descriptions and breaking down control components, allowing them to be formally tested and subjected to expert judgment.

Defining Automated Tests

Continuous evaluation of controls requires developing rules that test controls in near real-time to ensure they comply with the formal assertions. Depending on the existing audit process or type of evidence, the tests can belong to one of these categories:

• Asset management instead of physical inspection of an asset
• Electronic transaction confirmation, including atomic elements proving the transaction was conducted correctly
• Electronic statements are used instead of internal or external documents
• Re-performance of controls using automation
• Observation via periodic manual testing
• Analytical procedures such as statistical analysis, comparison with other internal or external data sets, or pattern matching of transaction data
• Automated collection of responses to self-assessment surveys

Reporting

Management teams use key risk indicators (KRIs) to monitor control processes. These indicators help alert business teams to potential issues with security controls and support continuous improvement efforts.

Continuous controls monitoring combines KRIs and results from process analytics and tests to help create a control assurance program (CAP). This program validates and prioritizes the main concerns over monitored controls, allowing human teams to address these issues during periodic testing.

A risk and control self-assessment (RCSA) allows management teams to identify additional control risks and deficiencies, leveraging the knowledge obtained throughout the control management cycle (planning, building, running, and monitoring). GRC platforms simplify digitization and automation, providing alerts and helping manage remediation efforts.

The CCM continuously monitors and reports KRIs associated with formal assertions. It informs the control risk profile, incorporating the risks into everyday management processes.

Daily control management processes use other risk indicators susceptible to false positives. These KRIs require adjustment to become reliable for self-assessments and continuous improvement efforts. You can incorporate the KRIs into a more well-rounded CCM program as they mature.

Continuous Controls Monitoring with Pathlock

Pathlock provides a Continuous Controls Monitoring (CCM) platform that supports the custom control and risk management requirements of IT, HR, Finance, and Audit. It cost-effectively orchestrates risk management, improves processes, satisfies regulatory mandates, proves compliance, achieves governance objectives, and mitigates security concerns.

Pathlock centralizes continuous monitoring, testing, and reporting on internal controls. As a result, it minimizes business losses via errors or fraudulent activities by reporting control breakdowns and delivering a return on investment through improved business operations.

Pathlock provides these capabilities across complex cross-application environments. In addition, it comes with an extensive library of controls and the critical business processes they support.

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