RA-02: Annual Risk Assessment with Fraud Risk

Annual risk assessment including fraud risk assessment and evaluation of unauthorized access opportunities

Control Description

On an annual basis, the Company performs a risk assessment which includes an assessment of fraud risk; considers opportunities for unauthorized acquisition, use, and/or disposal of assets, altering the Company's reporting records, and committing other inappropriate acts; and accounts for threats and vulnerabilities that could arise specifically from the use of IT and access to information.

Plain Meaning

This control requires an annual comprehensive risk assessment that specifically looks at fraud risks and opportunities for unauthorized activities. You must evaluate how someone could steal, misuse, or dispose of company assets, manipulate records, or commit other inappropriate acts. The assessment should also consider IT-specific threats and vulnerabilities related to information access.

Financial Fraud: Evaluate risks of financial misappropriation and fraud
Data Manipulation: Assess risks of unauthorized data alteration
Asset Misuse: Identify opportunities for asset theft or misuse
Reporting Fraud: Evaluate risks of false reporting or record manipulation

Unauthorized Access Assessment

Physical Access: Assess unauthorized physical access to facilities and assets
Digital Access: Evaluate unauthorized access to systems and data
Privilege Escalation: Identify risks of unauthorized privilege escalation
Data Exfiltration: Assess risks of unauthorized data removal

IT-Specific Risk Evaluation

Technology Threats

Cyber Attacks: Evaluate risks from external cyber threats
Insider Threats: Assess risks from internal malicious actors
System Vulnerabilities: Identify technical vulnerabilities in systems
Data Breaches: Assess risks of unauthorized data access

Access Control Risks

Authentication Weaknesses: Evaluate authentication system vulnerabilities
Authorization Gaps: Identify gaps in access authorization controls
Session Management: Assess risks in session handling and management
Privileged Access: Evaluate risks associated with privileged accounts

SSDLC and OWASP Framework

Secure Software Development Lifecycle: Implement SSDLC practices throughout development
OWASP Top Ten: Regular assessment against OWASP Top Ten vulnerabilities
OWASP Best Practices: Follow OWASP security guidelines and recommendations
Threat Modeling: Conduct threat modeling during design and development phases
Code Security Analysis: Static and dynamic code analysis for vulnerability detection
Security Testing: Automated and manual security testing in CI/CD pipelines

Recommendations and Mitigation Strategies

Fraud Prevention

Segregation of Duties: Implement role separation to prevent fraud
Dual Authorization: Require multiple approvals for critical transactions
Audit Trails: Maintain comprehensive audit logs for all activities
Regular Monitoring: Implement continuous monitoring for suspicious activities

Access Control Improvements

Multi-Factor Authentication: Implement MFA for all critical systems
Least Privilege Access: Grant minimum necessary access permissions
Regular Access Reviews: Conduct quarterly access permission reviews
Privileged Access Management: Implement PAM solutions for privileged accounts

Technology Security

Vulnerability Management: Regular vulnerability assessments and patching
Security Monitoring: Implement comprehensive security monitoring
Incident Response: Develop and test incident response procedures
Security Training: Regular security awareness training for employees
SSDLC Implementation: Integrate security throughout the development lifecycle
OWASP Compliance: Regular assessment against OWASP Top Ten vulnerabilities

Annual Assessment Process

Assessment Timeline

Q1: Risk assessment planning and scope definition
Q2: Comprehensive risk evaluation and analysis
Q3: Risk mitigation planning and implementation
Q4: Assessment review and process improvement

Risk Categories

High Risk: Immediate attention required, implement controls within 30 days
Medium Risk: Address within 90 days with appropriate controls
Low Risk: Monitor and address as part of regular security program

RA-01: Internal control audits
LS-14: Administrative access restrictions
LS-26: Multi-factor authentication for remote access

OWASP Top Ten
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