Security & Privacy Audits: Why They're As Critical As Financial Audits for Business
Hyplon Security team member conducting an information security audit review
If you've ever sat through an annual financial audit presentation, you know the drill. Your accountant walks the board through the numbers, highlights risks, points out areas for improvement, and ultimately gives you confidence to make informed decisions about the business.
But here's the question: When was the last time someone did the same for your digital assets, the systems and data your business runs on every day?
The Audit You're Probably Missing
Most business leaders wouldn't dream of skipping their annual financial audit. It's basically non-negotiable. It provides accountability, identifies risks, ensures compliance, and gives stakeholders confidence that either the business is on solid ground or needs improvement.
Yet many of these same organisations go years without a proper information security audit, or haven't even considered carrying one out, even though a data breach, privacy incident, or cyber incident can be just as financially devastating as any accounting irregularity.
Take KNP Logistics as a sobering example. In July 2025, this 158-year-old Northamptonshire transport company collapsed after hackers exploited a single weak password to launch a ransomware attack. Nearly 700 employees lost their jobs. A company that had survived for over a century and a half, through two world wars, economic depressions, and massive industry changes, was brought down in a matter of days by what could have been caught in a basic security audit.
The company likely never thought it would happen to them, and probably had never even heard of information security audits. Most don't.
Think about it: imagine the impact of never conducting a financial audit on a business. You'd have no visibility into financial risks, no assurance of compliance, no confidence in your controls. Eventually, something would go wrong, and by the time you discovered it, the damage would be done. That's exactly what happens when businesses ignore information security audits.
What Exactly Is an Information Security Audit?
Think of it this way: Just as your accountant examines your financial controls, transactions, and compliance with accounting standards, an information security audit examines your digital defenses, data handling practices, and compliance with privacy and security regulations.
A comprehensive information security audit goes well beyond checking if you have antivirus software or strong passwords. It's a thorough examination that includes:
Technical Infrastructure: Your software applications, websites, devices, access controls, encryption protocols, authentication systems, and network architecture
Operational Security: Your policies and procedures, employee contracts, annual assurance plans are in place, system patching practices, backup and recovery processes, and incident response plans
Physical Security: The security of your premises and any third-party facilities that handle your data
Third-Party Risk: Any external providers that supports the delivery of your product/services such as call centers, cloud services, document scanning, data analytics, or other vendors who touch your data
Just like a financial audit, an information security audit should be conducted at least annually or when major changes occurs and by an independent, qualified and experienced information security consultant. This independence is crucial. You need an objective assessment, not someone telling you what you want to hear.
Why This Matters for Your Business
The parallels to financial audits are striking, but the stakes are uniquely high:
Regulatory Compliance: Just as you must comply with financial regulations, you're also bound by privacy laws, data protection regulations (like GDPR), and industry-specific security requirements. Non-compliance can result in significant fines, legal action and possible land the company’s name in headlines.
Risk Identification: An audit identifies security and privacy risks in your systems and data handling practices before they impact your operations. You get to fix problems on your timeline, not during a crisis.
Stakeholder Confidence: Your customers, partners, board members, and investors need assurance that you're protecting sensitive information. An audit provides that verification.
Internal Practices and Agreements: Audits evaluate businesses policies, access controls, data handling procedures, privacy practices, and contractual arrangements, both with employees and third parties, to ensure they're working as intended. They identify where processes, agreements, or training need improvement to meet your security and privacy obligations.
Business Continuity and Resilience: Audits assess your ability to maintain operations during security or privacy incidents. They evaluate your backup systems, recovery procedures, and incident response plans, ensuring you're prepared to protect your business, reputation, and customer relationships.
How Often Should You Audit?
The answer mirrors financial audits: it depends on your industry, size, regulatory requirements, and risk profile. However, annual audits should be your baseline minimum.
Some situations demand more frequent attention:
Highly regulated industries (healthcare, finance, government) often have mandatory audit schedules
Significant IT changes such as new systems, applications, or cloud migrations warrant a fresh audit
New third-party relationships, especially those involving access to sensitive data
After a security incident, to assess damage and prevent recurrence
Making It Part of Your Business Rhythm
Here's what one of our Hyplon Security Directors learnt from their time working with boards: the organisations that thrive are those that treat security and privacy with the same rigor as financial management. They don't wait for a crisis. They don't assume everything is fine because they haven't been breached yet.
They bake information security audits into their information security & privacy programs and into their annual planning, just like financial audits. They review the findings seriously. They allocate resources to address vulnerabilities and weaknesses of their business operations. And they communicate the results to stakeholders with the same transparency they'd show for financial results.
Why Human Expertise Still Matters
You might be wondering: isn't using automated security scanning tools or AI-powered audit software good enough?
These tools certainly have their place, they're excellent for continuous monitoring and catching technical vulnerabilities. But they can't replace the value of having an experienced professional conduct a thorough audit.
Here's why:
Critical Thinking: A human auditor can connect dots that software can't. They understand how seemingly minor issues in different areas might combine to create a serious vulnerability. They can assess whether your security measures actually make sense for your specific business context, not just tick boxes on a checklist.
Business Context: Automated tools don't understand your business operations, your industry pressures, or your organisational culture. A human auditor can evaluate whether your security policies are realistic for your team to follow, or if they're creating workarounds that introduce more risk.
Emotional Intelligence: Security isn't just about technology, it's about people. A skilled auditor can read the room during interviews, pick up on cultural issues that might indicate security problems, and communicate findings in a way that motivates change rather than just pointing fingers.
Nuanced Judgment: Not every vulnerability has the same impact. An experienced auditor can prioritize risks based on your actual business operations and help you focus resources where they'll have the greatest effect, rather than generating an overwhelming list of every possible issue.
Practical Recommendations: Anyone can identify problems. A good auditor provides actionable solutions that fit your budget, timeline, and technical capabilities, something no automated tool can do.
The Bottom Line
Your business already understands the value of financial audits. You know they're not optional, not a luxury, and not something you do "when you get around to it."
Is it time to apply that same thinking that financial audits have to information security audits?
