In 2021, we saw an increase in international expansion and need for compliance certifications, and big changes in the privacy landscape.  As we near the end of the year, European organisations should be thinking ahead to the compliance challenges and opportunities that are coming in 2022. It’s always best to be proactive in strategising for future regulations, standards, and policies — even if you feel your business is currently running with all systems fully operational.

Here are a few of the changes, trends, and predictions in the world of European business that I believe will make a big difference throughout 2022.

GDPR and the New Standard Contractual Clauses (SCCs)  

Last year’s court ruling that the EU–U.S. Privacy Shield framework is no longer a valid data transfer mechanism under the General Data Protection Regulation (GDPR) brought about new standard contractual clauses (SCCs), which were approved in June 2021. These were introduced to replace the old SCCs (last updated in 2010) and reflect GDPR data protection requirements. Any new contracts signed after 27 September 2021, are required to use these new SCCs. For contracts signed before that date, organisations have until 27 December 2022, to update the terms to make sure all data transfers are subject to the proper safeguards.

If your business exports European personal data to the U.S., the European Data Protection Board (EDPB) recommends taking the following actions:

1. Create data mapping documents that outline exactly where all data is being transferred to outside countries.
2. Identify your data transfer tool, likely the new SCC (there are a few other options, including binding corporate rules [BCRs]).
3. Determine the effectiveness of laws/practices that apply to the data being transferred in the outside country.
4. If there is an absence of GDPR-equivalent protection, determine appropriate technical and contractual measures to enhance the level of data protection.
5. Carry out any formal procedural steps necessary for those measures to be effective in data transfers.
6. Continuously monitor the level of protection given to the data transferred to the outside country and suspend transfer if protection becomes insufficient.

Governments on both sides of the Atlantic acknowledge that making you, the data exporter, carry out assessments of security frameworks in non-European countries can be a complex exercise. That’s why the EU and U.S. are currently working on a replacement agreement for Privacy Shield, which could be finalised by early 2022.

SOC 2 Continues to Gain Popularity 

It’s undeniable that SOC 2 assessments are rapidly growing in popularity across Europe. One reason for this is that SOC 2 reports have become established as the information security gold standard for selling any type of “X-as-a-service” to businesses based in the U.S. While ISO 27001 is the security standard in much of Europe, U.S. businesses are typically less willing to accept this certification and require a SOC 2 report instead.

In addition to aiding expansion into the U.S., certain sectors in Europe (mainly in the UK) have begun to outright require SOC 2 reports as a prerequisite for doing business. These sectors include banking, insurance, and central government. The fact that UK agencies have begun necessitating SOC 2 for vendors or primes looking to engage in government contracts should be seen as a significant development and potential indicator of future growth of SOC 2 in Europe.

If your business is looking to expand internationally or get ahead of the regulatory curve by obtaining a SOC 2 report, you should start by contacting an accredited, U.S.-based Certified Public Accountant (CPA) firm governed by the American Institute of Certified Public Accountants (AICPA). COVID-era remote SOC services have been helpful for reducing certain expenses, such as travel, that go along with onsite work. However, I believe it’s possible that the AICPA could bring back onsite fieldwork requirements in 2022. Talk to a firm capable of high-quality remote and onsite audits, which provides versatility to keep you covered no matter what.

The Data and Data Governance Acts

As Europe strives to improve its assorted data-sharing mechanisms, there are two initiatives introduced by the European Commission that have been making their way through government: the Data Act and the Data Governance Act.

The Data Act is focused on rights related to the access to and use of data. This includes delineating rights for non-personal internet of things (IoT) data, which is largely regulated through private contracts at the moment. For example, who owns data generated by an industrial machine in a warehouse?

The proposal also aims to refine data portability rights such as those outlined under GDPR Article 20, which was designed to allow consumers to easily switch their data over to a new service provider. The Data Act would provide more detailed technical specifications to make this process more viable, which could theoretically create a more competitive business market for said data.

The Data Governance Act, on the other hand, aims to increase the availability and sharing of public sector data that could be used to power cutting-edge technologies such as artificial intelligence (AI). It also proposes a new model for data intermediation in which consumers would be able to exercise their GDPR rights by sharing data with trusted companies via digital platforms or applications.

While the Data Act and Data Governance Act are still going through the legislative process, it’s worth keeping an eye on these two initiatives that could have major impact on the future of commerce in Europe. Ultimately, they could lead to the creation of a “genuine single market for data” which would have far-reaching implications for business and compliance alike.

Strengthening Your Business’s Compliance Program  

Ensuring the privacy of consumer data and the protection of information will continue to be of utmost importance for your organisation in the coming years. If you’re looking to fine tune your business’s compliance program in order to abide by the latest regulations, while also winning new business, A-LIGN can help. Our expertise spans privacy impact assessments, GDPR-related services, and SOC 2 examinations. We have everything needed to take your compliance program to new heights in 2022.

The HIPAA Safe Harbor Act was designed to limit the fines associated with a data breach for healthcare organizations that implement “recognized security practices.” Do you have your cybersecurity practices in place? Learn more about how to identify what you need to mitigate risk.

Organizations that take proactive steps to implement cybersecurity initiatives to protect their customers and employees are becoming more commonplace. Yet, there are still many examples of organizations falling victim to bad actors’ efforts to steal sensitive information for financial gain.

This scenario has become a more common tale within the healthcare industry, especially as malicious players continue to take advantage of the COVID-19 pandemic. In fact, according to the Cybersecurity & Infrastructure Security Agency (CISA), personal health information (PHI) is estimated to be worth 10-20 times the value of credit card data on the dark web.

Data breaches targeting PHI are clearly not going away, creating a new level of urgency for enhanced cybersecurity within the healthcare industry. As the regulatory oversight in the healthcare industry increased, ensuring Healthcare Insurance Portability and Accountability Act (HIPAA) compliance becomes more valuable to you and your customers than ever.

HITECH and HIPAA Compliance

In an effort to increase cybersecurity initiatives within healthcare organizations, the Health Information Technology for Economic and Clinical Health (HITECH) Act was passed in 2009. HITECH was designed to encourage healthcare providers to adopt electronic health records (EHRs) and increase privacy and security around PHI.

This was an incredibly important introduction to the healthcare industry because it encouraged the adoption of a system that ensured a heightened level of accountability for HIPAA compliance. HIPAA is law in the United States that includes a set of safeguards that covered entities and business associates must follow to protect health information. Before HITECH was passed, organizations could avoid sanctions as a result of a breach of PHI by a business associate, claiming they did not know the business associate was not HIPAA compliant. This was extremely easy to do considering the majority of health records were only kept on paper.

HITECH, however, applies HIPAA Security and Privacy Rules to business associates so everyone is responsible for maintaining HIPAA compliance. As a result, it inspired tougher penalties for HIPAA violations for not only the covered entities but for their business associates, as well. The maximum penalty for a HIPAA violation increased to $1.5 million per violation category per year.

But as we previously mentioned, even the best-laid plans can go awry. So, what happens to the healthcare organizations that do take every precaution possible to protect PHI and still suffer a HIPAA violation?  Let’s find out.

HIPAA Safe Harbor Act

In January 2021, the HIPAA Safe Harbor Act, officially known as H.R. 7898 Bill, was passed by former President Trump as a HITECH amendment. The bill specifically reduces financial penalties and the length of compliance inspections for covered entities and business associates that can prove recognized security practices have been in place for at least one year.

These “recognized security practices” are specifically defined in the bill as, “voluntary, consensus-based, industry led-standards, guidelines, best practices, methodologies, procedures, and processes developed by the National Institute of Standards and Technology (NIST), approaches promulgated under section 405(d) of the Cybersecurity Act of 2015, and other programs and processes that address cybersecurity and that are developed, recognized, or promulgated through regulations under other statutory authorities.”

But, what does this mean? Implementing cybersecurity practices, like those set forth by NIST,  illustrates an organization’s efforts to adequately protect PHI and other sensitive data from cybersecurity risk. This, coupled with an organization’s efforts to follow the basic HIPAA Privacy Rule provisions and safeguards, makes the organization eligible for consideration of a lower fine or penalty from the US Department of Health and Human Services (HHS) Office for Civil Rights (OCR) in the event of a cybersecurity incident.

A-LIGN Can Help

Though most healthcare organizations are familiar with NIST and the HIPAA Security Rule, the reality is that most organizations just don’t know how to properly — or effectively — follow and implement NIST guidelines. According to the Journal of AHIMA, HIPAA audit results from 2016 and 2017 revealed nearly 80% of audited covered entities and business associates demonstrated less than adequate risk management and risk analyses. And to date, the OCR still finds a “lack of thorough risk analysis” in a high percentage of its investigations.

Don’t be caught unprepared — A-LIGN is here to help you navigate HIPAA and HITECH compliance. A-LIGN’s assessors will review your organization’s safeguards to identify areas where you can enhance your information security program to ensure compliance and give you actionable guidance to help you get to where you need to be.

A-LIGN’s experience and commitment to quality has helped more than 300 clients successfully achieve HITRUST certification.

Download our HIPAA checklist now!

It’s a common practice to shorten long and complicated organizational names to more digestible acronyms. However, navigating these acronyms and the programs behind them can sometimes feel like sifting through alphabet soup. That’s why I’m here to help decode one of the most well-known federal programs: the Federal Risk and Authorization Management Program—otherwise known as FedRAMP.  

What is FedRAMP? 

Created in 2011, FedRAMP was designed to provide a cost-efficient and risk-based approach to cloud adoption for federal departments and agencies. The creation of the FedRAMP security assessment framework was based on the Risk Management Framework (RMF) that implements the FISMA (Federal Information Security Modernization Act) requirements, and NIST SP 800-53. FedRAMP allows for cloud service providers (CSPs) to be assessed and authorized by federal agencies.  

FedRAMP provides a standardized approach to security assessment, authorization, and continuous monitoring specifically for cloud products and services relied upon by federal entities that store, process and transmit federal information. This strengthened the federal government’s ‘cloud first’ initiative by enabling federal agencies to contract with approved cloud providers who were best equipped to protect vital government information.  

What are the goals of FedRAMP? 

According to the U.S. General Services Administration (GSA), the goal of FedRAMP is to ultimately accelerate the adoption of secure cloud solutions through the reuse of assessments and authorizations. Achieving FedRAMP authorization will also increase confidence in the security of cloud solutions and security assessments for your organization. Additional goals include:  

• Achieving consistent security authorizations using a baseline set of agreed-upon standards to be used for cloud product approval
• Ensuring consistent application of existing security practices 
• Increasing automation and access to real-time data for continuous monitoring 

How do you know if your organization requires a FedRAMP assessment? 

Simple—any organization that is currently serving, or seeking to serve, cloud products or solutions to a federal agency must undergo a full FedRAMP assessment.  

A recommended first step is to achieve a ‘readiness designation’ from FedRAMP, referred to as FedRAMP Ready.  Optional for agency authorizations and mandatory for Joint Authorization Board (JAB) authorizations, this designation indicates that a Third-Party Assessment Organization (3PAO) attests to a Cloud Service Provider’s readiness for the full FedRAMP authorization process and that a Readiness Assessment Report (RAR) has been reviewed and approved by the FedRAMP PMO. The RAR indicates the CSP’s ability to meet FedRAMP security requirements. 

What are the benefits of achieving FedRAMP Authorization? 

Being FedRAMP Authorized offers a CSP numerous benefits, such as improved real-time security visibility and providing a uniform approach to risk-based management. Your organization will save significant cost, time and resources by de-duplicating efforts related to meeting federal cybersecurity requirements.  Additional benefits include:  

• Increased re-use of existing security assessments across agencies 
• Enhanced transparency between government and CSPs 
• Improved trustworthiness, reliability, consistency and quality of the Federal security authorization process 

The A-LIGN Difference 

As one of the more experienced 3PAOs for FedRAMP, A-LIGN can help CSPs achieve a FedRAMP Ready and/or a FedRAMP Authorized status. If you have any questions or if you would like to learn more about undergoing a FedRAMP assessment, please reach out to one of A-LIGN’s experienced assessors. 

Although you can’t “fail” your SOC 2 report, it can result in report opinions to be noted as “modified” or “qualified”. Learn what this means for your organization.

Is your organization planning for a SOC 2 report? You’re not alone. SOC 2 is gaining in popularity across industries and across the globe. More and more customers are asking for demonstrated SOC 2 compliance, and independent cybersecurity control validation and attestation is becoming necessary to compete for high-priority contracts. Beyond customer demand, SOC 2 ensures that controls are properly implemented and used within your organization, greatly reducing potential security threats.

During the SOC 2 examination process, it’s the auditor’s job to provide an opinion on your organization. It’s during this process that the auditor decides if they agree that the controls pass regulations set forth, or if the controls need “modifications” or “qualifications” to paint a more realistic picture of your organization’s security posture. While you theoretically cannot “fail” a SOC 2 examination, there are SOC 2 reports that have control design or operating deficiencies, resulting in the audit report opinion to be “modified” or “qualified”. There are several reasons why this may occur, including:

• Management’s description of the system is not fairly presented in all material respects
• The controls are not suitably designed to provide reasonable assurance that the control objectives stated in the description of your organization’s system would be achieved if the controls operated as described
• In the case of a SOC 2 Type 2 report, the controls did not operate effectively throughout the specified period to achieve the related control objectives stated in the description of your system
• The service auditor is unable to obtain sufficient, appropriate evidence

Let’s take a closer look at opinion “modification” and “qualification” to learn how auditors may arrive at this conclusion and the strong evidence they would need to provide to support their claim.

What is Opinion Modification?

When determining whether to issue a “modified” or “qualified” opinion on the SOC 2 report, auditors consider the individual and aggregate effect of the identified deficiencies and deviations in your description of the system. They also must consider the suitability of the design and operating effectiveness of the controls throughout the specified period. Your auditor considers factors, such as the following:

• The likelihood that the deficiencies or deviations will result in errors or misstatements in the user’s data
• The magnitude of the errors or misstatements that could occur in the user’s financial statements as a result of the deficiencies or deviations
• The tolerable rate of deviations that the auditor has established
• The pervasiveness of the deficiencies or deviations
• Whether users could be misled if the service auditor’s opinion or individual components of the opinion were not modified

What Are the Three Types of Opinion Modifications?

Audit opinions are crucial to an organization because they speak to the integrity of the executive management team, directly affecting investors and stakeholders alike. Let’s take a look at the three types of audit opinion modifications to learn how your auditor may arrive at this conclusion.

#1. Qualified

“Qualified” opinion modifications occur when there are deficiencies or deviations in your description of the service organization’s system or the design of the controls. This type of opinion modification can also apply to the operating effectiveness of the controls being limited to one or more aspects of the description of your system, or the deviation not impacting all areas of the control objectives across the system.

#2. Adverse

Your auditor considers the need to issue an “adverse” opinion when the deficiencies or deviations in the description of your system, the suitability of the design of the controls, or the operating effectiveness of the controls are pervasive throughout the description or across all or most of the control objectives.

When the auditor has determined that an “adverse” opinion is appropriate, in addition to adding an explanatory paragraph to the report, the service auditor should modify the opinion paragraph of your report. The following is an example of such a paragraph:

In our opinion, because of the matter referred to in the preceding paragraph, in all material respects and based on criteria described in [name of service organization’s] assertion on page [xx], the description does not fairly present the [type or name of the system] that was designed and implemented throughout the period. The controls related to the control objectives stated in the description were not suitably designed to provide reasonable assurance that the control objectives would be achieved if the controls operated effectively throughout the period [date] to [date]. The controls tested, which were those necessary to provide reasonable assurance that the control objectives stated in the description were achieved, did not operate effectively throughout the period from [date] to [date].

#3. Disclaimer

A “disclaimer” modification is noted if the auditor is unable to obtain sufficient, appropriate information. This could be because you refuse to provide a written assertion (after initially agreeing to do so) and law or regulation does not allow the auditor to withdraw from the engagement. The disclaimer opinion modification may also occur if you refuse to provide a representation reaffirming its written assertion, allowing the auditor to withdraw from the engagement.

Paragraph .57 of AT section 801 states that if the auditor disclaims an opinion, their report should not identify the procedures that were performed nor include statements describing the characteristics of an auditor’s engagement, because to do so might overshadow the disclaimer. When disclaiming an opinion, in addition to adding an explanatory paragraph to the auditor’s report, they should also modify the opinion paragraph of the report by adding a sentence such as the following at the end of the opinion paragraph: “Because of the matter described in the preceding paragraph, the scope of our work was not sufficient to enable us to express, and we do not express, an opinion.”

Examples of Findings Leading to Qualified Opinion

Case 1. Modified SOC Report

A modified SOC report can be issued if software developers have the ability to introduce changes into the production environment, and this change could not be detected by detective controls in a timely manner by appropriate members of your organization.

Case 2. Qualified SOC Report

In another instance, a qualified SOC report can occur if you cannot demonstrate that adequate controls are in place to support a control objective described in the system description. This is most easily determined by exceptions noted in the test of controls performed.

If exceptions are noted upon testing a control activity, additional samples are selected to determine if a control is operating effectively. If it is determined that a key control needed to support a control objective is not operating effectively, the opinion within the auditor’s report must be modified to disclose that this control activity is not operating effectively.

Popular Reasons for Opinion Modification or Qualification

There are many reasons why your auditor may feel an opinion “modification” or “qualification” is necessary. In this situation, the auditor will describe the reasons for the modification of the opinion within the “basis for opinion” section of the report, providing you with information that is useful in understanding their findings. Let’s take a look at some of the most popular reasons opinion modification or qualification occurs.

Excessive logical or physical access

In the event that your organization has excessive logical access, for example, your organization has provided too many users with privileged access. For physical access, an example of this would be too many users having access to areas that should have limited access, such as server rooms.

Lack of supporting documentation

Your organization lacks supporting documentation and is unable to demonstrate the evidence that a control is executed.

Failure to properly scope

An example of an organization that fails to scope relevant aspects of its services within the system description would be a payroll company that fails to describe its payroll input, processing, or reporting processes.

Failure to analyze risk

Your organization does not address the inherent risks associated with the service it provides.

Failure to address issues

Your organization fails to address issues or incidents that occur.

Lack of consistency control execution

Your organization lacks consistent execution of controls in different management groups.

Failure to meet all aspects of an objective

Your organization would fail to meet all aspects of an objective or criteria if you were to perform backups but lack the controls to ensure the security of the backups, or if you did not periodically test that the backups actually work.

Prepare for a Successful SOC 2 Examination

Your SOC 2 report opinions being classified as “modified” or “qualified” may result in a negative perception of your executive team and stakeholders. To avoid this outcome, it’s imperative that you properly plan for your SOC 2 examination to ensure success and an in-depth report ready to share with your current and potential customers.

When beginning the SOC 2 compliance journey it is important to engage a professional and certified auditing firm to work with you, helping to mitigate any issues in the examination process. As a licensed CPA firm and one of the top issuers of SOC 2 reports in the world, A-LIGN has the people, process, and technology you need to help your organization reach the summit of your potential as it pertains to compliance.

Your organization can’t afford to lose valuable government contracts. Protect your business by bolstering your organization’s ability to comply with NIST800-171.

Government contracts are highly lucrative, but also tough to secure and manage. That’s because the Federal Government deals with a lot of classified and controlled information on a day-to-day basis. Any contractors or subcontractors who wish to work with the Federal government must, therefore, have security procedures in place to protect that sensitive information.

National Institute of Standards and Technology (NIST) 800-171 is a mandate that states that federal contractors and subcontractors that handle, transmit, or store controlled unclassified information (CUI) must comply with certain standards to protect that data. Compliance with NIST 800-171 is required under Defense Federal Acquisition Regulation Supplement (DFARS) Clause 252.204-7012.

What is Controlled Unclassified Information (CUI)?

CUI is information created or owned by the government that is unclassified, but still very sensitive. As such, it is required that this information be safeguarded from unauthorized exposure. CUI may be in the form of electronic files, emails (or email attachments), blueprints, and more.

The CUI designation was established via an Executive Order in 2010, formalizing the way in which this information is managed and regulated. The National Archives and Records Administration (NARA) operates a CUI Registry with organizational index groupings and CUI categories, outlining all the different types of information that fall under the CUI designation.

What’s Included in NIST 800-171?

In total, NIST 800-171 lists more than 100 different security requirements within 14 control categories:

• Access Control: Requirements related to who has access to business computers and networks, and what types of information different roles are able to access.
• Awareness and Training: Relates to an organization’s ability to understand and identify security threats.
• Audit and Accountability: Requires that an organization sets up user accounts and a structure to restrict access to auditing systems and functions to only administrators and IT personnel.
• Configuration Management: Limits a user’s ability to update security settings or install unapproved software on computers which access an organization’s network.
• Identification and Authentication: These controls regulate password requirements and multifactor authentication systems.
• Incident Response: Requires an organization to design a set of procedures for handling systems issues, and train personnel to report security incidents to administrators and managers.
• Maintenance: Requirements related to removing sensitive data from equipment that needs to be sent out for repair, and ensuring removable media is scanned for malicious software.
• Media Protection: This set of controls regulates how an organization marks CUI, transfers CUI on/off removable media, and encrypts CUI on removable media.
• Personnel Security: Controls regarding disabling and deleting user accounts after employees are terminated or transferred.
• Physical Protection: Outlines the proper use of surveillance and security measures to monitor physical facilities.
• Risk Assessment: Requires organizations to perform routine risk assessments and updates procedures accordingly.
• Security Assessment: Requires organizations to perform routine reviews of security measures and create a plan to track vulnerabilities.
• System and Communications Protection: Outlines the required use of encryption tools and requirements for segmenting system networks into separate portions.
• System and Information Integrity: Controls related to an organization’s ability to monitor systems and identify threats.

What is the difference between CMMC and NIST 800-171?

NIST 800-171 is a voluntary framework that relies on self-attestation of adherence. Unfortunately, over the past few years, it’s been found that an alarming number of contractors are deficient in their management and implementation of NIST 800-171.

The Cybersecurity Maturity Model Certification (CMMC) is a program created to audit compliance with NIST 800-171. The government has tried to implement other rules requiring the NIST 800-171 self-assessment but has struggled with adoption due to limited enforcement —  the most recent attempt is via the DFARS Interim Rule.  This rule specifies that all contractors (prime contractors and subcontractors) post a current assessment into the Supplier Performance Risk System (SPRS) as a requirement to submit bids with the DoD.  The purpose of the DFARS Interim Rule is to increase the protection of unclassified information within the DoD supply chain.

With CMMC, the goal is to provide a verification mechanism to ensure cybersecurity controls and processes adequately protect CUI that resides on Defense Industrial Base (DIB) systems and networks. CMMC goes beyond what’s included within NIST 800-171, requiring additional cybersecurity practices and controls.

It is expected that by 2026 all DoD contracts will require CMMC.

What Happens if I Don’t Comply with NIST 800-171?

As of 2019, the government has the authority to audit contracted organizations for NIST 800-171 compliance at any time. Proper compliance is therefore essential in order to continue working with the Federal Government. Failure to comply with NIST 800-171 could result in:

• Failure to obtain new government contracts
• A loss of current contracts
• Removal from the DoD’s Approved Vendor list

How Can I Become NIST 800-171 Compliant?

As stated above, NIST 800-171 involves a self-assessment process. Professional auditors, like A-LIGN, can assist your organization through that process, by assessing your company’s controls against the published controls in NIST 800-171.  If your organization is looking to complete a NIST 800-171 self-assessment, our auditing experts will help you to complete the NIST 800-171 assessment that is required by the DFARS Interim Rule to satisfy the DoD requirements for protecting CUI.

Our experts understand the nuances of NIST control elements and are familiar with a range of federal compliance mechanisms including NIST 800-53 and FedRAMP. With our breadth and depth of knowledge related to the federal compliance landscape, you can feel confident in your organization’s ability to meet the security requirements outlined by the Federal Government.

Three major changes were announced for CMMC: fewer security tiers, new level definitions and requirements, and allowance for “Plan of Action & Milestone” reports. Learn more about the DoD’s major changes to the CMMC program.

Like everyone else in the world of federal compliance, we’ve been closely tracking the Cybersecurity Maturity Model Certification (CMMC) since the U.S. Department of Defense (DoD) shared its initial draft of the model in early 2020.

The controversial certification program has simultaneously been praised for its potential to raise cybersecurity standards for DoD contractors and criticized for the cost to comply, which is seen as a burden for many small businesses that are executing federal contracts.

On November 4, 2021, the DoD announced several updates and changes with the introduction of “CMMC 2.0,” which clarifies how CMMC will be implemented.

Pairing Down the Scope

The initial CMMC draft established five tiers of cybersecurity requirements for contractors. The tier with which a contractor needs to comply is based on the types of data they work with to execute federal contracts. With CMMC 2.0 there are now only three security tiers designed to simplify the program requirements:

• CMMC Levels 2 and 4 from the original framework are eliminated along with all maturity level processes
• Level 1 Foundational: Includes the same 17 controls outlined in the original CMMC framework, but now only requires an annual self-assessment and affirmation by company leadership.
• Level 2 Advanced: Has pared down the original 130 controls in the original CMMC Level 3 baseline to the 110 controls outlined in NIST 800-171. The DoD is working on a process that will identify “prioritized acquisitions” that must undergo an independent assessment against the new Level 2 Advance requirements on a triannual basis. All other Organizations will only be required to perform an annual self-assessment and company affirmation every year. Organizations that are not required to undergo an independent assessment by a C3PAO may still have one performed and we expect that to be valid the same as those identified as “prioritized acquisitions.”
• Level 3 Expert: This level will replace what was formally known as CMMC Level 5. Details of this level are still being defined. It is expected that this level will incorporate a subset of controls from NIST SP 800-172.

Removing Some Third-Party Assessment Requirements

Under the new model, Level 1 contractors will no longer be required to get a third-party certification. Instead, they will follow a self-assessment protocol which can significantly reduce the cost of compliance for many contractors. These self-assessments will require an annual affirmation by company leadership.

CMMC 2.0 Level 2 assessment requirements have also been updated allowing for self-assessments in some cases, in lieu of the required independent assessments. Under CMMC 2.0, third-party assessments will only be required for companies “supporting the highest priority programs.”

In order to ensure compliance and avoid any penalties, many of which are significant, it’s highly recommended you hire a third-party assessor to complete your CMMC certification.  A third-party assessment will help to accelerate your revenue and market growth to differentiate your business by providing your customers with the assurance that you have the necessary controls in place.

Minimizing Barriers to Pass Assessment

The self-assessments are just one part of changes implemented to remove assessment barriers for contractors. Another key piece is the decision to allow “Plans of Action & Milestones” (POA&Ms) reports in certain cases. With these reports, contractors can pass an assessment even if they do not currently meet every security control required — provided their report properly outlines a plan of action, and deadlines, to meet those controls in the future. We expect the DoD to further refine the POA&M requirements for CMMC 2.0. Expect to see DoD requirements for findings to be resolved within 180 days and guidance on what may constitute a “showstopper” preventing a CMMC Certification.

What’s Next?

Overall, the changes implemented significantly streamline the requirements to comply with CMMC and remove a lot of barriers to compliance for smaller contractors. At this time, it appears that CMMC pilots and contract requirements will be temporarily suspended until the DoD finalizes these CMMC 2.0 changes.

For contractors who are waiting in the wings, the wait continues. We continue to advise that companies prepare for CMMC by staying up to date with changes and announcements from the DoD, researching options for assessment partners (if a third-party assessment is still relevant to your company), and seeking compliance with the existing NIST 800-171 framework in order to give your company a leg up on eventual CMMC compliance.

Our 2021 Compliance Benchmark Report found that more than 71% of organizations say that an increasing focus on privacy has impacted their compliance practices and audits. Learn more about what that impact looks like.

Privacy is at the forefront of regulators’ minds and therefore, greatly impacting compliance programs across the globe. It’s not just regulators who are taking note of new privacy laws — consumers are concerned about their privacy and data, too. A recent KPMG survey noted that 86% of consumers feel a growing concern about data privacy and 78% are worried about the amount of data being collected about them.

With a magnifying glass on privacy concerns — from regulators and consumers — organizations are naturally concerned about their ability to ease consumer fears and avoid massive regulatory fines.

In our 2021 Compliance Benchmark Report, we asked more than 200 cybersecurity, IT, quality assurance (QA), internal audit, finance, and other professionals if the increasing focus on privacy has impacted their compliance practices and audits. An impressive 71% said yes, identifying various ways these impacts are felt across their business.

More Legislation Means More Work

40% of respondents noted that increased privacy requirements and upcoming legislation are necessitating additional work. What exactly does that work look like? Over one-quarter of respondents (27%) said that proposed legislation is pressuring them to stay more current.

With so much legislation coming out from different regions around the world, it’s tough to keep up. Tracking new legislation is becoming something of a full-time job. Legislative sessions around the U.S. — and the world — all run on different timelines (annual, bi-annual, etc.) and at any given moment, multiple pieces of legislation could be at various different stages of introduction, adoption, or amendment. This also means that compliance needs are never-ending. Organizations with customers around the globe are likely finding themselves reviewing new laws and updating privacy practices accordingly on a much more frequent basis.

Impact on Staffing and Training

Not surprisingly, a lot of organizations don’t feel that their team is currently equipped to handle all of this extra work. In fact, 18% of respondents noted that their compliance team doesn’t have the skills/training to deal with privacy. Stack this against the fact that organizations already feel that they have limited staff and resources available to deal with compliance needs, and a huge issue emerges.

Privacy expertise requires granular knowledge of many different pieces of legislation. General Data Protection Regulation (GDPR) remains the gold standard for privacy and, while much of the new legislation coming into existence borrows heavily from it, a patchwork of laws all have different requirements specific to citizens and practices in different regions. Privacy experts must also have an in-depth understanding of the California Consumer Privacy Act (CCPA), a landmark piece of legislation that secured several privacy rights for California consumers, giving them much more control over their personal information being collected and how it’s being used.  Understanding the ins and outs of privacy legislation is a big ask for compliance experts.

To fill the gaps, organizations may look to build out hybrid privacy and compliance teams with experts dedicated to each discipline. We also predict more reliance on technology and automated tools that help organizations track the status of relevant privacy legislation and manage legislation cohesively — identifying areas where guidelines and requirements overlap. A cohesive framework approach will prevent organizations from duplicating efforts unnecessarily and wasting resources in the process.

Security Controls are Top of Mind

In addition to hiring new staff and onboarding new technologies, organizations will also evolve their compliance programs by incorporating more privacy controls. In our survey, 35% of respondents noted that they needed higher levels of security controls built into their internal processes. Privacy isn’t just a consideration for collecting and managing customer data — it’s forcing organizations to become more vigilant about the protection of that data.

We expect this trend will continue as more employees log into work remotely from across the globe, generating new cybersecurity and privacy concerns.

Privacy Laws and Compliance Practices Go Hand in Hand

The increase in privacy laws being introduced on a large scale is poised to have a significant impact on the world of compliance. Organizations are already feeling its effects — with noted gaps in knowledge, skills, and resources available to help them understand and adopt legislation swiftly.

To cope, we believe more organizations will expand their compliance programs moving forward by hiring additional staff, implementing more automated tools, and adopting internal security controls to protect corporate and customer data alike.

Download the 2021 A-LIGN Compliance Benchmark Report

Does your organization need help meeting privacy requirements? A-LIGN’s experts can refine your compliance program today by helping you achieve GDPR, HIPAA Privacy, ISO 27001 and CCPA compliance.

Did you know HITRUST v9.5 can help reduce OCR audit time and minimize penalties?  Learn more from A-LIGN’s Healthcare and Financial Services Knowledge Leader, Blaise Wabo, on why you should select v9.5 when pursuing a HITRUST certification.

Since 2007, the HITRUST CSF has been recognized as a well-rounded and certifiable security framework for organizations of all sizes and industries. With the new CSF v9.5 update, HITRUST continues to demonstrate its value for any organization by offering a reformatted report that stakeholders can leverage during an Office of Civil Rights (OCR) audit, following a cybersecurity event or data breach.

Let’s look closer at the cause for the new report, what HITRUST v9.5 includes, and how this update will benefit your organization.

The Beginning: The HIPAA Safe Harbor Bill

The HIPAA Safe Harbor Bill was signed into law on January 5, 2021, by former President Trump. This law amends the HITECH Act so that the Department of Health and Human Services (HHS) and the OCR must recognize and encourage security best practices for HIPAA compliance.  Specifically, HIPAA Safe Harbor reduces financial penalties and the length of compliance inspections for covered entities and business associates that can prove they’ve had “recognized security practices” in place for at least one year.

The HIPAA Safe Harbor bill changed the cybersecurity industry in a big way.  If your organization processes Protected Health Information (PHI), Electronic Protected Health Information (ePHI), or Personally Identifiable Information (PII), you could be the target of a cybersecurity breach and therefore, an OCR audit.  If this situation occurs, the HIPAA Safe Harbor bill covers you and acts as a layer of security for your organization if you have a cybersecurity program in place.

HITRUST CSF is one reliable way to achieve HIPAA compliance. In fact, it is the only way to become officially certified in HIPAA compliance. For this reason, the HITRUST CSF is often utilized, and sometimes required, by organizations in the healthcare industry.

What is the HITRUST CSF?

The HITRUST CSF is a scalable and extensive security framework used to efficiently manage the regulatory compliance and risk management of organizations. By unifying regulatory requirements and recognized frameworks from ISO 27001, NIST 800-171, HIPAA, PCI DSS, GDPR, and more into one comprehensive system, the HITRUST CSF streamlines the audit process by assessing once and reporting against multiple framework requirements.

Thanks to its ability to combine several assessments and requirements into one framework, the HITRUST CSF allows clients to decide what they want to test against and to evaluate the controls based on that level of risk. This “assess once, report many” approach means that assessors are performing several different audits, but the organization feels like they’re only undergoing one. Because of this benefit and its exhaustive focus on security, the HITRUST CSF has been adopted by organizations across different industries.

What’s new in HITRUST v9.5?

When the HITRUST approach is fully implemented and HITRUST CSF Certification is achieved, this ensures covered entities and business associates are able to meet the compliance requirements of the HIPAA Security and Breach Rule.

With the release of HITRUST v9.5, a reformatted report will be generated during an OCR audit that is part of the MyCSF Compliance and Reporting Pack for HIPAA.  According to HITRUST, this new report:

• Is formatted by HIPAA controls and maps the applicable HIPAA requirements to your HITRUST CSF Assessment
• Provides the ability to select only the regulation subparts that the OCR requests in the event of an audit
• Maps each requirement to your corresponding policies and evidence for submission to the OCR

What Does HITRUST v9.5 Mean for Your Organization?

The new MyCSF Compliance and Reporting Pack for HIPAA enable organizations to more quickly and seamlessly submit and present compliance evidence.  If you already hold a HITRUST v9.3 or v9.4 certification, HITRUST will be unable to create an OCR package upon an audit.  In order to better safeguard your organization, you will need to resubmit your assessment for HITRUST v9.5.

If your organization handles PHI, ePHI or PII data, there are two main reasons you may be selected to undergo an OCR audit.  The first is based purely on the number of records that you own and that may have been compromised due to a security breach.  The second reason you may be selected is based on how you responded immediately following the breach.  There are defined laws in place regarding the aftermath of a security breach and the order in which you need to notify all parties:

1. Notify affected individuals
2. Notify the Secretary of Health and Human Services (HHS)
3. Alert the media (in certain circumstances)
4. Notify covered entities if occurred at or by a business associate

The A-LIGN Difference

We encourage all covered entities and business associates pursuing a HITRUST assessment that may be subject to an OCR audit to select version HITRUST v9.5.

A-LIGN’s experience and commitment to quality has helped more than 300 clients successfully achieve HITRUST certification. Our diligent audit process helps you prepare for the HITRUST assessment, and our team of HITRUST experts is here to answer any questions you might have through every step of the assessment.

Download our HITRUST checklist now!

Is your organization planning for a SOC 2 report?  You’re not alone.  In our 2021 Compliance Benchmark Report, SOC 2 emerged as the most popular audit for cybersecurity, IT, quality assurance (QA), internal audit, finance, and other professionals across a variety of industries.

SOC 2 is gaining in popularity across industries and across the globe. More and more customers are asking for demonstrated SOC 2 compliance, and independent cybersecurity control validation and attestation is becoming necessary to compete for high-priority contracts. Beyond customer demand, SOC 2 ensures that controls are properly implemented and used within your organization, greatly reducing potential security threats.

In our 2021 Compliance Benchmark Report, we asked more than 200 cybersecurity, IT, quality assurance (QA), internal audit, finance, and other professionals about which audits are most important to their business.

The answer? Almost half of our respondents (47%) named SOC 2 as the most important audit, attestation, or assessment. SOC 2 examinations were designed to assist organizations of any size, regardless of industry and scope, by ensuring the personal assets of their potential and existing customers are protected. Interestingly, this audit edged out the popular ISO 27001 security framework — which only 39% of respondents labeled as the most important audit for their business.

The findings indicate that more is more when it comes to cybersecurity.  Since organizations can potentially be held liable for inaccurate financial reporting, security breaches, disclosure of confidential or private information, system downtime and incorrect processing of transactions, they now find providing the extensive information required in a SOC 2 report attests to their security posture in areas including:

• Access control
• Passwords
• Change management
• Incident response
• Logging and monitoring
• And other critical areas of data protection

Read on for more insights about why organizations are prioritizing SOC 2 assessments.

A Way to Build Customer Trust

The popularity of SOC 2 can be driven by customers, external stakeholders, or a business’ internal operations team. 33% of our survey respondents reported that customers most frequently ask for SOC 2 when doing their due diligence on how a company secures its data. More and more customers — especially those in large and highly regulated industries — are demanding this type of assurance from their vendors. Although SOC 2 is a voluntary standard, customers appear to put their trust in its framework and feel confident organizations that complete SOC 2 secure their systems and networks in a professional, process-oriented manner.  SOC 2 ensures organizations can protect against unauthorized access, unauthorized disclosure or damage to their systems.

Obtaining a SOC 2 report also shows customers a level of maturity in your IT security. The ability to provide a SOC 2 report ensures the customer that you prioritize the protection of their most valuable asset, data.  You can also utilize your SOC 2 to position your organization well against competitors, allowing your customers to easily see the value you provide.

Plans are in Place

Over the next 12 months, our survey respondents will remain busy with SOC 2-related tasks. A total of 43% of respondents indicated that they were currently conducting an audit or planning to conduct a SOC 2 audit in the next 12 months. In some industries, that number was significantly higher:

• Technology: 82%
• Finance: 75%
• IT Services: 75%
• Healthcare: 65%

For technology, healthcare and finance organizations, SOC 2 was the most in-progress and planned audit — edging out others like HIPAA and PCI DSS. For IT services, ISO 27001 was a slightly higher priority, at 83% to SOC 2’s 75%.

For organizations that are still in SOC 2 planning stages, there are plenty of ways to prepare for a successful audit. The first step is to make sure you choose your auditing firm carefully. Many vendors sell software to help an organization prepare and gather data for an audit but aren’t licensed to conduct the audit and issue SOC reports themselves. Choosing an auditing firm that is certified to not only help you prepare but also conduct the actual audit will make for a more seamless process.

Key Takeaways

When surveyed, 64% of respondents stated they have conducted an audit or assessment to win new business and 14% responded having lost a business deal because they were missing a compliance certification.  Although SOC 2 is optional, it is quickly becoming the cost of doing business and onboarding new clients.  More and more customers are requesting SOC 2 reports to ensure controls are properly implemented and used within your organization, reducing security threats and keeping their assets safeguarded.

The benefits of having a SOC 2 report are clear.  Investment today ensures success in the future — with an in-depth report complete and ready to share with customers, organizations can close deals without delay and demonstrate a commitment to ensuring the personal assets of their potential and existing customers are protected.

Download the 2021 A-LIGN Compliance Benchmark Report