Antiviruses are no longer the primary method of combating cyber threats. To conduct successful and secure acquisitions and financings, companies need to conduct a full cybersecurity audit. Many people find this process difficult and time-consuming because it requires examining a lot of sensitive data, but neglecting this process will increase the risk of disrupting the transaction and the security risk that will result in a large loss of funds. In this article, we will learn why cybersecurity audits are so important for M&A deals.
How risk is measured
A company’s cyber risk capabilities are tested by comparing its performance to some well-established accepted security standards. But there are also different ways to test, for example, in addition to the method already mentioned, there are also labor costs and the reliability of the final report taken into account. But the evaluation according to an accepted standard is considered to be the most convenient and reliable.
Now, the main system for cyber risk assessment is the CSF, as it has been recognized as the best security standard in the United States, and also has interest overseas in America.
A company’s cybersecurity assessment should occur around the same time as the due diligence itself, that is, within two to three months.
Typically, the assessment process goes as follows: the company hires a team of experts, to conduct the assessment, who circulate throughout your company, gather the necessary information, and then based on this information provide an itemized report on the results of the audit. However, in today’s world, this method is more old-fashioned and completely impractical, as it takes too much time, and creates even more turmoil during due diligence. When there are too many outsiders in a company, they get in the way of employees’ work.
That’s why companies are increasingly using an automated assessment process based on recognized safety standards. The process takes place through an audit platform and fits into a shorter timeframe, creating no hassle and ensuring a reliable result.
The need for open-source audits
When cybersecurity audits take place during IT mergers and acquisitions, you need to be especially careful. The fact is that most such organizations use open source applications for important workloads and such components make up the majority of all application code.
Also, most companies do not even track the use of this open-source code, relying excessively on developer self-management or spreadsheets. Because of this, they can’t accurately inventory applications using open source, and so they put not only themselves but also the buying companies at risk.
All because, as of 2018, more than 7,000 vulnerabilities have been found in such source code programs, and they’ve surely only grown in four years. Far more than one company has suffered a hack in that time because of the inability to monitor and fully analyze open-source data, so when using these components, companies should be sure to monitor open source licensing. If an organization fails to comply with licensing obligations, they can set up a potential buyer, as they may end up losing the rights to use the code and have problems with IP ownership.
To conduct audits safely, comfortably, and more expeditiously, use a virtual data room. Exchange the data you need in a secure space, interact with customers and manage your data easily and securely.