CS Professional · Internal and Forensic Audit · Emerging Issues and Challenges
During an internal audit of Bharat Pay Solutions Pvt Ltd, the auditor notes that the company's customer database is encrypted at rest but backups are copied to an external drive without encryption and carried by a vendor. What is the most significant risk?
The most significant risk is loss of confidentiality of customer data. Although the live database is encrypted, unencrypted backups carried by a vendor can be read if the drive is lost or intercepted, which undermines the protection applied to the primary data.
- ALoss of confidentiality of customer data if the drive is lost or interceptedCorrect
- BReduced processing speed of the database
- CDuplication of transactions in the ledger
- DOverstatement of IT assets in the books
Explanation
Unencrypted backups carried outside the premises can be read by anyone who obtains them, defeating the encryption on the primary database. The risk is a confidentiality breach, not a performance, duplication or valuation issue.
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