Tuesday, March 20, 2007

Auditing Privacy Part 1 - Ethics and the Canon

It would comfort many compliance auditors to discover the ultimate checklist and tear after their organization's privacy program, collecting tick marks and developing the dreaded deficiency finding. I say to them, "Google is your friend." For the more enlightened internal auditor, the first step in evaluating their organizations privacy practices should be a step back.

The Canon
There are best practices, and there are benchmarks. There are torts, laws, and rational fear of the irrational regulator. However, for most every auditable area there is also The Canon. Take a file to the gilded crust of Sarbanes-Oxley and the PCOAB (and all their works and all their ways), you eventually uncover the Generally Accepted Accounting Principles. Take a snowblower to the myriad layers of dust and ash of the Code of Federal Regulations. If you squint and hold your head just right, you'll see a vague outline of the Decalogue. And somewhere below ornate filigree and baroque ornamentation of HIPAA, Gramm Leach Bliley and SB1386 is the shape of the Fair Information Practices of the US Department of Health, Education and Welfare, 1973.

From the link above, here are the five practices of the modern privacy canon:

  1. Collection limitation
  2. Disclosure
  3. Secondary usage
  4. Record correction
  5. Security
These five principles will be your mantra for your audit. They will guide your question and inform your issues. Advanced practitioners may chose from the following according to their path:

The 10 AICPA's Generally Accepted Privacy Principles

The OECD Guidelines on the Protection of Privacy and Transborder Flows of Personal Data

The Ethos
Like the Torah, the Sermons of Buddha, the Qur'an, the Gospels, or Fermat's Principle, a canon is only meaningful if applied. You must ask the CEO, the CIO, the Chief Marketeer, the General Counsel, and listen, and interpret their answers accordingly. Are the principles used as values to guide their decisions, obstacles to be worked around, or are they simply unknown? Read your corporate policies regarding privacy. Do you see in them evidence of the Fair Information Practices, or do they appear to be more oriented to a specific set of industry specific regulations? Interview the folks who handle the data. Do they treat the data with the care they would treat their own? The answers to these questions will begin to lead you to determining if your organization has the ethical basis for a privacy program.

What Does This Mean?
A compliance oriented organization may maintain reasonable concordance with Fair Information Practices without even knowing what they are. However, the organization may be reactive, and inefficient. The organization's privacy direction will be dictated by outside entities, rather than developed within.
A organization with a firm foundation in privacy practices, coupled with an ethic duty to privacy, will be more efficient, more effective, and retain a better reputation in the face of an incident.

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