Specialized Areas
Third-Party and Vendor Audits
Approach to auditing external service providers and vendors
2025-12-01
Third-Party and Vendor Audits evaluate risks associated with external service providers. As outsourcing increases, vendor risk management becomes increasingly critical.
🎯 Vendor Audit Objectives
- Assess vendor control environment and risk management
- Verify compliance with contractual terms and SLAs
- Evaluate data security and privacy protections
- Review business continuity and disaster recovery plans
- Assess financial stability and operational capability
📋 Risk-Based Vendor Selection
Prioritize audits based on:
- Criticality: Impact if service fails
- Data Sensitivity: Access to confidential information
- Financial Exposure: Contract value and dependencies
- Regulatory Requirements: Compliance obligations
- Past Performance: History of issues or concerns
🔍 Audit Approach
- Review SOC 2/ISO certifications and third-party assessments
- Conduct on-site visits for critical vendors
- Test controls through questionnaires and documentation review
- Monitor ongoing performance and compliance
- Validate incident response and issue resolution
💡 Best Practice
Include "right to audit" clauses in vendor contracts. This ensures your organization can conduct audits or review third-party assessments when needed.