Keeping The Auditor Away: DevOps Audit Compliance Case Studies

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GenOrganizations and development teams are moving beyond waterfall models to those embracing a continuous delivery/DevOps-style set of processes. The deployment of doing tens, hundreds, or even thousands of deploys per day as 'normal' does not align to the SDLC, separation of duties, and common controls expected by auditors. In this presentation, we will describe what auditors look for in a compliance audit, how to develop alternate control procedures that fulfill those reporting requirements, how to avoid “red flags” that indicate inadequate controls, and real world case studies and reporting artifacts. Gene Kim has been studying high performing IT organizations since 1999 and helped develop the SOX scoping guidelines with the Institute of Internal Auditors in 2005. James DeLuccia IV is the leader for the Ernst & Young Americas Certification Services, James oversees all of the audits against common industry standards, and champions several global program implementation roll-outs. Developing and 'translating' the control environment behaviors of clients, such as Google, Amazon, Workday, and others is difficult. This discussion will bridge the needs of auditors with the community of developers by sharing examples, discussing the assurance expectations, and how to communicate to pass an audit.

Transcript of Keeping The Auditor Away: DevOps Audit Compliance Case Studies

  • @RealGeneKim @jdeluccia Session ID: Gene Kim James DeLuccia Keeping The Auditor Away: DevOps Audit Compliance Case Studies
  • @RealGeneKim @jdeluccia OMG. Developers Deploying Code?!?
  • @RealGeneKim @jdeluccia Introductions Gene Kim Co-author of "The Phoenix Project Founder and CTO of Tripwire, Inc. for 13 years Worked with Jez Humble (co-author of Continuous Delivery book) to benchmark 14K technology organizations Co-chaired SOX-404 Scoping Committee at the Institute of Internal Auditors (2005) James DeLuccia Author, IT Compliance & Controls Ernst & Young, leader for Americas Certification & Compliance Services Focus: startups, technology, governance, security Patent holder - crypto privacy comparison system
  • @RealGeneKim @jdeluccia Golly, Why Are You Attending This Talk? How many people have to deal with compliance? On a scale of 1-10, how painful are your interactions with auditors? (1=delightful, 10=awful beyond words?)
  • @RealGeneKim @jdeluccia Problem Statement Gene DevOps and continuous delivery introduce problems with audit, because the work patterns are so different than traditional SDLC Agile also had issues (e.g., testing at end of project, requirements phase at the beginning), but is not as radical as DevOps tens/hundreds of deploys/day (change is risk; cant rely on change approvals, separation of duty) No widespread agreement on what DevOps control requirements should look like James Auditors must work off a mature and testable environment They must stake their livelihood that what you say is correct, completely A partnership is needed between you and them to ensure such an environment exists (of course, it also needs to operate and be amazing .. but that is another talk)
  • @RealGeneKim @jdeluccia Agenda The Top-Down, Risk Based Audit Process What Goes Wrong Scoping Control Testing Scenarios From The DevOps Audit Defense Toolkit Ask An Auditor Anything!
  • @RealGeneKim @jdeluccia The DevOps Audit Defense Toolkit James DeLuccia IV Jeff Gallimore Gene Kim Byron Miller
  • @RealGeneKim @jdeluccia What Is Audit Management is defined as those who are there to achieve the goals of the organizations, which includes the officers of the company (e.g., CEO, CFO, etc.), executives and managers, as well as everyone who reports to them. Includes some board of directors, GRC departments Audit is defined to be the function inside the organization that resides outside of management to serve as an independent, objective source of assurance that the organization can achieve its goals. Includes internal auditors, external auditors (regulators, assessors, etc.)
  • @RealGeneKim @jdeluccia Internal Controls a process, effected by an organizations board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives related to operations, reporting, and compliance. - Operations (effectiveness, efficiency) - Financial Reporting (accuracy of account balances and values) - Compliance (with relevant laws and regulations, contractual obligations: PCI DSS, US Export Law, FEDRAMP, SOC-2) Source: (Committee of Sponsoring Organizations for the Commission on Fraudulent Financial Reporting)
  • @RealGeneKim @jdeluccia How Audit Plans Are Built And Run Business objectives Risks Control objectives Control procedures Unfortunately, most contact with auditors start with control procedures Its totally appropriate to ask to show work and start from beginning...
  • @RealGeneKim @jdeluccia The Audit Cycle Planning Gaining an understanding of the organization Scoping Sampling, reporting period, types of evidence needed, recipient of report Schedule Fieldwork Controls testing Substantive testing Reporting Management responses Attestation by auditor and delivered to regulator/clients
  • @RealGeneKim @jdeluccia When Scoping Goes Wrong
  • @RealGeneKim @jdeluccia When Scoping Goes Wrong 2001: Enron fails ($63B market cap), Arthur Andersen dissolution 2002: WorldCom (peak $117B market cap) Leads to Sarbanes-Oxley Act of 2002
  • @RealGeneKim @jdeluccia When Scoping Goes Wrong Source: KPMG
  • @RealGeneKim @jdeluccia Problem: Bottom Up Auditing Source: ISACA
  • @RealGeneKim @jdeluccia Analysis: Audit control testing work was scoped properly, linking controls to compliance objectives and risk. Control failures must result potentially undetected material financial reporting errors The Problem: Improperly Scoped Audits
  • @RealGeneKim @jdeluccia Financial Reporting Material Weakness What happens when an audit generates a material weakness?
  • @RealGeneKim @jdeluccia Under-Scoping Operating Risk
  • @RealGeneKim @jdeluccia When we dont understand why we are being audited Why are we doing this audit? (customers, SOX, regulatory; who is it for?) When we are asked for something we dont have (e.g., evidence of SoD or change approvals) What is the control objective? Can we rewrite the control procedure for this asset? Do this before the auditor shows up When Auditors Attack Unexpectedly These are delicate conversations, with potentially large impacts on scope, cost, risk...
  • @RealGeneKim @jdeluccia If we are reacting to these conversations before weve done any of our homework, we may be trouble Extra work (average time to respond to audit is 40 hours; thats one Dev sprint) Audit cost and schedule overages: a 3 hour audit test just turned into a 16 hour audit project Reduced confidence from auditors, increased visibility from audit and management When Auditors Attack Unexpectedly The DevOps Audit Defense Toolkit
  • @RealGeneKim @jdeluccia The DevOps Audit Defense Toolkit James DeLuccia IV Jeff Gallimore Gene Kim Byron Miller
  • @RealGeneKim @jdeluccia Practice: Enabling A Shared Understanding Source: DevOps Audit Defense Toolkit
  • @RealGeneKim @jdeluccia Practice: Enabling A Shared Understanding Source: DevOps Audit Defense Toolkit
  • @RealGeneKim @jdeluccia Practice: Enabling A Shared Understanding Source: DevOps Audit Defense Toolkit
  • @RealGeneKim @jdeluccia Walk Through Of DevOps Risk And Control Strategies What does an effective DevOps control environment look like?
  • @RealGeneKim @jdeluccia DevOps Orgs Actually Love Process Facebook values people, tools, and way, way down the list is process. Jay Parikh VP Infrastructure Engineering, Facebook Not true! They are conflating process and approvals!
  • @RealGeneKim @jdeluccia High Performing DevOps Orgs Source: 2014 Puppet Labs State Of DevOps 30xmore frequent deployments 8,000xfaster lead times than their peers
  • @RealGeneKim @jdeluccia High Performing DevOps Orgs Source: 2014 Puppet Labs State Of DevOps 2xhigher change success rates 12xfaster mean time to recover (MTTR)
  • @RealGeneKim @jdeluccia High Performing DevOps Orgs Source: 2014 Puppet Labs State Of DevOps more likely to exceed profitability, market share & productivity goals 2x higher market capitalization growth over 3 years* 50%
  • @RealGeneKim @jdeluccia Top Predictors Of Performance Version control of all production artifacts Continuous integration and deployment Automated acceptance testing Peer-review of production changes (vs. external change approval) High trust culture Proactive monitoring of the production environment Win-win relationship between Dev and Ops
  • @RealGeneKim @jdeluccia DevOps Orgs Need Hardcopy DevOps has higher automation and closer monitoring controls than traditional deployment environments and therefore reduced points for human failure The documentation of ephemeral systems, tools, and deployment processes into a hardcopy breakdown will communicate and simplify this management long term.
  • @RealGeneKim @jdeluccia Practice: Document Risks & Control Strategy Source: DevOps Audit Defense Tool