By Richard E. Mackey, Jr.
Formal risk assessments are processes that consider the value of the assets that are at risk, the business and technical threats to the assets, and the effectiveness of the business and technical controls that are designed to protect the asset. In the end, a risk assessment gives the organization an objective measure of the risk to an asset. The process forces the organization to acknowledge and accept the risk, eliminate the risk by terminating a business practice (e.g., stop offering access to the asset via the web), transfer the risk by outsourcing or insurance, or, more often than not, select additional more effective business or technical controls to reduce the risk.
The benefits of formal risk assessments
Conducting formal assessments within a risk management program a number of benefits.
Formal assessments: 1. Require business and technical representatives to reason about risk in an objective, repeatable, way 2. Require consistent terminology and metrics to discuss and measure risk 3. Justify funding for needed controls 4. Identify controls that provide can be eliminated 5. Provide documentation of threats that were considered and risks that were identified 6. Require business and IT to acknowledge the responsibility for ownership of risk 7. Require organizations to track risks and reassess them over time and as conditions change
Why are risk assessments so important in compliance?
There is a good reason for so many regulations to include a requirement for risk assessment. It is only sensible that a regulatory body cannot dictate the controls that are necessary in every environment. What might be appropriate for a large company with a significant web presence could be overkill for small organization with a few customers. If the threats are different and the environment is different, it stands to reason that the controls may be different.
It is interesting to note that even the most prescriptive standards (e.g., PCI DSS) require risk assessments to determine the need for and effectiveness of controls. On the less prescriptive side of the regulatory spectrum, HIPAA and FISMA have very few required controls but expect the entire program to be risk based. This approach makes sense when one standard needs to apply to everyone.
Choosing a risk management framework
If your organization needs to comply with FISMA, your risk management approach should be based on NIST Special Publication 800-39. This document provides an overall description of the risk management lifecycle. Risk assessment, which is one part of the risk management program, is described in NIST Special Publication 800-30 (which is being revised). SP 800-30 provides a stepwise method for assessing risk that can be customized for a given organization.
Another good source of risk management documentation is provided by the OCTAVE project developed at Carnegie Mellon University. Both NIST and OCTAVE provide excellent sources for building a risk management program that help organizations meet their security and regulatory requirements.
This article was originally posted at http://www.darkreading.com/blog/231600781/the-criticality-of-risk-assessments-fisma-hipaa-and-other-regs.html