GDPR compliance audit & checklist

The General Data Protection Regulation (GDPR) protects the online privacy of European Union (EU) residents. Companies that sell to or collect data from EU residents must comply with GDPR rules. Compliance entails following complex rules about gathering data, requesting consent, and securing personal information.

This article will simplify the GDPR compliance task. We will briefly discuss the role audits play in GDPR compliance. We will also provide a checklist as you prepare for a comprehensive compliance audit.

Key takeaways

GDPR compliance audits assess privacy and data protection measures. They allow organizations to meet their privacy and security obligations under EU regulations.
Organizations should generally schedule an annual GDPR compliance audit. Audit frequency depends on the size of the company and its economic activities.
Audits cover critical areas like risk management, governance, employee roles and responsibilities, and process analysis. They assess the organization's Privacy Information Management System (PIMS) and Information Security Management System (ISMS). And audits consider how well the organization protects the rights of data subjects.
Effective auditing relies on documentation. Companies must maintain logs and follow robust data protection policies. They should create systems that record critical data and make this information available to auditors.

Compliance audits or conformity reviews are assessment exercises carried out by external professionals. A conformity review determines whether an organization complies with GDPR rules. And it makes recommendations about making policies and systems compliant. Auditing has a range of significant benefits.

Ensuring data protection. GDPR audits inform companies about gaps in their data security systems. They detect exposed personal data. And they identify areas where the company is vulnerable to external attacks.
Regulatory compliance. Compliance audits check whether internal processes follow GDPR rules. They compare existing data protection and privacy measures with EU requirements. And they provide a list of recommended actions to remedy any discrepancies.
Improved reputation. Data breaches lead to reputational damage and lost profits. Compliance audits cut the risk of suffering data loss. They suggest cutting-edge security controls. They recommend policy changes to cut security incidents. This helps to maintain the company's public reputation.
Avoidance of penalties. Non-compliance with GDPR eventually leads to financial penalties. GDPR audits focus on potential violations. This reduces the likelihood of regulatory fines.
Efficient third-party relationships. Audits assess whether existing Data Processing Agreements (DPAs) are fit for purpose. They check third-party arrangements and ensure that controllers and processors handle data appropriately.

The European Union does not set a fixed schedule for compliance auditing. Businesses are responsible for arranging audits. However, most experts recommend auditing GDPR compliance at least once per year.

Annual auditing is just a recommendation. Some organizations may need to carry out more frequent audits. When determining your audit schedule, the following factors should come into play:

Company size. Larger companies have more complex data processing operations. Complex data handling raises the risk of compliance violations. Frequent auditing is essential.
Organizational growth. If your company is in a growth phase, scheduling frequent audits makes sense. As companies grow, data processing needs change. Data protection issues may arise, leading to GDPR violations.
Geographic spread. Companies operating across many jurisdictions should have a robust auditing schedule. They must check all cross-border data transfers to ensure GDPR compliance.
Economic sector. Some industries require more frequent auditing due to the nature of their operations. For example, healthcare companies should frequently assess data protection and privacy practices.
Compliance history. Companies with a poor compliance record should frequently audit their GDPR practices. The same applies to controllers who have experienced problems with non-compliant third-party processors.
Cost. GDPR compliance audits are not free. Smaller organizations may only be able to afford annual assessments by external professionals.

Organizations must balance the need for compliance auditing with the cost and disruption that audits bring. Auditing is also not a one-size-fits-all solution. Companies can arrange in-depth, complex audits that cover every possible compliance issue. But they can also bring in consultants for brief assessments.

Whatever solution an organization chooses, the GDPR audit must deliver compliance insights and lead to improvements that address regulatory risks.

Thorough preparation is essential to extract maximum value from a GDPR audit.

A well-prepared company is easy to audit. External assessors can locate the information and personnel they need. And they can understand internal security and privacy processes. Follow this checklist to be well-placed when GDPR auditors arrive.

Address governance
Manage risks
Executive support
Data Protection Officer (DPO)
Staff roles assessment
Data processing impact assessments
Privacy Information Management System (PIMS)
Information Security Management System (ISMS)
Protecting user rights

If you cover every area listed, you will be well-prepared for a compliance audit. But how can you tackle each relevant topic? Let’s dive into compliance in more detail and explore each step in the process.

1. Address governance issues

GDPR compliance focuses on six core principles. These principles should form the basis of your governance strategy:

Lawful data processing
Data collection for a specific purpose
Minimal data collection to meet core goals
Collecting accurate data and allowing changes if users requesting
Minimal data storage
Data integrity and privacy

Organizations must change data protection systems that do not adhere to these principles. Companies also need to gather information to show that they follow GDPR principles. Overall, the compliance audit should have two areas of focus:

Ensuring accountability by recording data processing
Identifying compliance violations and taking action in response

2. Identify and mitigate compliance risks

The next stage in GDPR audit preparation is assessing and addressing regulatory risks.

Risk assessments allow businesses to identify potential GDPR violations. They determine whether a privacy risk is likely to occur. They also assess the severity of potential risks. This assessment process makes focusing on critical policies or security controls easier.

Under GDPR, the most common risk assessment framework is a Data Protection Impact Assessment (DPIA), which is also known as a Privacy Impact Assessment (PIA). DPIAs relate to data protection issues.

GDPR requires a DPIA before companies can begin data processing. PIAs are also essential when starting relationships with third-party data processors. Elements should include:

Whether data processing infringes user rights under GDPR
Whether security controls ensure user privacy
How the company or organization will manage risks to privacy or user rights
Whether compliance teams have added specific privacy risks to the corporate risk register

For example, a company wants to leverage analytics tools to understand customer behavior on its eCommerce store. This type of analysis is permissible under GDPR. However, the company must use a DPIA to ensure minimal data collection and avoid infringing user rights.

Gathering information about items browsed on the company website is allowable. But tracking the online browsing history of visitors would probably not be allowed. The data privacy compliance assessment identifies the scope of data processing. It keeps data handling within EU rules.

3. Obtain executive support

GDPR compliance audits need high-level backing. Data Protection Officers should seek executive support before and during audits. Corporate managers should know about GDPR risks and privacy policies. They should use the GDPR audit to spread compliance practices throughout the organization.

4. Appoint a Data Protection Officer (DPO)

Data Protection Officers manage the GDPR compliance process. Regulations do not require a DPO for all businesses.

DPOs are also required when data processing involves large-scale user monitoring. They are mandatory for any public authority, and organizations that handle the data of criminals or victims also need one.

Due to the complexity of GDPR compliance, assigning a DPO is critical. Skilled and responsible DPOs steer compliance strategies and prepare audits. They track regulatory changes and liaise with executives to make GDPR compliance a corporate priority.

5. Assess staff roles and responsibilities

Preparing for a GDPR audit should include an evaluation of employee roles. For example, every department should have a privacy lead. This officer tracks compliance and works with the DPO to encourage compliant behavior.

An HR or compliance team member should be responsible for managing GDPR training. This officer monitors training schedules. They ensure employees understand privacy and data protection rules. The training officer also manages onboarding processes. This checks that new hires grasp their privacy responsibilities.

Compliance audit teams should also assess staff roles to cut access to sensitive data. Employees should only have access to personal data that fits their role and workload. Access management systems should block access to all other data.

6. Audit the scope of your data processing

Document data collection methods used by the organization. Record how the company processes that data. Include data-sharing arrangements with joint controllers or data processors.

Identify databases used for storing personal data. Record security controls in place to protect those databases. And log data locations. Assess the legal basis for transferring sensitive personal data across international borders.

Ensure that every data processing operation has a lawful basis under GDPR. Use Article 6 as a reference point and note data practices that lack a lawful foundation. Revisit these processes to establish whether they meet GDPR compliance obligations.

7. Privacy Information Management System (PIMS)

Privacy Information Management Systems make it easier to manage GDPR documentation. This is a core compliance task because GDPR requires a complicated web of documents.

Companies must manage privacy policies and notices. They need to draft accurate consent and subject access request forms. And businesses need data protection policies that accurately define their security systems.

PIMS systems collect this documentation and make it available to data protection teams. They follow the recommendations of ISO 27701—an international privacy management framework. This ensures that privacy management meets GDPR standards and covers all applicable areas.

8. Information Security Management System (ISMS)

ISMS is another critical ally in the GDPR auditing process. Information Security Management Systems follow ISO 27001:2013. This framework relates to information security. It makes a series of recommendations about:

How to protect data at rest and in transit
Ensuring data integrity
Testing information security systems to find weaknesses
Protecting hard copies of confidential data

GDPR does not specify legally required security controls. However, the regulations demand “data protection by design and by default.” ISMS systems are designed using the ISO framework to meet GDPR standards for data security.

9. Protecting user rights

GDPR compliance audits focus on whether organizations protect user privacy rights. Individual rights are at the heart of the regulations. Respecting user rights should be an overriding focus for compliance strategies.

During your audit preparations, consider which of the following user rights apply. And assess whether existing systems allow users to exercise those rights:

The right to information about data collection and processing
The right of access to individual records
The right to amend user records
The right to erase customer data
The right to prevent processing if desired
The right to move data between locations and organizations
The right to complain to the data controller
Rights related to opting out of automated data processing

Failing to allow users to exercise their rights is a critical GDPR violation. Integrate user rights into your risk assessment procedures. If data handling operations violate privacy rights, make appropriate changes.

GDPR is not a static body of regulations. Data controller and processor requirements have changed and will change in the future. Companies need to adapt as regulatory rules evolve.

For example, using AI or machine learning to gather and analyze user data will be commonplace. Automated data collection systems need user consent and must respect user rights. But, designing efficient and GDPR-compliant AI tools is a complex task.

Cross-border data transfers could also be affected by GDPR changes. International transfers already need Binding Corporate Rules (BCRs) or Standard Contractual Clauses (SCCs). The rules on moving data out of the European Union could become tighter. Organizations need to know jurisdictions with an adequate data security rating. And they will need to track countries that require extra safeguards.

New technologies will also make it easier to manage compliance. Automated PIMS and ISMS systems streamline the data protection process. This will help organizations that rely on large numbers of third-party data processors.

Security tools will also evolve to support remote work and globally distributed workforces. Centralized security solutions should give DPOs and security teams control over access management, firewalls, and threat detection tools.

Whatever the future holds, organizations must know how to prepare for a GDPR audit. Follow the compliance audit checklist above to assess your data protection posture. And make the changes needed to ensure watertight compliance.

Disclaimer: This article is for informational purposes only and not legal advice. Use it at your own risk and consider consulting a licensed professional for legal matters. Content may not be up-to-date or applicable to your jurisdiction and is subject to change without notice.