Risk of Noncompliance with Data Classification Policies

A.

When an IS audit of an organization's data classification policies finds that some areas of the policies may not be up-to-date with new data privacy regulations, management should first conduct a privacy impact assessment to identify gaps.

A privacy impact assessment (PIA) is a process for identifying and assessing the potential privacy risks that may arise from the collection, use, disclosure, and retention of personal information. It is a key tool for compliance with privacy laws and regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

Conducting a PIA will help management identify the personal data that the organization collects, how it is used, who has access to it, and how it is protected. It will also identify any gaps in the organization's data classification policies and procedures that may result in noncompliance with new data privacy regulations.

Once the gaps have been identified through the PIA, management can take appropriate steps to address them. For example, they may need to revise their data classification policies and procedures, reclassify information based on revised information classification labels, or mandate training on the new privacy regulations. A data discovery exercise may also be necessary to identify all personal data, particularly in cases where personal data may be stored in unexpected locations.

In conclusion, while all of the suggested answers may be necessary to address the risk of noncompliance, conducting a privacy impact assessment to identify gaps should be the first step taken by management to ensure compliance with new data privacy regulations.