Auditing for Digital Ethics and Privacy
In today's generation, digital ethics and privacy issues have become very sensitive, especially for organizations in the current world. As the world has witnessed the introduction of complex legal systems, including the General Data Protection Regulation (GDPR) and the Standard for Privacy of Information Processing (SPDPI), organizations are compelled to respect data privacy laws while using customer and employee information and knowledge. According to Charles (2014), an internal audit helps assess these practices and enable organizations to meet legal and ethical standards. This paper looks at the application of internal audit functions for digital ethics and the need for an increased audit of audit areas in contemporary organizations.
The Importance of Digital Ethics and Privacy
Digital ethics concerns organizations' correct approach to managing, using, and disseminating digital information. Security safeguards entities' information and assets from illicit access and utilization. Privacy is the confidentiality of a person's information. Many companies use data to improve clients' experience, so their actions must be ethical and legal. As Com points out, Mökander (2023) highlights that internal auditors are best suited for monitoring such practices to ensure that organizations respect digital ethics and privacy laws.
In the current world, the data handling process in organizations determines the reputation and confidence customers place in an organization. Instances of data privacy violation, unethical use of data risk, attractive financial fines and legal liabilities, and loss of consumer trust (Munoko & Vasarhelyi, 2020). In addition, due to changes in data privacy worldwide, organizations have no option but to keep updating themselves with the current changes. Digital ethics and privacy are no longer optional but core parts of the internal audit remit.
Auditing Data Privacy Compliance
Another critical function assigned to internal audit in digital ethics is to oversee conformity to data protection laws. Many regulations, including GDPR, CCPA, and others, mandate particular actions from organizations to secure personal information and guarantee the rights of data subjects to obtain, amend, and erase information about them (Barati et al., 2021). The auditors have to decide whether these laws are being complied with, review the data protection measures, and ensure that the organization and the data processing process are separate and conform with the laws of the given country.
According to Charles (2014), internal auditors must start the evaluation process by familiarizing themselves with the organization's data privacy policies and controls. This entails ensuring that there is policy guidance in obtaining, using, and preserving the personal data of the people concerned, along with informing the data subjects regarding their rights. They also need to determine if controls over critical data are adequate regarding data protection, including encryption access control and incident response plans. There are also legal requirements that an organization must have a standard process that should be followed when communicating the breach to affected individuals and other regulatory bodies within the set standard period.
Ethical Use of Customer and Employee
Besides observing compliance, internal auditors must guarantee the ethical use of data. This is particularly crucial as firms use artificial intelligence (AI) and machine learning (ML) to make decisions based on given customer and employee data (Mökander, 2023). These technologies have many benefits, but bias, discrimination, and lack of transparency are some of the associated ethical problems.
Charles (2014) also supports auditing the organization's use of AI and data analytics for ethical and responsible purposes. Auditors need to determine whether or not AI algorithms are created in such a way that they do not support bias and discrimination. For instance, if the AI system is used in the hiring process, the auditors should assess whether the algorithm used was trained on a diverse data set that does not adversely impact any group. Also, the auditors should examine how organizations leverage data to offer tailored customer interactions to understand if the processes are invasive and a violation of individual rights regarding data privacy or if the individuals' information is exploited.
Ensuring Transparency and Accountability
Transparency and accountability for one's actions are the basic tenets of ethical social media use. Organizations must also communicate fully with customers and employees about how consumer data is used and the rationale for making consumer-related choices. Internal auditors are critical figures who can be relied on to uphold these principles (Quach et al., 2022).
According to Munoko & Vasarhelyi (2020), auditors need to evaluate how the organization communicates on the use and privacy of data. This involves assessing the privacy policies, consent forms, and terms and conditions of use to inform users about how data is collected, processed, and utilized. Auditors should also determine if an organization affords users the necessary agency to decide how their data will be used.
In addition, for digital ethics and data privacy, auditors must be sure that someone in the organization is answerable for those issues. This entails assessing whether the organization has a data protection officer (DPO) or someone who has equivalent duties concerning data protection (Quach et al., 2022). There is also a provision where auditors should consider whether the organization conducts privacy impact assessments (PIAs) on a routine basis to determine perceived risks in data processing activities.
Challenges in Auditing Digital Ethics and Privacy
Conducting assessments of digital ethics and privacy poses several challenges to internal auditors. One of the most significant issues is the ability to address the increasing rate of regulation changes. Any firm needs to ensure its compliance with the various laws, especially the new ones and the new changes in the existing ones about data privacy. Quach et al. (2022) call for auditors to familiarize themselves with emerging or altered privacy regulations and the regulations their organizations are transitioning to.
Another problem is determining the possible ethical consequences of the created technologies. With the growth of AI, big data, and cloud computing in organizations, auditors need skills and approaches to analyzing such innovations in terms of their compliance and ethics (Mökander, 2023). This involves continuous training with technologists to grasp such technologies' existing and future dangers and opportunities.
Conclusion
Digital ethics and privacy audits have emerged as essential functions in the technological business world. As this article demonstrates, internal auditors are responsible for ensuring that organizations respect the Legal requirements of data privacy acts, individuals' rights, and ethical use of digital data. Through supporting the compliance audit on the protection of data, evaluating the admissibility of the utilization of data regarding the customers and the employees, and promoting transparency and accountability, internal auditors protect organizations from legal and reputational risks. However, auditors face the complexity of continuous changes in regulations and new technologies to properly audit digital ethics and privacy in the current business environment.
References
Barati, M., Aujla, G. S., Llanos, J. T., Duodu, K. A., Rana, O. F., Carr, M., & Ranjan, R. (2021). Privacy-aware cloud auditing for GDPR compliance verification in online healthcare. IEEE Transactions on Industrial Informatics, 18(7), 4808-4819. https://ieeexplore.ieee.org/abstract/document/9497765
Charles, S. (2014). Charles Financial Strategies LLC. Charles Financial Strategies LLC. https://www.charlesfs.com/fractional-audit-services
Mökander, J., & Axente, M. (2023). Ethics-based auditing of automated decision-making systems: intervention points and policy implications. AI & SOCIETY, 38(1), 153-171. https://link.springer.com/article/10.1007/s00146-021-01286-x
Munoko, I., Brown-Liburd, H. L., & Vasarhelyi, M. (2020). The ethical implications of using artificial intelligence in auditing. Journal of Business Ethics, 167(2), 209-234. https://link.springer.com/article/10.1007/s10551-019-04407-1
Quach, S., Thaichon, P., Martin, K. D., Weaven, S., & Palmatier, R. W. (2022). Digital technologies: tensions in privacy and data. Journal of the Academy of Marketing Science, 50(6), 1299-1323. https://link.springer.com/article/10.1007/s11747-022-00845-y