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- What Is a Cybersecurity Risk Assessment or Penetration Testing?
- What is a WISP (Written Information Security Plan) & How It Relates to Risk Assessments?
- How Cyber Insurance Providers View Risk Assessments / WISPs / Audits?
- Is Cybersecurity Risk Assessment Safe? Can it distrupt my business in any way?
- How Often Should You Conduct Cybersecurity Risk Assessments?
- FAQ for Cybersecurity Risk Assessment
“Over 97% of American businesses in 2023, operating in a digitally-driven landscape, heavily rely on the Internet for essential functions such as productivity, performance optimization, streamlined communication, bolstered sales, and various other facets of their daily operations. This heightened dependence on digital infrastructure, however, comes with a notable caveat: more than 87% of small businesses are entrusted with customer data that could be potentially compromised in the event of a cyberattack.”
Alarming statistics from Verizon’s 2021 Data Breach Investigations Report reveal that one in every five data breach victims was from a professional services organization. Furthermore, only 47% of such organizations can detect breaches within days.
The financial consequences of data breaches have also soared. According to IBM’s Cost of a Data Breach Report 2021, data breach costs have risen from USD 3.86 million to USD 4.24 million. These figures underscore the urgent need for professional services organizations to prioritize cybersecurity.
When protecting your business from cybersecurity threats, the first thing you can do is perform a cybersecurity risk assessment or penetration test. A risk assessment analyzes potential risks that can threaten your data and systems, and the potential losses resulting from a breach. Every business should have a comprehensive cybersecurity risk assessment plan to ensure they are prepared for any potential threats. For Accountants (CPA) and Law Firms, the Federal Trade Commission (FTC) has implemented several safeguards rules to help businesses protect their networks, systems, and data from cyberattacks.
In this article, we’ll look at what goes into a cybersecurity risk assessment. Government agencies like the FTC’s Safeguards Rule (IRS) or Cyber insurance providers require companies to perform a cybersecurity risk assessment or penetration test (“pen test”) to identify security risks and put security measures to protect your data or consumer information.
What Is a Cybersecurity Risk Assessment or Penetration Testing?
A cybersecurity risk assessment is an analytical process to identify security risks and vulnerabilities in an IT system or network, which is the first step of the NIST Cybersecurity Framework. It involves analyzing network setup for weaknesses, assessing user access rights and privileges, evaluating the effectiveness of security controls, identifying threats from external sources such as viruses or malware attacks, and establishing response plans in case of an attack or breach. This process aims to minimize the likelihood of a successful attack on your system by minimizing vulnerabilities that hackers could exploit.
It’s analogous to a bank hiring an individual to simulate a break-in, attempting to gain access to their premises and vault. If the simulated “burglar” successfully infiltrates the bank or vault, it provides valuable insights into areas where security measures need to be strengthened.
According to FTC Safeguard Rules:
“You can’t formulate an effective information security program until you know what information you have and where it’s stored. After completing that inventory, conduct an assessment to determine foreseeable risks and threats – internal and external – to the security, confidentiality, and integrity of customer information. Among other things, your risk assessment must be written and must include criteria for evaluating those risks and threats. Think through how customer information could be disclosed without authorization, misused, altered, or destroyed. The risks to information constantly morph and mutate, so the Safeguards Rule requires you to conduct periodic reassessments in light of changes to your operations or the emergence of new threats.”
What is a WISP (Written Information Security Plan) & How It Relates to Risk Assessments?
A WISP (Written Information Security Plan) is a formal document that describes how your business protects sensitive information. It typically includes your policies for data handling, access control, incident response, training, and ongoing monitoring.
A cybersecurity risk assessment is the process that identifies threats and vulnerabilities in your environment. The results of that assessment provide the foundation for creating or updating your WISP. In other words, the WISP is the written plan, while the risk assessment supplies the evidence and priorities that shape the plan. Together, they show regulators, clients, and insurers that your firm is proactive and compliant in safeguarding data.
How Cyber Insurance Providers View Risk Assessments / WISPs / Audits?
Cyber insurance providers expect businesses to conduct a formal risk assessment to show they have appropriate security measures in place.
These assessments help identify gaps in controls, outline a plan to remediate weaknesses, and demonstrate that the organization is actively managing its risk. If a company does not implement required safeguards, insurers may raise premiums, exclude coverage, or transfer the financial risk back to the client.
A documented risk assessment and WISP are often prerequisites for obtaining or renewing coverage.
Learn more about Cyber Insurance Application Filing Guide for your Business – eSudo.com
Is Cybersecurity Risk Assessment Safe? Can it distrupt my business in any way?
A cybersecurity risk assessment is generally a safe process for your business, and it’s designed to identify vulnerabilities and enhance your security posture. However, it’s essential to be aware of potential impacts during the assessment.
In most cases, the assessment itself should not cause major disruptions to your business operations. While the evaluation is underway, there might be instances where your computers or systems could experience temporary slowness or unavailability. This is because the assessment involves actively probing and testing various aspects of your IT infrastructure to identify potential weaknesses.
It’s crucial to communicate with your IT team or the cybersecurity assessment service provider to schedule the assessment at a time that minimally impacts critical business operations. This strategic planning ensures that any potential slowdowns or temporary unavailability align with periods of lower business activity, reducing the impact on your day-to-day operations.
Furthermore, the benefits of a cybersecurity risk assessment far outweigh the temporary inconveniences it may cause. Identifying and addressing vulnerabilities in your systems help prevent potential cyber threats that could have more severe and lasting consequences for your business. By proactively addressing these issues, you enhance the overall security and resilience of your IT infrastructure, safeguarding your business from potential cyberattacks and their disruptive effects.
What Happens During Cybersecurity Risk Assessment?
Here is a brief overview of the process:
- Interview Key Decision Makers
- Investigate your current security position
- Determine how susceptible the business is to attack
- Examine how likely staff or employees are to enabling or further the attack
- Identify physical and procedural weaknesses in the business that enable attacks
- Identify the most likely at-risk business assets
- Inspect Files & Documents for Sensitive Information
- Inspect your Cloud Applications
- Search for Passwords
- Dark Web Search
- Review Security Policies & procedures
It is important to note that this an outline and your business may or may not need all the items listed.
What Happens After Cybersecurity Assessment?
After completing the cybersecurity risk assessment, the security consultant will share the findings with your IT team or business owner. This information can be used to implement a security upgrade, including patching the computer systems, upgrading the existing security tools (e.g., firewall, antivirus, anti-malware, email security, backup, encryption), providing employee security awareness training, and creating a written information security plan (WISP).
Ultimately, you want your cybersecurity risk assessment plan to comply with the FTC Safeguards Rules to protect consumers information or if you are purchasing or renewing a cyber insurance policy, you must comply with insurance provider security measures. It is recommended you work with an experienced cybersecurity professional firm that has the Ins and Outs of the industry and the resources to implement these security protocols.
How Much Do Cybersecurity Risk Assessments or Penetration Testing Cost?
When contemplating the cost of cybersecurity risk assessment or penetration testing, businesses should assess the potential losses incurred by not implementing such security measures or not being able to conduct your business because you do not comply of the security requirements of their customers or supplier. These losses may encompass customer trust, financial assets, or compliance requirements like FTC Safegaurds Rules, HIPAA, PCI DSS, or Cyber insurance application, which are crucial for maintaining a secure operational environment.
While seeking to minimize expenses is understandable, opting for a low-cost penetration testing service raises questions about meeting excellence standards. Cutting corners might result in critical errors or future expenses surpassing the initial investment. Consumers need to balance cost savings with the assurance that the chosen service aligns with their security needs.
It’s crucial to note that a high price tag doesn’t automatically translate to the best service. Businesses should delve into the specifics of the service, considering factors such as scope of work, warranties, and the provider’s track record. Asking questions about the company’s experience in performing these services is essential. Time in the industry can impact efficiency, potentially affecting the cost-effectiveness of the service.
In essence, business should focus on the value proposition of penetration testing services, considering both the immediate and long-term benefits in safeguarding their systems against cyber threats.
On average, a one-time cyber security assessment or “pen test” cost ranges from $2,750 to $30,000.
Factors that influence scope of work and price include:
- Size: how many users and devices; smaller organization fewer users is going cost less compare to medium-sized or larger businesses.
- Complexity: the type of business (law firms, accounting, manufacturing or wealth mangement), number of applications, number of workstations and servers that has be to tested will add more to the test cost.
- Sites: the number of sites or locations that needs to be tested, and if the test can conductly remotely or onsite is needed.
- Report: one of the most important factor is whether or not you receive a comprehensive report detailing security gaps and recommendations for protection or a remediation plan.
How Often Should You Conduct Cybersecurity Risk Assessments?
In the dynamic landscape of network security, a proactive approach is key to safeguarding your business. It’s not a one-time event but an ongoing commitment to keep your systems resilient against evolving threats. With the rise of a mobile workforce and the omnipresence of phishing attempts, educating your employees and continuous monitoring are vital to prevent data breaches.
At eSudo, we advocate for an annual cybersecurity risk assessment. Why? Because your business evolves – new applications, employees, systems, and vendors may come into play. Regular assessments help identify and address any emerging security gaps, ensuring your business stays one step ahead of potential threats.
What’s in it for you? Peace of mind, enhanced reputation, and a robust defense against cyber threats. Our comprehensive services include managed cybersecurity, proactive IT solutions, and employee security awareness training.
Ready to fortify your business against cyber risks? Book a free strategy call with us now. Let’s empower your business to thrive securely in today’s digital landscape!
You may also like to take a look at some of these great resources:
- Cybersecurity Risk Assessment – eSudo.com
- 15 Ways to Protect Your Business from Cyber Attacks – Download This Free Security Blue Print.
- 5 Common FTC Safeguards Rules Questions and IRS Data Security Responsibilities (WISP)
- Why the IRS Requires WISP (written information security plan) for your business and accounting firm! – eSudo.com
- Download Free Cybersecurity Policy (WISP) Template
FAQ for Cybersecurity Risk Assessment, IT Audit for Law Firms, Accountants, SMBs
A cybersecurity risk assessment looks at your entire environment—people, processes, and technology—to identify threats, likelihood of attack, and potential business impact.
A vulnerability audit focuses on technical weaknesses such as unpatched systems, open ports, or misconfigurations.
An IT audit evaluates your technology controls, policies, and operations against compliance standards and best practices.
Together, these assessments give business leaders a complete view of both technical and organizational risks.
A Written Information Security Plan (WISP) is a documented framework that outlines how your firm protects sensitive client and business data.
It is often required by regulations such as the FTC Safeguards Rule and state privacy laws.
Law firms and accounting firms are frequently asked for a WISP by regulators, clients, or cyber insurance providers.
Having a current WISP demonstrates due diligence and reduces liability in the event of a breach.
Most cyber insurance carriers now require evidence of risk assessments and remediation plans before approving or renewing coverage.
Completing a formal risk assessment can speed up underwriting, lower premiums, and reduce exclusions.
It also helps you identify gaps (like missing MFA or backup controls) that insurers look for when deciding claim payouts.
At a minimum, once per year.
You should also reassess whenever there are major changes—such as moving to the cloud, hiring remote staff, adopting new applications, or after an incident. Some industries and insurers require documented assessments every 12 months to stay compliant.
A typical engagement includes:
An executive summary for leadership and insurance carriers
A risk matrix showing likelihood and business impact of identified threats
A list of vulnerabilities with prioritized remediation steps
Recommendations for improving policies, user training, and controls
(Optional) A new or updated WISP aligned with FTC and industry requirements
While internal IT teams can perform basic reviews, regulators and insurers prefer independent assessments from qualified third parties.
External providers like eSudo bring objective expertise, industry benchmarks, and documented deliverables that stand up to audits, legal scrutiny, or insurance reviews.
Costs vary based on size, complexity, and scope.
For a 10–30 person firm, a risk assessment with vulnerability scan and WISP typically costs $3,000–$7,500.
Cyber insurers often view this as an investment that can save tens of thousands of dollars in premiums or uncovered claims