How to Conduct an ISO 27001 Risk Assessment

Published on : 25 Oct 2023


ISO 27001 Risk Assessment

Welcome to our comprehensive guide on ‘Conducting an ISO 27001 Risk Assessment’. This blog is designed to equip you with effective strategies for a successful risk assessment, incorporating the principles of ISO 31000 risk management.

Risk assessment is a vital component of a robust information security framework and is in alignment with ISO 31000. It’s a systematic, iterative, and collaborative process that leverages insights from stakeholders and reliable information, supplemented as necessary.

This guide will detail the process to align your organization’s information security with ISO 27001 and ISO 31000 standards. Let’s enhance your risk assessment!

Before we proceed, let’s familiarize ourselves with some technical terms that will be used throughout this blog:

  • Vulnerability: A system weakness that can be exploited, like outdated software.
  • Threat: Anything that can potentially harm your system, such as a hacker.
  • Likelihood: The probability of a threat exploiting a vulnerability.
  • Impact: The potential damage resulting from a threat exploiting a vulnerability, like data loss.
  • Risk: The potential loss or damage, calculated as the product of likelihood and impact. For instance, a high risk could imply a high probability of significant data loss due to a hacker exploiting a software vulnerability.

With these definitions in mind, let’s embark on our journey to conduct an effective ISO 27001 Risk Assessment!

5 Crucial Steps to Conduct an Effective ISO 27001 Risk Assessment

 

1.Establish an ISO 27001 Risk Assessment Methodology:

Start your effective ISO 27001 risk assessment by defining a methodology that aligns with your organization’s needs. Choose between a qualitative or quantitative approach:

  • Qualitative Method: Dive into diverse scenarios and address hypothetical inquiries to identify risks.
  • Quantitative Method: Use data and figures to establish risk levels.

Customize an ISO 27001 risk assessment to your organization, aligning with security goals and stakeholder expectations. Engage management in defining criteria and risk levels, ensuring method adherence.

When you manage risks, consider popular frameworks like ISO 27005:2018, OCTAVE, NIST SP 800-30, RISK IT, Value-at-Risk (VaR), and Earnings-at-Risk (EaR). Choose the one that best aligns with your organization’s needs.

2.Develop a Comprehensive Asset Inventory and Criticality-Based Categorization:

After establishing your risk assessment methodology, develop a comprehensive asset inventory. You can’t safeguard what you’re unaware of, so protection begins with awareness. Your inventory should include:

  • Networks
  • Devices (including IoT devices, network devices, and mobile devices)
  • Storage Locations
  • Data
  • Applications/Software
  • Users
  • Hardware
  • Information databases
  • Removable devices
  • Intellectual property

For an ISO 27001 risk assessment, it’s key to consult all asset owners and compile a full asset inventory, including new ones in cloud environments.

Categorizing assets by their criticality is crucial, as it directs resources towards protection, recovery, and risk management. Here are some examples based on their criticality:

  1. High criticality assets, such as primary data centers, key network infrastructure (including routers, switches, and firewalls), and critical applications, could cause significant harm to an organization’s operations or reputation if they’re compromised.
  2. Medium criticality assets, such as secondary data centers (used for backing up primary data centers) and non-critical applications (supporting day-to-day operations), are important to an organization’s operations, but their compromise would not be as devastating.
  3. Low criticality assets, such as peripheral devices (printers, scanners, etc.) and test environments (used for testing updates or new applications), would cause minimal disruption to an organization’s operations if compromised. 

A thorough risk assessment is vital to determine each asset’s criticality, as these classifications can vary based on the organization and its operations.

3.Risk Identification and Vulnerability Assessment:

To meet our goals, we need to stay alert in identifying risks, whether they advance us or hinder us. This requires using up-to-date information and various methods to detect uncertainties affecting our objectives.

Consider these factors:

  • Think about both tangible and intangible risks.
  • Recognize their causes and triggering events.
  • Be alert to threats and opportunities.
  • Understand vulnerabilities and capabilities.
  • Monitor changes in your external and internal environment.
  • Keep an eye out for emerging risks.
  • Assess the value of your assets and resources.
  • Consider potential consequences on your objectives.
  • Acknowledge the limitations of your knowledge and data reliability.
  • Factor in the element of time.
  • Be mindful of any biases or assumptions.

Don’t miss technical issues like software glitches, tech vulnerabilities, and downtime when identifying risks. 

On the admin side, consider risks related to employee turnover, documentation gaps, and security awareness. Understand that risks can come from various sources with tangible or intangible outcomes.

4.Analyze Risk:

Risk analysis is a thorough process designed to understand the characteristics of risk. It delves into uncertainties, sources of risk, outcomes, probabilities, scenarios, controls, and their effectiveness. 

The approach can be qualitative, quantitative, or a combination of both, depending on the purpose, reliability and availability of information, and resources.

Key factors include:

  • Event likelihood and outcomes
  • Outcome type and scale
  • Complexity
  • Connectivity
  • Time factors
  • Volatility
  • Control effectiveness
  • Sensitivity levels
  • Confidence levels

Analysis can be swayed by biases and perceptions, which should be identified and shared with decision-makers. Quantifying uncertain events is tough, but various techniques can help.

5.Risk Evaluation and Impact Assessment:

Take a comprehensive approach to risk assessment by assessing financial and customer relationship impacts of risks and prioritizing them using a risk matrix. 

Keep in mind the CIA Triad’s influence on data security and assess potential costs like financial losses and reputation damage. 

Assign likelihood and impact scores to each risk for efficient management and compare results with established criteria to identify areas requiring action, such as:

  • Taking No Further Action: If the risk is manageable or has minimal impact, no additional steps are needed.
  • Exploring Risk Treatment Options: When risks surpass acceptable levels, explore various mitigation strategies.
  • In-Depth Analysis: For complex risks or uncertain analysis results, consider a deeper examination.
  • Continuing Current Controls: If existing controls effectively reduce risk, maintain them.
  • Reassessing Objectives: If the risk seriously endangers organizational objectives, contemplate redefining them.

This approach ensures a thorough risk evaluation and management. It aligns with ISO 31000:2018’s emphasis on transparency, shared responsibility, and continuous improvement through documentation and sharing of risk evaluation outcomes.

 

Download our “ISO 27001 Checklist

Risk Treatment:

Risk treatment involves a systematic process to address risks. It starts with understanding the risk, its potential impact, and the effectiveness of current controls.

A. Implement Risk Treatment Plan and Statement of Applicability:

The Risk Treatment Plan (RTP) in ISO 27001 certifies threat responses and is subject to audit. Each risk necessitates an owner’s approval for the plan and acceptance of residual risk. ISO 27001 offers various risk management options.

  • Risk Avoidance: This involves taking preventive actions such as ending high-risk vendor partnerships to avoid the risk.
  • Risk Treatment: Apply security measures like firewalls or endpoint detection solutions to reduce the likelihood of the risk.
  • Risk Transfer: Share the risk with a third party through methods like outsourcing or cybersecurity insurance.
  • Risk Acceptance: If meeting established criteria or reducing costs is too challenging, the risk may be accepted.

Alongside the RTP, a Statement of Applicability (SoA) is crucial. The SoA outlines your organization’s security profile, controls, and their deployment based on the ISO 27001 risk assessment. It guides your risk management approach and should align with your risk strategy.

B. Compile Risk Assessment Reports

For audit and certification, you need to prepare two crucial documents: The RTP and SoA.

The RTP should detail each identified risk, propose actions to mitigate them, and assign responsible parties.

The SoA, per ISO 27001 Standard Clause 6.1.3, 

  • It should list your organization’s chosen controls.
  • It should justify the selection of these controls.
  • It should confirm these controls’ implementation.
  • It should explain any omitted controls.

In the SoA, detail each control’s selection, status, and exclusion reasons. These guide the auditor’s ISO 27001 compliance review.

C. Review, Monitor, and Audit Risks for ISMS Improvement

Monitoring and reviewing the risk management process across all stages enhances its effectiveness and integrates results into the organization’s performance management. Document handling prioritizes use, information sensitivity, and context. Reporting supports management and stakeholders, considering cost, frequency, timeliness, and relevance. 

Regular risk assessments under ISO 27001 lead to an annual audit considering organizational changes and threats, including mitigation strategies and scheduling for new risk treatments or controls.

Conclusion:

In conclusion, the importance of conducting a robust ISO 27001 risk assessment for your organization’s information security cannot be overstated. It is our hope that this guide has equipped you with not only valuable insights but also actionable strategies. Keep in mind, a successful risk assessment does more than just protect your information – it fortifies your brand’s reputation and nurtures customer relationships. So, here’s to leveraging risk assessment as a strategic tool for your organization’s success!

Narendra Sahoo
Narendra Sahoo

Narendra Sahoo (PCI QPA, PCI QSA, PCI SSF ASSESSOR, CISSP, CISA, CRISC, 27001 LA) is the Founder and Director of VISTA InfoSec, a global Information Security Consulting firm, based in the US, Singapore & India. Mr. Sahoo holds more than 25 years of experience in the IT Industry, with expertise in Information Risk Consulting, Assessment, & Compliance services. VISTA InfoSec specializes in Information Security audit, consulting and certification services which include GDPR, HIPAA, CCPA, NESA, MAS-TRM, PCI DSS Compliance & Audit, PCI PIN, SOC2 Compliance & Audit, PDPA, PDPB to name a few. The company has for years (since 2004) worked with organizations across the globe to address the Regulatory and Information Security challenges in their industry. VISTA InfoSec has been instrumental in helping top multinational companies achieve compliance and secure their IT infrastructure.