Most of the companies today prefer to keep their transaction details and data in electronic format due to its numerous benefits, including economic benefits, convenience, and increased productivity. This dependence on virtual methods, besides providing numerous benefits, has also created some potential vulnerability for a security breach. If this happens, it can give a major jolt to businesses and their stakeholders.
In order to avoid such situations, companies deploy the services of organizations like Elijaht M&A cyber security due diligence. They help companies in multiple ways, like understanding the scope of the damage if a breach happens, and also if it has already happened. They then find the vulnerabilities in the system or application and plug it in time before hackers can exploit it – this is all taken care of by forensic service providers.
Here are some general guidelines for structuring cyber-security due diligence in M&A transactions
Initial Assessment
In cases of M&A, it is important to understand which digital assets of the acquired company are important to the acquirers. It is also essential to understand the process adopted by the target company to process and store their data.
Assessing the Internal Rules and Regulations
Every company follows certain rules and regulations on protecting their digital assets. The acquirers have to make sure that the rules and regulations followed by the acquired company meet the industry standards and if they have actually and effectively implemented them. They also check for any non-compliances and try to figure out the cyber-attack vulnerabilities in the target company and how quick and good they are at responding if an attack happens.
Assessing the Compliance with External Rules and Regulations
There are certain external regulations that a company needs to comply with. The acquirers should assess if the target company complied with all such regulations and also check if there is any pending issue.
Look for Past Security Breaches
The acquirers should definitely find out if there have been any security breaches in the past. In case there has, then a thorough assessment of its scope and impact needs to be made. It is also important to know how the company dealt with it and if it took enough measures to plug that leak.
In this digital world, cyber-security is one of the most crucial aspects of securing a business, as it helps in protecting data from getting stolen, manipulated, deleted or disclosed to an unauthorized person.