Decoding the SEC Security Checklist: Safeguarding Your Business in a Digital World

March 5, 2024by varun Bubna0

Protecting your business from cyber threats is of utmost importance in today’s digitally intertwined environment. The security of company data, especially unpublished financial data, is a great concern for IT teams, CFOs, and compliance teams. The Securities and Exchange Commission (SEC) has compiled a thorough security checklist to assist businesses in strengthening their defences and safeguarding sensitive data. Join us in this blog as we demystify the SEC Security Checklist, providing valuable perspectives on each critical aspect to help you fortify your cybersecurity measures effectively.  

Understanding the SEC Security Checklist

The SEC Security Checklist serves as a roadmap for businesses to assess and enhance their cybersecurity posture. It encompasses various domains, including network security, data protection, access controls, incident response, and more. By adhering to these guidelines, organizations can mitigate risks associated with cyber threats and ensure compliance with regulatory requirements. 

Network Security: Building a Robust Firewall

A robust firewall forms the first line of defence against unauthorized access and malicious activities. The SEC checklist emphasizes the importance of implementing and maintaining firewall systems to monitor and control incoming and outgoing network traffic. By configuring firewalls to restrict unnecessary ports and protocols, organizations can reduce the attack surface and thwart potential intrusions. 

Data Protection

Protecting sensitive data from unauthorized disclosure or tampering is imperative for regulatory compliance and maintaining customer trust. Encryption plays a pivotal role in safeguarding data both at rest and in transit. The SEC checklist underscores the need for encrypting sensitive information such as financial records, customer data, and intellectual property. Additionally, implementing secure storage mechanisms, such as access controls and data segregation, ensures that only authorized personnel can access critical data assets. 

Restricting Privileged Access

Controlling access to sensitive systems and resources is vital for preventing unauthorized activities and insider threats. The SEC checklist advocates for implementing strong access controls, including multi-factor authentication (MFA), role-based access control (RBAC), and least privilege principles. By limiting privileged access to only authorized individuals and regularly reviewing user permissions, organizations can mitigate the risk of data breaches and unauthorized transactions. 

Preparing for Cyber Emergencies

No organization is immune to cyber incidents, making proactive incident response strategies essential for minimizing damage and restoring normal operations swiftly. The SEC checklist outlines guidelines for developing an effective incident response plan, including incident detection, containment, eradication, and recovery procedures. Conducting regular drills and simulations enables organizations to evaluate their incident response readiness and refine their strategies accordingly. 

Assessing Third-Party Risks

Many businesses rely on third-party vendors for various services, exposing them to additional cybersecurity risks. The SEC checklist highlights the importance of conducting thorough due diligence when engaging third-party vendors and assessing their security posture. Implementing contractual agreements that outline security requirements and conducting regular audits help ensure that vendors adhere to established security standards, thereby mitigating potential vulnerabilities introduced through external dependencies. 

Vigilance in a Dynamic Landscape

Cyber threats evolve rapidly, necessitating continuous monitoring and threat intelligence gathering to stay ahead of potential risks. The SEC checklist emphasizes the importance of implementing robust monitoring solutions to detect and respond to security incidents promptly. Leveraging intrusion detection systems (IDS), security information and event management (SIEM) platforms and threat intelligence feeds enable organizations to proactively identify and mitigate emerging threats. 

Understanding the Relevance of Digital Data

As reporting requirements transition to digital submissions and significant transactions move online, the Internet has become critically important. Gone are the days of storing vast amounts of heavy paper files; everything is now stored online, and every business leverages digital data in some way.  

As audit and risk professionals aim to establish a robust cybersecurity and IT risk management program, they should consider practicing the following cybersecurity program which drafting their disclosures in their annual SEC submissions. 

Effective Cybersecurity Governance Practices

  • Align cybersecurity practices with business strategy and risk appetite: Ensure that your cybersecurity measures are in line with your business goals and risk tolerance levels. 
  • Secure management support and view cybersecurity as an investment: Ensure that your leadership understands the importance of cybersecurity and is willing to invest in it as a strategic asset. 
  • Stay informed about emerging risks and regulatory changes: Keep abreast of the latest developments in cybersecurity threats and regulations to adapt your defences accordingly. 
  • Keep cybersecurity governance processes agile and updated: Regularly review and update your cybersecurity governance framework to address evolving threats and challenges. 
  • Clearly define roles and responsibilities for cybersecurity: Ensure that everyone in your organization understands their role in maintaining cybersecurity. 
  • Regularly assess risks and integrate results into the IT assessment process: Conduct regular risk assessments and use the findings to improve your IT security posture. 
  • Document emerging trends, technologies, threats, and regulatory changes: Maintain a repository of information on cybersecurity trends and regulations to stay ahead of potential threats. 
  • Prioritize and effectively implement risk mitigation strategies: Focus on addressing the most critical risks first and ensure that mitigation strategies are effectively implemented. 
  • Adapt governance processes to evolving threat landscapes: Be flexible in your approach to cybersecurity governance to respond to changing threat environments. 
  • Develop and enforce comprehensive cybersecurity policies and procedures: Establish clear policies and procedures to guide your organization’s cybersecurity efforts. 
  • Educate all employees about cybersecurity best practices: Ensure that everyone in your organization is aware of and follows cybersecurity best practices. 
  • Establish and regularly test incident response plans: Have a well-defined incident response plan in place and regularly test it to ensure its effectiveness. 
  • Implement continuous monitoring of systems, networks, and applications: Use automated tools to continuously monitor your IT environment for potential security breaches. 
  • Conduct regular penetration testing and vulnerability assessments: Test your systems and networks regularly for vulnerabilities and weaknesses. 
  • Establish KPIs and security metrics to measure effectiveness: Define key performance indicators (KPIs) and security metrics to track the effectiveness of your cybersecurity efforts. 
  • Report KPIs to demonstrate progress: Regularly report on your KPIs to show the progress of your cybersecurity program. 
  • Conduct regular internal and external audits of cybersecurity governance: Regularly audit your cybersecurity governance framework to ensure compliance and effectiveness. 

Security Audit Completion

There are several security audits for software/service providers out of which the SSAE 18 is a widely accepted audit for financial reporting. The SSAE 18 security audit is based on standards defined by the American Institute of Certified Public Accountants (AICPA) and focuses on internal control over financial reporting. A service provider with a completed SSAE 18 audit is a plus. 

SSL certification and Data Encryption Level

An SSL certificate is a type of digital certificate that provides authentication for a website and enables an encrypted connection.  Having an SSL certification in place for the SaaS solution helps to add another layer of security to your data. Every company is responsible for the security of its data.  As financial regulatory agencies around the world continue to make structured financial data reporting (XBRL/iXBRL) the standard, it will be very important for organizations to understand how their unpublished financial information is converted to iXBRL, and what security risks might be associated with the process. 

With a presence in over 32 countries, 1.5+ million filers using our solution/services, and 5+ million files processed, IRIS is a global leader in XBRL/iXBRL-based disclosure management. Our 14 years of pioneering experience in the structured data space has culminated in our flagship product, IRIS CARBON®, a cloud-based, collaborative disclosure management platform for issuers. 

Augmented by an expert support team of 300+ professionals, our customers enjoy high-quality services and unlimited expert support. IRIS CARBON® is SSAE 18 audited, which assures confidentiality and data integrity while using our cloud-based platform and services. 


The SEC Security Checklist serves as a comprehensive framework for businesses to bolster their cybersecurity defences and safeguard against digital threats. By adhering to its guidelines and implementing robust security measures across network infrastructure, data protection practices, access controls, incident response strategies, vendor management protocols, and continuous monitoring initiatives, organizations can enhance their resilience against cyber-attacks and ensure compliance with regulatory mandates. In an era where cyber threats loom large, prioritizing cybersecurity is not just a necessity but a strategic imperative for businesses operating in the digital realm. 

Don't let SEC financial reporting challenges slow you down.

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