(This is in continuation of the previous article)

In the previous article, we discussed the distinction between the objectives of the CISO and the DPO.

The same distinction raises a broader question regarding the independence of DPDPA audits.

If a DPDPA audit is intended not only to assess organizational controls but also to evaluate whether the interests of Data Principals are adequately protected, can management alone determine the scope of the audit?

The Traditional Audit Model

Most governance frameworks recognize the right of management to define the scope of compliance activities.

ISO 27001 follows this approach through the Statement of Applicability.

DGPSI similarly permits management to define implementation boundaries through the Deviation Justification Document.

The rationale is straightforward.

Management bears the business risk and therefore has the right to determine its risk appetite. Risks that are consciously accepted may be mitigated through operational controls, contingency planning, insurance, or other risk-treatment mechanisms.

The Challenge

The problem arises when a management decision affects not only organizational risk but also the rights of Data Principals.

A DPDPA audit is different from a conventional information security audit.

The question is not merely:

“Has the organization managed its risk?”

The question is also:

“Have the interests of Data Principals been reasonably protected?”

An excessively narrow audit scope may therefore conceal significant privacy risks while still appearing acceptable from a management perspective.

The DGPSI Approach

DGPSI addresses this challenge through a structured risk-assessment process.

The auditor is expected to identify risks based on applicable implementation specifications and present these findings to management.

Management may then choose to mitigate, transfer, absorb, or otherwise manage those risks.

Any exclusions or deviations are expected to be documented and justified.

The resulting Data Trust Score (DTS) reflects not only implemented controls but also the residual risks accepted by management.

This approach is comparable to an individual managing health risks through a combination of medication, lifestyle adjustments, emergency medical facilities, and insurance coverage. The risk is not eliminated but consciously managed.

Is Additional Oversight Necessary?

During the discussions, a concern was raised regarding situations in which management may seek to aggressively reduce audit scope by asserting:

“We will deal with the risk if and when it materializes.”

If such decisions significantly affect the interests of Data Principals, should there be an independent validation mechanism?

One suggestion was that the audit scope should be supported by a formal risk assessment and be reviewed by an independent body before the audit proceeds.

The objective would not be to overrule management.

Nor would it be to dictate implementation choices.

The objective would simply be to determine whether the scoping assumptions appear professionally reasonable.

A Possible Role for Audit Quality Control

DGPSI currently contemplates a quality-control mechanism under which completed audits may be reviewed by an FDPPI quality committee if significant concerns arise.

A similar concept could potentially be applied at the scoping stage.

Under such an approach, an auditor may voluntarily submit the risk assessment and proposed scoping document to an Audit Quality Control Committee for validation of the underlying assumptions.

The committee would not certify compliance, approve the audit, or interfere with auditor independence.

Its role would be limited to examining whether significant exclusions have been adequately justified.

Conclusion

As India develops professional standards for Independent Data Auditors under DPDPA, the industry must address an important question:

Can an audit remain truly independent if its scope is entirely determined by management?

The answer is unlikely to be straightforward.

Management must retain the right to determine business priorities and risk appetite. At the same time, DPDPA compliance requires recognition of interests that extend beyond the organization itself.

The suggestions discussed here are exploratory and intended to stimulate professional debate. FDPPI and AIDAI are in the process of developing ethical and professional standards for DPDPA audits, and practitioner feedback will play an important role in shaping these standards.

The objective is not to prescribe answers but to encourage the development of a robust and credible audit ecosystem for India’s emerging data protection framework.

Naavi