Executive Summary
A compliance audit under the DPDPA is not merely a checkbox exercise. It requires a systematic examination of data processing activities, consent mechanisms, technical safeguards, and organisational measures. This guide provides a practitioner's framework for conducting audits that identify genuine compliance gaps rather than superficial deficiencies.
Key Takeaways
- 1Map all personal data processing activities before commencing the audit
- 2Examine consent mechanisms against Section 6 requirements with particular attention to withdrawal procedures
- 3Document findings with sufficient particularity to support remediation planning
- 4Prioritise identified gaps based on enforcement risk and operational impact
- 5Establish a cadence for periodic re-audits aligned with regulatory developments
1Preliminary Considerations
Before commencing any audit, the auditor must understand the organisation's business model, data flows, and processing purposes. A technology company processing user behaviour data presents different compliance challenges than a healthcare provider managing patient records. The audit scope should reflect these operational realities rather than applying a generic template.
Practical Tips
- •Request organisational charts and data flow diagrams before the audit commences
- •Interview business unit heads to understand actual data practices, which often differ from documented procedures
2Phase One: Data Inventory Assessment
The foundation of any meaningful audit is a comprehensive data inventory. Without knowing what personal data exists within the organisation, where it resides, and how it moves, no compliance assessment can be complete.
Identify Data Sources
Catalogue all systems, applications, and repositories that collect, store, or process personal data. Include legacy systems, cloud services, and third party integrations.
Map Data Flows
Document how personal data moves within and outside the organisation, including transfers to processors, group companies, and cross border recipients.
Classify Data Categories
Distinguish between general personal data and sensitive categories such as health information, financial data, and biometric identifiers.
Document Retention Periods
Record how long each data category is retained and verify alignment with Rule 8 requirements.
Important Warnings
- •Shadow IT systems often contain significant personal data that escapes formal inventories
- •Employee personal devices may process corporate data under bring your own device policies
3Phase Two: Legal Basis Review
For each processing activity identified in Phase One, the auditor must verify that a valid legal basis exists. Under DPDPA, consent is the primary basis for most processing, with limited statutory exceptions.
Consent Mechanism Analysis
Examine how consent is obtained, recorded, and managed. Verify that consent requests are clear, specific, and presented in plain language.
Legitimate Uses Assessment
Where processing relies on legitimate uses under Section 7, verify that the specific ground applies and is properly documented.
Purpose Limitation Check
Confirm that data is not processed for purposes beyond those communicated at collection.
4Phase Three: Rights Enablement Review
Data Principals enjoy specific rights under Chapter III of the DPDPA. The audit must verify that mechanisms exist to honour these rights within prescribed timelines.
Access Request Procedures
Test the organisation's ability to respond to access requests with complete information about processing activities, data categories, and recipients.
Correction Mechanisms
Verify procedures for correcting inaccurate or incomplete personal data across all systems.
Erasure Capabilities
Assess technical ability to delete personal data upon withdrawal of consent, including from backups and archives.
Grievance Handling
Review the grievance redressal mechanism and response timelines against Rule 6 requirements.
5Phase Four: Security Controls Assessment
Section 8 imposes obligations to implement reasonable security safeguards. The audit should assess both technical and organisational measures.
Technical Safeguards
Review encryption standards, access controls, network security, and data loss prevention measures.
Organisational Measures
Examine security policies, employee training records, incident response procedures, and vendor management practices.
Breach Preparedness
Test breach detection capabilities and notification procedures against Section 8(6) timelines.
6Phase Five: Third Party Risk Assessment
Data Fiduciaries remain accountable for processing conducted by their processors. The audit must examine vendor relationships and contractual safeguards.
Processor Inventory
List all third parties that process personal data on behalf of the organisation.
Contractual Review
Verify that data processing agreements contain mandatory provisions and flow down DPDPA obligations.
Due Diligence Records
Check that security assessments were conducted before engaging processors and are periodically updated.
7Documenting and Reporting Findings
Audit findings should be documented with sufficient detail to support remediation. Each finding should include the specific requirement, observed deficiency, evidence, risk rating, and recommended corrective action. The final report should distinguish between critical gaps requiring immediate attention and lower priority items that can be addressed through normal improvement cycles.
Practical Tips
- •Use a consistent risk rating methodology aligned with the organisation's enterprise risk framework
- •Include positive findings to provide a balanced view and recognise areas of strong compliance