If your business handles customer data in any meaningful way, California just made something very clear: you will soon need an independent cybersecurity audit—every year.
On July 24, 2025, California finalized new privacy regulations under the CCPA. These new rules require annual audits for companies whose data practices create what regulators call a “significant risk” to consumer privacy. It will be a phased rollout, targeting the largest companies first.
This doesn’t just apply to big tech firms. The thresholds are surprisingly low:
- Do you process data for more than 250,000 people per year?
- Or do you handle sensitive data (like health info or SSNs) for more than 50,000 individuals?
If so, you’re now subject to California’s annual cybersecurity audit requirement. And yes—even if you're a smaller business. The law has a phased rollout, depending on the revenue of the company.
What the New Law Requires:
Your audit must be:
- Completed annually
- Conducted by a qualified, independent auditor
- Certified to the California Privacy Protection Agency (CPPA) by April 1 each year
The audit must cover:
- Penetration testing
- Passwords and access control
- Data encryption
- Network monitoring
- Security training
- Incident response planning
This is not optional. And if the CPPA asks for proof? You have 30 days to produce it.
What This Means for You
If you’re like most businesses, you rely on a managed service provider (MSP) for your IT and security infrastructure. But here’s what many business owners miss:
You’re responsible for proving the security decisions that MSPs help you implement.
If you don’t have clear documentation—or if you can’t show an independent audit took place—you may be out of compliance. Worse, if there’s a breach, you may be out of legal defenses too.
Here’s What You Should Do:
- Ask your MSP whether your business qualifies under California’s new rule.
- Find out if they offer third-party penetration testing and audit documentation.
- Request an audit timeline so you’re not scrambling before a deadline or investigation.
Cybersecurity is no longer a back-office concern. It’s front-page, courtroom, boardroom stuff. This law is just the beginning.
The Bottom Line:
This isn’t about passing an audit. It’s about having proof when a regulator—or a lawyer—asks what you did to protect your customers’ data.
If you’re relying on an MSP to help run your security, make sure they’re also helping you meet the law.
Because in 2025, security without evidence isn’t security at all—it’s exposure.
