Assessing the Federal Trade Commission's Privacy Assessments

Regulators worldwide need to keep tabs on companies caught violating consumer protection rules. Assessments by outside accounting firms are a key tool for regulators to detect privacy and security problems. It's not widely known that an assessment, a term of art in accounting, is a less-intense evaluation than an audit. Also, in practice, assessments overseen by America's top consumer protection cop, the US Federal Trade Commission, fall short of what's needed to ensure that information-intensive companies are protecting privacy and honoring promises. This article outlines five practical steps to make company oversight more effective.