Month: June 2017

PCI-DSS – So Why Aren’t We QSA?

We have faced this question many times before over the course of 7 years working on PCI-DSS in this region. Many customers have asked us, why haven’t we become QSA (Qualified Security Assessor), considering the amount of PCI work we have been involved in, as well as the PCI-DSS knowledge that we are having?

The answer is simply – we choose not to.

Don’t get me wrong. QSAs certainly have their place in our world, and the fact that we work closely with one, as well as representing them in our country states the importance of having a solid auditing foundation in every project that we go in.

But here are the main reasons why we have decided that being a QSA would hinder us, rather than assist us:

a) Conflict of Interest

This is a huge reason why we maintain our consulting and implementation practice, while choosing not to become an auditor. Our business is not just PCI-DSS. We have a huge chunk of consulting practices in ISMS (ISO27001), training as well as upcoming compliances like SOC1,2, Personal Data Protection Act etc. QSAs and the question conflict of interest has been around for a long time. It is also addressed in Provision 2.2.2 in the PCI-DSS validation requirements for QSA

The QSA must describe the company’s practices to maintain and assure auditor independence, including, but not limited to, practices, organizational structure/separation, and employee education in place to prevent conflicts of
interest in a variety of scenarios, such as the following:

The QSA customer uses products or applications developed or manufactured by the QSA company.
The QSA customer uses products or applications managed or configured by the QSA company.
The description must include details with respect to compliance with the Specified Independence Requirements called out in Section 2.1 above.

The thing is, we do a fair bit of work for our clients – including development of policies, reviewing their security, implementing policies and logging products etc – because we are good at it. Before PCI, we were operational guys, guiding SOCs and NOCs, troubleshooting routers and switches, deploying firewalls and SIEMs etc. We weren’t bred as auditors from the start, so most of us have an inherent instinct to just go in and get the job done for our clients. Now, the problem is once we do wear the auditor’s hat, there are a lot of grey areas. We make this demarcation very distinct in our IT general Controls audit – the moment we implement something for our client, we cannot audit or assess it. We can’t audit our own work. This is not just for PCI, this goes across the board for anything we do.

PCI gets around this by ensuring that the QSA has proper internal segregation – meaning it is generally accepted that policies be put into place that mandate a separation of duties between QSA Auditors and QSAs, or other individuals within a QSA certified company who provide remediation support. So generally, any QSA company should have its consulting group separated from its audit group. Now, PCI-SSC doesn’t specifically state that QSA Companies cannot provide remediative services – after all, if the QSAs know what it takes to pass PCI-DSS wouldn’t they be the best source of knowledge to clients after all (and they often are) – but QSAs need to be very aware that they cannot push their products or services as the only option for compliance. Customers must have the options on the table, the knowledge that there are other options in order for them to make informed decisions.

It’s made trickier due to our DNA as a CPA company. PKF wasn’t born an IT company or a security firm – our roots are in accounting and auditing, and most of our partners hail from Big 4 (PWC, KPMG, EY, Deloitte) and even ex-AA. In fact, I am the only non-audit guy in the partner table and my jokes are often not understood. Due to this background, inherently we have this default position whereby if there are any grey areas, it’s safer to err on the side of caution and not do it unless proper conditions are clear. So while in PCI the arrangement of QSACs providing remediation works are allowed with certain conditions, the very memory of how an 89 year old accounting firm had to surrender its CPA license due to the largest auditing scandal in history still lives on in our industry.

b) We Hate Auditing

Well not really. We are auditors after all! We do have a fair bit of audit and assessments as part of our work. But boy, have you ever been in an audit as an auditor? Everyone just hates you. I remember auditing for a very large BPO company for their IT general controls and software development. The head of software looked like he was going to put live electric eels down our pants halfway through our interview. And we weren’t even antagonistic. Asking for documentation of his software practices was like asking for the what Edward Snowden had. Another company had their head of operations sit with us in the room for 1 hour and throughout the entire session, he refused to answer anything without legal in the same room. It was like we were interrogating him for murder instead of just asking if he had a change management procedure. It’s not all like this of course, we do have excellent clients who are on the same page as us mostly and we do feel the whole auditing process is enriching to our professional lives. Really. Even with that, the follow up audits, the report writing and quality assurance process etc, the evidence gathering and formatting into the proper report, the cycle of obtaining management comments etc. It’s just very taxing on the guys. Report writing takes up a chunk. And guess what – in PCI, a normal Report on Compliance (ROC) for level 1 onsite assessments can stretch up to a thousand pages. Yes. A. Thousand. Or more. It’s like asking us to become Leo Tolstoy and start writing War and Peace every single assignment.

c) Cost vs Benefit

Being a QSA is a great achievement. But there is a huge outlay for the company as well. Not only there are fees you need to pay to become QSA, there are fees you need to pay to operate in particular regions as well. Then you have training fees for your QSAs, yearly maintenance etc. It’s a lot of money to run a QSA company and because of that, you need to get your bacon from all over. For instance, if you have license in Asia-Pacific, then you probably want to tackle the China market. Or else, focus on the SEA region and get your QSAs to fly between countries. Focusing on a single country isn’t going to make up for the cost of maintaining your QSA company, at least from our point of view and our brief calculations. Now because of this, we need to fan out. To fan out, we need to expand the company. To expand, we need to hire and get jobs. I’m all for it, but its a matter of being a big fish in a small pond or a small fish in a big pond. As of this moment, our strategy is not to overstretch ourselves too much and to establish ourselves with the clients we have. It’s not as if PKF is in a hurry to IPO or go anywhere. We’re here for the long run, and in Standard Chartered slogan: We are here for good.

d) Stretching is not fun

We tried it before.

As in not physically, but in terms of a company. We grew our tiny little professional services firm to 16 people once upon a time, with dedicated R&D and Project Management group only to get kicked in the butt by a guy called “No Jobs”. We grew so fast, we didn’t get the sales in to keep up and after the initial projects were done, we were left with a lot of people on the bench playing Pokemon-go. We stretched. But we over did it. It’s not to say we are now not being ambitious. We still are, but we need to be realistic with our goals. If we target to get 10 – 15 tier one customers to keep our benefit more than our cost – how many QSAs do we need to do that? After that, how many consultants to do the remediation work?

Additionally, even if we had 10 QSAs for instance, these guys will be scrambling all over the region doing audits. They won’t have time for operational work. They won’t have time for consulting or providing technical services. They will either be auditing a customer, or they will be on a plane somewhere, or they will be writing or reviewing one of those 1000 pages tomes called the ROC.

e) We Want to Stick with our Customers

The bottom line is this. If we hadn’t found a trusted QSA whom we can work with and who are mostly on the same page as us, we would have gone and gotten our QSA ourselves and went another direction. I think we have enough legs and enough entrenchment in the region and global to do that. But we found a great partner. We found a QSA that we could work with and didn’t do any BS work. We found a QSA that had similar philosophies (although we are still working in synching our concept of deadlines, but hey, that’s like marriage, ain’t it) – and for 7 years, we have been working great together. They like what we do, that they can hands off a lot of the remediation advisory to us and don’t have to get on conference calls all the time or have to fly in and out of our client’s offices for weekly meetings. We like that we can work with our customer, look after our client’s interest and not worry to much about whether we are overstepping our limits as advisors or consultants versus auditors. We can stick with our customers and give them all we have. We can spend a whole day in our customer’s premise working with them without worrying that we need to head off for an audit for 2 weeks in Timbaktu. We don’t have to fly in and out of countries or tell our clients we can only meet 2 weeks later. If you want us within 24 hours, we will have someone there. Best of all, it’s very clear that once auditing starts, we are sitting on the side of our client, and ensuring that our client have what it takes to pass PCI-DSS.

Of course, this is simply our view at this current time. We are well aware of the flowing and ebbing of different forces in our industry and it might come a time whereby this model doesn’t work anymore. But for now, honestly, we just want to get cracking at troubleshooting your Cisco ASA as opposed to writing a War and Peace Novel. Drop us a note at for more information!

IATA PCI-DSS: Who is doing what?


We have been receiving a ton of emails and inquiries lately ever since we started marketing our services for PCI-DSS to travel agencies. It has to be noted that some of these travel agencies were our clients to begin with. PKF has a very large set of customers because we do the entire end to end corporate services. We are not just one technology advisory firm. We have tax advisory, business advisory, internal audit, external audit, outsourced, accounting, corporate finance, forensics accounting etc. So over the course of 20+ years we have amassed a ton of clients and many of them are travel agencies, whether in technology group or in others. This is where our main queries stem from. Existing travel agencies are querying us and in turn they are letting others know about us, so much so that we are now compiling an FAQ to address all questions being thrown at us on PCI-DSS.

One common question we get asked is: WHO is initiating this PCI-DSS?? We even get accused of being the ones initiating this PCI-DSS on them and planting a deadline of March 2018 for them.

So let’s get the story here straight. For this, it is necessary to go from the beginning to the brief history of PCI.

a)  PCI-DSS began its life in 2004 but only in 2006, PCI Council was formed to govern this standard. The council is now made out of card brands Mastercard, Visa, Amex, JCB and Discover/Diners. The purpose was to ensure there was a standard way that merchants/service providers can secure their credit card interacting systems to, instead of to each individual card brand’s compliance. It’s a good thing. Basically the whole idea is to ensure the whole ecosystem where credit/debit card is used/processed/stored/transmitted is secured.

b) IATA’s story probably began back in 2015 when, according to GDS Amadeus, VISA Europe issued a deadline to acquiring banks using its network that all airline merchants should be PCI-DSS compliant by 31 December 2017. So the airlines got into a huff and took a look at their processes, which is like any other merchant – they have their acquiring bank to do the authorisation, clearing and settlement. So far ok.

c) However, the airlines had one problem: Indirect distribution channel. This is where airline tickets are distributed via travel agents, either through walkin, MOTO or internet. Travel agents use a GLOBAL DISTRIBUTION SYSTEM (GDS) that link to airlines to check for ticket and also to financial institutions for authorisation. And these finally link to IATA. Why? IATA has the Bank Settlement Plan (BSP) to – yup you got it – facilitate the clearing and settlement. BSP allows many travel agents to connect to many airlines, allowing a one stop shop to ensure everyone gets what they want, instead of travel agents separately dealing with airlines and vice versa. It’s orderly and it helps the industry.

d) However, the BSP, due to its connectivity to the Airlines now needs to ensure its downstream connecting parties are also PCI-DSS. Cue, travel agents and this is where IATA tells the travel agents, look, get your act together because the airlines need to be certified, so we need to be compliant, so you need to be compliant.

So in conclusion, it is IATA initiating it to the agencies – because there is an upstream push for them to be compliant. It’s common as well – many times payment gateways are asked to be compliant by their bank – we hardly see any entity embarking on PCI-DSS just because they feel that it’s the best thing to do for them. But the overall initiator of PCI still remains the card brands – whether it is VISA, Mastercard or Amex etc.

Now the question here is this – because IATA is considered a processor (with their BSP), they are enforcing a deadline of March 2018. At the same time, they also need to provide a way for agencies to submit the compliance document.

It’s a bit confusing here, because Agencies are also merchants in their own sense. They also have their own channels to collect payments, and some payments are made directly to their merchant account, and they settle with IATA through cheque/cash/bank in etc, not via card. Everytime a card is entered in the BSP, the agency is acting in behalf of the airlines using the airlines merchant ID. Everytime a card is used in the merchant’s own environment such as POS, EDC or Internet, the agent is the merchant, and they do authorisation, settlement etc through their own bank. IATA/BSP is not involved in the credit card flow in this case.

However, because IATA is requesting PCI to be adopted by agencies, agencies also need to look into their other channels that do not involve IATA! So imagine, an agency does their SAQ C/C-VT and sends it over to IATA, but to cover their EDC or terminal business, they do an SAQ B – who on earth do they send this over to? Well they send it over to their own acquiring bank. Their bank asks: Hey, what the heck is this? Well, it’s our PCI Compliant SAQ/AoC, Mr Bank. And Mr Bank is happy but somewhat confused and asks: Why are you doing it anyway? I didn’t ask you to do it yet because you only do 1 – 2 transactions with us. (Please note, even if it’s 1 – 2 transactions, you are still considered a Level 4 merchant, but most banks are ensuring their large volume merchants are compliant first). So therefore, agencies have two upstream processors to send their PCI documents to – IATA (for IATA channel) and their own bank, for others.

In the next post, we will explore on the validation requirements and why its so important to know what validation requirements apply to you and how. Do drop us a note at We are having a bunch of queries, but we will answer you ASAP.

PCI-DSS and how we messed up the scope


Reflecting on challenges of a recent PCI-DSS project for a client and the key learning points for an effective implementation

People team challenges – having a team to champion the project

When we started the PCI project, we were faced with multiple changes in the client’s project manager and so the project was like a car unable to start on a cold morning (for those old enough to remember there were such cars back in the 80s!).

Eventually, by working with the client, the musical chairs stopped and we had a stable project team to champion the PCI-DSS project.

The importance of the scope

By then, so many changes had been made in the systems and people that we were asked to rescope the work.  Now, scope in any PCI-DSS project is absolute key. If you start wrongly, you will definitely go down the rabbit hole and never come out.

(Mis)Understanding the process flows

The client described how the credit card data was fed into their system through the credit card terminals connected to their POS systems in their nationwide store network.

Initially, we were quite surprised that credit card data would be flowing back into the retailer’s system so they could do their reconciliation.  Our experience suggested that retailers would simply transit credit card information through the credit card terminals to the acquiring bank and then receive back a transaction ID or approval code.

Further enquiries got the same answer and we were assured that the information would be ‘encrypted’ and stored in ‘encrypted’ form.

On the basis of their answers, the client expected to undergo an onerous Self-Assessment Questionnaire, consisting of over 320++ questions!

Managing information

Our team took their word for it, and began the project by asking them to draw out their process flows so we could assist them in scoping their systems and completing an asset inventory (a key part of the PCI-DSS programme) together.

And this was where things got a little messy.

Because they insisted the credit card terminals that were interacting with the cards belonged to the acquiring bank and they had no influence over it, they did not have an asset list.

Also, with a significant number of branches it was difficult to provide an asset list to cover all relevant hardware and software across the portfolio.

The pushback caused the project to once again grind to a halt. Without a scope confirmation, we could not start any PCI implementation for them, in case we over-committed or under-committed on the plan.

Benefits of documenting process flows

The project was being worked out at management level for a long time before it was brought up to the director level, but once it did, things began to move.

We decided to go on the ground to a few of the store locations to really see what was going on.

What we found out surprised everyone:

Credit card information indeed never flowed back into the client’s system!

Getting the terminology right

The so-called ‘encrypted’ credit card information from the bank that was supposedly sent back to the client after the authorization, was in fact, ‘truncated’, not ‘encrypted’.

Apparently, the client had thought these were the same thing.

In PCI speak, encrypt means to protect credit card details by making the information unreadable with a key. The main reason is that there is a need to ‘de-crypt’ the information back again.

Truncation, on the other hand, meant that the card number itself, when sent has already its numbers ‘X’ed out. This is different in a sense that truncated card information is NOT card information because the critical numbers have already been X’ed out, leaving (usually) just first six and last four numbers of the credit card number visible.

Immediately, it was like a light being flipped on.

The team worked hard to optimize the scope by confirming the other flows and observing live transactions take place.

At the end of a 2 day onsite scoping assessment, we concluded that this client was eligible for a much reduced – only around 80 questions – assessment and then by filtering further, we pared down their compliance questions to only 40 reducing the scale of this compliance project by more than 85%.

Key messages

The takeaway here, from our experience would be:

  1. All PCI-DSS assignments require a stable and strong project team – get the right people, in the right place, with the right focus
  2. Understand the client’s terminology and descriptions and then check and check again. Ensure that you start from the best position, and not chasing the wrong end of the stick.
  3. For PCI-DSS merchant compliance it is essential to explore if the client is eligible for any reduction in the scope and don’t just go with the default. The time and cost elements of getting this wrong could be very substantial.
  4. Nothing beats being onsite and to undertake live walkthroughs of the actual processes. In this case, the earlier the better, so the assignment can be properly scoped.  A different set of eyes might be able to unlock the project obstacle – and in our case, it was essential to have the onsite scoping exercise.

Finally, because of these findings, the compliance is now ongoing and finally we are seeing the light at the end of the tunnel.

If you have any queries on your scope or compliance on PCI-DSS, drop us an email at and we will get back to you ASAP.

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