After years of development and extensive stakeholder engagement, California has finalized groundbreaking cybersecurity audit regulations under the California Consumer Privacy Act (CCPA). These new requirements may significantly impact how covered businesses protect consumer data.

The New Regulations

The California Privacy Protection Agency (CPPA) Board approved comprehensive amendments to CCPA regulations covering cybersecurity audits, risk assessments, and automated decision-making technology (ADMT), among other things. The regulations were subsequently approved by the California Office of Administrative Law on September 23, 2025, marking the completion of a rulemaking process that began in November 2024.

When Does the Audit Requirement Apply?

Not all businesses subject to the CCPA must conduct cybersecurity audits. According to the regulations, the requirement applies only to businesses whose data processing presents a “significant risk” to consumer security, defined by specific thresholds:

Businesses must conduct annual cybersecurity audits if they fall into one of two buckets:

  1. They derive 50% or more of their annual revenue in the preceding calendar year from selling or sharing consumers’ personal information, OR
  2. They have over $25 million in annual gross revenue (adjusted every two years; currently $26,625,000) AND process in the preceding calendar year the either:
    • Personal information of more than 250,000 California consumers or households, OR
    • Sensitive personal information of more than 50,000 California consumers or households.

These thresholds ensure that the audit requirement focuses on businesses handling substantial volumes of consumer data or those whose business models center on data monetization.

Effective Dates and Compliance Deadlines

The regulations officially take effect on January 1, 2026. However, businesses have staggered deadlines for submitting their first cybersecurity audit certifications to the CPPA based on their revenue size:

  • April 1, 2028: Businesses with annual revenues over $100 million for 2026.
  • April 1, 2029: Businesses with annual revenues between $50-100 million for 2027.
  • April 1, 2030: Businesses with annual revenues under $50 million for 2028.

This phased approach gives businesses time to establish robust audit processes and implement necessary cybersecurity improvements before their first submission deadline.

What the Audit Requirement Entails

The regulations establish detailed requirements for conducting comprehensive cybersecurity audits, the results of which must be provided to a member of the business’s executive management team who has direct responsibility for the business’s cybersecurity program. Here’s a summary of what businesses must do:

Auditor Qualifications: Audits must be conducted by qualified, objective, independent professionals—either internal or external—using recognized auditing standards such as those adopted by the American Institute of CPAs. Auditors must possess expertise in cybersecurity and auditing methodologies.

Audit Scope: The cybersecurity audit must comprehensively evaluate the business’s cybersecurity program across 18 key areas, including:

  • Secure user authentication and access controls
  • Encryption of personal information
  • Account management systems
  • Personal information inventory and management
  • Secure hardware and software configuration
  • Vulnerability scanning and penetration testing
  • Audit-log management and network monitoring
  • Network defenses and segmentation
  • Antivirus and anti-malware protections
  • Vendor and third-party risk management
  • Data retention schedules and secure disposal
  • Incident response capabilities
  • Cybersecurity training programs
  • Breach and incident review for the audit period

Even businesses not subject to the mandatory audit requirement should view the 18 standards as a framework for evaluating their own cybersecurity programs, as the CPPA may use these criteria when assessing CCPA compliance more broadly.

Documentation Requirements: Businesses must prepare detailed audit reports documenting the review scope, policies assessed, evaluation criteria, supporting documentation, identified compliance gaps, and remediation plans. All audit records must be retained for five years.

Annual Certification: Companies must submit written certifications of compliance to the CPPA on an annual basis, signed under penalty of perjury by appropriate executive leadership.

Flexibility for Existing Audits: Importantly, businesses may leverage cybersecurity audits conducted for other regulatory purposes—such as NIST Cybersecurity Framework 2.0 assessments—provided they meet all CCPA requirements. This allows companies to avoid duplicative efforts where existing audits are sufficiently comprehensive.

What This Means for Your Business

Businesses subject to the audit requirement should begin preparation now by identifying qualified audit personnel, establishing appropriate internal reporting structures, conducting comprehensive inventories of personal information processing activities, and documenting current cybersecurity practices. The clock is ticking toward those first compliance deadlines in 2028.

Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.

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