An audit is assessing a small business that is selling automotive parts and diagnostic services. Due to increased customer demands, the company recently started to accept credit card payments and acquired a POS terminal. Which compliance regulations must the audit apply to the company?

The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards designed to ensure that all companies that accept, process, store, or transmit credit card information maintain a secure environment. Since the small business has started accepting credit card payments and acquired a Point of Sale (POS) terminal, it now handles cardholder data. Therefore, it is mandatory for the business to comply with PCI DSS to protect this sensitive payment information and avoid penalties.

A. HIPAA (Health Insurance Portability and Accountability Act) is a U.S. federal law that regulates protected health information (PHI). It is not applicable to an automotive business.
B. FISMA (Federal Information Security Management Act) is a U.S. federal law that requires federal agencies to implement information security programs. It does not apply to private businesses.
C. COBIT (Control Objectives for Information and Related Technologies) is an IT management and governance framework. It is a set of best practices and is adopted voluntarily, not a mandatory compliance regulation.

1. PCI Security Standards Council. (n.d.). PCI Security Standards Overview. Retrieved from https://www.pcisecuritystandards.org/pcisecurity/. (The official source states that PCI DSS applies to "any organization that accepts, transmits or stores cardholder data").

2. Cisco. (2016). Cisco PCI Solution 3.2 Design and Implementation Guide. Document ID: 118894. Chapter: "Introduction to PCI DSS," states, "The PCI DSS applies to all entities involved in payment card processing—including merchants, processors, acquirers, issuers, and service providers...".

3. National Institute of Standards and Technology (NIST). (2010). An Introductory Resource Guide for Implementing the Health Insurance Portability and Accountability Act (HIPAA) Security Rule (Special Publication 800-66 Revision 1). Section 2.1, "Applicability of the Security Rule," clarifies its scope is limited to covered entities dealing with electronic PHI.