PII inventory and processing records

To meet the pii inventory and processing records requirement in ISO/IEC 27701, you must maintain an accurate, reviewable record of where PII is processed, why it’s processed, and how it flows across systems and third parties, covering both controller and processor roles. Operationally, this becomes a living “record of processing” tied to data mapping, retention, access controls, and change management ¹.

Key takeaways:

• You need one authoritative inventory of PII processing contexts, with clear controller vs. processor accountability ¹.
• The record must be operational, not a one-time spreadsheet; tie it to onboarding, change management, and third-party workflows.
• Audits fail less from missing fields and more from stale records, unclear ownership, and inability to prove updates happened.

ISO/IEC 27701 expects you to run privacy as a managed system, not a set of documents. The fastest path to audit readiness is to treat your PII inventory and processing records as a control that drives downstream operations: DPIAs/PIAs, contract clauses, retention schedules, incident response scoping, and data subject request fulfillment. The standard’s intent is straightforward: keep records of your PII processing contexts, and do it for both roles you might play in practice, as a PII controller and as a PII processor ¹.

For most organizations, the hard part is not listing applications. It’s capturing processing “contexts” in a way an auditor can trace: what PII you collect, the purpose, the legal or contractual basis that authorizes the processing, where the data goes, who can access it, and how long you keep it. This page gives requirement-level implementation guidance you can assign to owners, turn into tasks, and validate with evidence.

If you use a GRC system like Daydream, the goal is to make the record self-maintaining: intake forms, workflow gates, and evidence capture that update the processing record as teams ship products and onboard third parties.

Regulatory text

Provided excerpt (non-licensed summary): “Baseline implementation-intent summary derived from publicly available framework overviews; licensed standard text is not reproduced in this record.” The implementation intent captured for this requirement is: “Maintain records of PII processing contexts for controller and processor roles.” ¹

What the operator must do: maintain an auditable record of PII processing activities that (1) reflects reality across systems, products, and third parties, and (2) distinguishes whether you are acting as the controller (deciding purposes/means) or processor (processing on behalf of a controller) for each context ¹.

Plain-English interpretation

You need a single, current answer to: “Where do we process PII, what exactly is processed, why, who gets it, and what do we do with it over time?”
Then you need to prove you keep that answer up to date.

“Processing records” should be specific enough that you can:

• scope a breach to impacted PII and recipients,
• respond to a data subject request without guessing which systems hold the data,
• show that retention and deletion are defined per processing context,
• demonstrate accountability when a regulator, customer, or auditor asks who decided the purpose and controls.

Who it applies to (entity and operational context)

Applies to any organization implementing ISO/IEC 27701 that processes PII in any capacity, including:

• PII controllers: you decide why and how PII is processed ¹.
• PII processors: you process PII on behalf of another organization under contract ¹.

Operationally, this requirement touches:

• Product and engineering (features that collect/derive PII)
• Security (data classification, access, encryption, logging)
• Legal/privacy (notices, contracts, role determinations)
• Procurement/third-party risk (subprocessors, onward transfers)
• Data/analytics (pipelines, warehouses, BI exports)
• HR and IT (employee PII and identity systems)

What you actually need to do (step-by-step)

Step 1: Define the record structure (what fields are mandatory)

Create a standard template for a “PII processing context” record. Minimum fields that hold up in audits:

1. Processing activity name (plain label)
2. Business owner (accountable leader) and system owner
3. Role: controller, processor, or mixed; include rationale ¹
4. PII categories (customer PII, employee PII, identifiers, contact info, etc.)
5. Data subjects (customers, end users, employees, contractors)
6. Purpose(s) of processing (billing, authentication, support, marketing)
7. Systems/applications involved (source systems, storage, analytics, backups)
8. Data flow & recipients (internal teams, third parties, subprocessors)
9. Locations (regions where data is stored/processed; keep practical, not speculative)
10. Retention expectation and deletion method (schedule + mechanism)
11. Security controls at a high level (access model, encryption state, logging)
12. Related artifacts: DPIA/PIA, contract/DPA, LIA/legitimate interest memo if used, TIAs if applicable, SOP links

In Daydream, implement this as a required intake object with controlled fields and owner assignments, not an ad hoc spreadsheet.

Step 2: Build the initial inventory (fast, then refine)

Start with what creates the most risk and audit exposure:

• Systems that collect PII directly (web forms, mobile apps, support tools)
• Systems that store PII at scale (CRM, HRIS, data warehouse)
• Systems that export PII to third parties (email/SMS providers, analytics, KYC, payment processors)

Work top-down and bottom-up:

• Top-down: interview business owners for major processes (sales, HR, support).
• Bottom-up: pull from architecture diagrams, SSO app catalogs, cloud asset inventories, and third-party registers.

Deliverable: a first-pass inventory that is clearly labeled as “baseline” and assigned to owners for validation.

Step 3: Validate processing contexts with evidence, not opinions

For each record, confirm accuracy using:

• screenshots/config exports (data fields collected, retention settings),
• data dictionary entries for key tables/objects,
• third-party contract exhibits (subprocessor list, service description),
• pipeline definitions (ETL jobs, warehouse schemas).

Your goal is traceability: an auditor should be able to pick one processing activity and follow it through systems and recipients without gaps.

Step 4: Operationalize updates through workflow gates

A record that goes stale is a control failure. Add update triggers:

• New product/feature intake: no launch without a processing record update.
• Third-party onboarding: require recipients/subprocessors fields before procurement completion.
• Architecture change management: new datastore, new region, new integration updates the record.
• Retention changes: require approval and propagation to deletion jobs and backup handling.

In Daydream, set these as workflow rules: change tickets and third-party requests open tasks to the processing record owner and block closure without completion.

Step 5: Reconcile controller vs. processor responsibilities

Auditors will test whether you understand your role per context. Do a role review for:

• managed services where you determine the analytics use (often controller-like),
• customer-managed SaaS where you strictly follow instructions (processor-like),
• employee data where you are almost always controller.

Record the determination per activity, and link to the relevant contract clauses where processor obligations exist ¹.

Step 6: Establish a review cadence and quality checks

Set a standard review cycle and event-driven reviews. Use quality checks:

• missing owner,
• missing recipients,
• retention “TBD,”
• systems listed without data categories,
• third parties not in the third-party register.

Your privacy and security teams should run periodic reconciliations against: application inventory, third-party inventory, and incident logs.

Required evidence and artifacts to retain

Keep artifacts that show (a) the record exists, and (b) it is maintained:

• Master list of processing contexts (export from Daydream or controlled register)
• Completed processing record entries with owners and last-updated metadata
• Data flow diagrams or system context diagrams (where available)
• Third-party list tied to each processing context (recipients/subprocessors)
• Retention schedule references and deletion runbooks/tickets
• Change management tickets that triggered updates (with approvals)
• Internal procedures: “How to create/update a processing record”
• Training or enablement materials for product/procurement teams

Common exam/audit questions and hangups

Expect auditors to ask:

• “Show me your processing records and how you keep them current.” ¹
• “Pick one high-risk system. Walk me through PII categories, purpose, recipients, and retention.”
• “Where do you act as processor, and where do you act as controller? Prove it.”
• “How do you ensure third parties receiving PII are captured in the processing record?”
• “How do you handle backups and derived data in retention?”

Hangups that slow audits:

• records exist but no owner can explain them,
• recipients are listed generically (“vendors”) without names,
• retention is documented but not implemented technically,
• data warehouse and analytics flows are missing.

Frequent implementation mistakes (and how to avoid them)

1. Spreadsheet-only inventories with no workflow. Fix: put ownership, approvals, and triggers into your GRC workflow (Daydream works well for this).
2. Listing systems, not processing contexts. Fix: model activities (“Customer support case handling”) and link systems underneath.
3. Skipping third-party onward sharing. Fix: require “recipients/subprocessors” as a mandatory field and reconcile to procurement records.
4. No controller/processor role determination. Fix: add a required role field with a short rationale and contract link ¹.
5. Retention as a sentence, not a mechanism. Fix: add “deletion method” and link to the job/ticket/runbook.

Enforcement context and risk implications

No public enforcement cases were provided in the source catalog for this requirement, so you should treat this section as risk-based operational context rather than a case law summary.

Operational risk if you miss this requirement:

• You cannot reliably scope incidents, which increases response time and the chance of incomplete notifications.
• You cannot fulfill access/deletion requests consistently because you don’t know all system locations.
• You create contract risk with enterprise customers that expect a processor-ready record of processing and subprocessor transparency.
• You increase audit findings because “stale records” are easy to test and hard to defend.

Practical 30/60/90-day execution plan

Days 0–30: Stand up the register and capture the baseline

• Assign an executive owner (privacy) and an operational owner (GRC program lead).
• Publish the processing record template with mandatory fields aligned to ISO/IEC 27701 intent ¹.
• Identify the first batch of processing contexts: customer-facing products, HR, support, CRM, data warehouse.
• Load them into Daydream (or your system) and assign owners.
• Write one SOP: “How to create/update a PII processing record” and train key contributors.

Days 31–60: Validate accuracy and connect workflows

• Evidence-validate the initial batch with screenshots/config exports, contracts, and pipeline definitions.
• Reconcile third-party recipients against procurement/third-party inventory and fix gaps.
• Add workflow triggers: third-party onboarding, feature launch, and system change management require record updates before closure.
• Define retention expectations per context and link to deletion mechanisms or a remediation backlog.

Days 61–90: Make it durable and audit-ready

• Expand coverage to remaining business units and “shadow” processing (ad hoc exports, spreadsheets, BI tools).
• Implement recurring review tasks and quality checks (missing fields, stale updates, mismatches vs. system inventory).
• Run an internal audit drill: sample several processing contexts and perform a trace from collection to deletion.
• Package evidence for certification or customer audits: export the register, SOPs, and a sample of change-triggered updates.

Frequently Asked Questions

Do we need separate inventories for controller and processor activities?

You need one coherent record that clearly labels your role per processing context and supports both roles in audits ¹. Separate registers are optional, but separation often creates reconciliation problems.

How detailed do processing records need to be to pass an ISO 27701 audit?

Detailed enough that an auditor can pick an activity and trace PII categories, purpose, recipients, and retention without you “going and asking around.” If your record can’t be used to scope an incident or a DSAR, it’s usually not detailed enough.

Who should own a processing record entry: Legal/Privacy or Engineering?

Assign accountability to the business owner for the process, and operational ownership to the system owner who can prove what the system does. Privacy should govern the template, quality checks, and role determinations.

How do we keep the inventory current as products change?

Put update triggers into the workflows that already govern change: product launch checklists, third-party onboarding, and architecture review. Make record updates a closure condition for those tickets.

What about “derived data” and analytics in a warehouse?

Treat pipelines and the warehouse as part of the same processing context (or a linked context) and record what PII lands there, who can query it, and what exports occur. Auditors regularly test whether analytics environments are included.

Can Daydream replace our data mapping tool?

Daydream can act as the system of record for the processing register, ownership, approvals, and evidence. If you already have deep technical discovery tooling, integrate outputs into Daydream so audits have one authoritative place to pull records and proof.

Related compliance topics

• 2025 SEC Marketing Rule Examination Focus Areas
• Access and identity controls
• Access Control (AC)
• Access control and identity discipline
• Access control lifecycle management

Footnotes

1. ISO/IEC 27701 overview