I was contracted in to a place to do among other things cyber security insurance audits, and they asked me to stop doing them because I refused to lie to their insurer. "Wait but if we only score 20 / 300 that makes us look kind of bad" uh huh.
there exists objective measure of security, which would be some sort of hacks/breaches per period. If customers cared about it (and i assume they do), they would choose companies that have less breaches over others with higher counts, normalized on cost differences.
Therefore, if companies didnt actually try to fix their security but instead just checked boxes, they would get breached more often, resulting in customer losses.
The only thing stopping this from actually occurring is the lack of mandatory regulatory reporting of it. So this is where gov't needs to step in and mandate disclosure etc.
and why does this idea work for accounting audits, but not for security? As long as regulations for companies exist, they would necessarily follow it, and this would lead to reporting of security breaches just like companies would have to report their financials honestly.
The difference with accounting is that, relatively speaking and certainly within this context, few businesses are cash businesses. Your bank is keeping at least a basic audit log of money coming in and out of the corporate bank account. Your payment processor is keeping at least a basic audit log of who paid you and how much. You won't make your auditors happy if they're the only documents you have, but they're at least something to be handed over in an audit that pretty much every software business will have. Cybersecurity? By default, nothing is collected.
So if you have no logging and such, you will have already failed regulatory reporting standards - just like you would fail an accounting audit if you have no paper trail of where your money went!