My company's system administrator is asking for our passwords for an ISO audit and my VP IT operations support says it's mandatory for ISMS (ISO27001).
Can someone confirm if this is true?
This is not true. Besides the fact that a sysadmin should be able to change your password when needed, it is probably in breach of the very controls they claim to be enforcing.
It is their job to ensure that controls are in place around passwords, but it is the users responsibility to keep their passwords confidential.
Any shared admin passwords should be managed centrally by your sysadmin.
ISO 27001 requires management of passwords and requires having password policies. Someone in your company is interpreting this as needing to inspect all passwords in the clear to ensure that they meet the password policy.
But this is a terrible way of doing this audit. Technology should be in place to force people to comply with password policies when they make passwords, not to inspect them by hand once they are made.
There is a wide-ranging series of failures if they want to audit passwords by looking at them ...
From (https://advisera.com/27001academy/blog/2015/07/27/how-to-handle-access-control-according-to-iso-27001/) there is a summary about user passwords:
User responsibilities (subsection A.9.3)
This is a very short subsection (with one control only) that requires you to define how the users will keep their authentication information secret (e.g., protect their passwords). This is usually done through some document like the Acceptable Use Policy, which defines rules like these: do not write the passwords down, do not disclose them to anyone, do not use the same password in different systems, etc.
In essence if a user reveals his or her password the company fails the audit.
Your password is more important than your signature used to be in the old days. Because in the old days your signature could be forged but now days your password is invisible (in theory at least).
Your password authenticates your User ID. Your User ID gives you certain but restricted powers within areas of your company. Accounting controls require separation of duties. For example a user who approves purchase orders cannot approve receipt of goods. A user who approves receipt of goods cannot approve vendor invoices.
If a criminal (or ISO27001 auditor or IT person) had access to all three passwords they could setup a fake vendor account, setup a fake purchase order, setup fake receipt of goods and pay funds to the fake vendor account.
This is against ISMS. I am ISO27001 audit certified and it is definitely is not there. You have two groups of passwords:
You may find this question on ServerFault of some use: https://serverfault.com/questions/293217/our-security-auditor-is-an-idiot-how-do-i-give-him-the-information-he-wants?s=1|2.3233
I would agree with other comments here that suggest that if this is what they 'require', it is better they reset all passwords to something they chose, and pass that information on to their auditor (in the real world, they should not be giving any passwords to the auditor).
Checking Wikipedia (https://en.wikipedia.org/wiki/ISO/IEC_27001:2005), I can see a section on password management, which begins by saying:
The password management deals with allocation, regulation and change of password rules of the organization
I suspect the emphasis should be on 'rules', not on 'passwords'.
Controversial answer time...
The important thing ... Our auditing does require us to document passwords that other people should legitimately have, it does require us to document who should be able to login to certain high security systems, and it does require us to have a way to provide passwords to people. The key detail being that it doesn't require us to do so directly or in the clear.
Say you have an internal password management system that encrypts at rest, encrypts in transit, audit logs access and enforces restricted access ... this is a 27001 acceptable method of password handling. 27001 audit says you need to share a password with someone, it goes through that.
So, sort of passwords that you should be sharing? As few as possible.
Basically, good policies mandate just enough password storage such that the only person locked out of anything if an employee gets hit by a bus is that employee. So, the audit can ask someone to make sure the root passwords for the company servers are stored somewhere as a failsafe policy... it can't ask you to store your personal AD or helpdesk credentials.
In short, passwords should only be shared with someone if the is a justified need for that person to also login to that account, and if that need can't be satisfied via a method that doesn't require you to provide said password. If both points aren't satisfied, raise a compliance issue with the company's security committee.
Hopefully that provides a slightly more realistic and non-binary view of the subject. There is a reason to provide passwords, it's rather important to know why someone thinks you should provide them before saying yes or no to the request.
To be fair, my job involves handling and/or setting primary administrator passwords for corporate resources occasionally. Most people audited by 27001 doesn't have that job responsibility.
Of course it is not, as other answers pointed out. Your first efforts should go into changing the requester's mind.
If you are, despite your efforts, somehow forced to provide your password - get that request in writing.
You can then reply, also in writing, that you will provide the requester this information in a sealed enveloppe and that from that moment on you are not responsible for any actions performed via this account, whose password just became public knowledge at the request of management.
It is likely that you have in the past accepted (directly or indirectly) that you are in charge of the account, which is accessed by a password you are the only one to know. You have also probably accepted that you would not share this account.
They can and should make a program where you input your current password and it checks if it meets the ISO requirements. The program could also check against the database to check if the password is really yours.
Anything else is madness and effectively makes your password worthless if accessible by too many people, though the administrators can probably access your accounts one way or another anyway. Who knows what you use your password for.