It is easy for many smaller organisations to overlook the importance of formal quality management processes such as internal audits. Many consider internal audit management to be something only larger and more complicated entities need to commit to; in truth though, organisations of all sizes can benefit from this level of attention being paid to their critical processes.
When an internal audit is done well, it can be a key tool in your efforts to clarify what is working well within your organisation, and where improvements need to be made. However, the steps you take to carry out your own business’s internal audit must be sensibly judged and proportionate.
Why is it important to conduct an internal audit?
As the term suggests, internal audits take place internally – that is, they are carried out within an organisation by someone employed there. They take the form of inspections or assessments geared towards determining how well or reliably the given organisation’s operational processes and procedures are working.
Internal auditing is a more formal, structured and systematic approach than simply vaguely ‘keeping an eye’ on how an organisation’s processes are doing. This especially disciplined nature of an internal audit helps to bring a series of advantages.
For example, internal audits could help to shed light on the major opportunities for improvement across your business’s processes, that you may not presently be taking. They can aid you in identifying the root causes of any operational or strategic problems, to give you greater insight into what needs to change in order to enhance your processes in the long run.
Having internal audits carried out at your business on a regular basis will help you pinpoint ways to save time, money and effort on your processes. It will also demonstrate to your personnel and the outside world that your organisation is committed to complying with the highest standards in relation to quality, health, safety, and environmental protection.
What steps should you follow in managing internal audits?
Effective internal audit management is likely to be more than just a brief quality control check. Getting your company’s internal auditing right will significantly help to optimise everything your organisation does, with suitably long-term benefits. The below tips will help ensure you make the right moves.
1. Take responsibility for the provision of internal audits
If your organisation doesn’t yet have an internal audit management function, you should routinely review whether such a function might be needed.
While you may be more likely to decide in favour of carrying out internal audits if your organisation is larger, relatively complex or subject to certain especially pressing organisational risks, as we touched on above, those are not the only businesses that can benefit from regular internal auditing.
In the event that your company does decide to obtain some level of internal audit capability, it must take ultimate responsibility for the work of that auditing, even if it outsources the auditing function to some degree. Your business will need to accept responsibility for the decision on whether to carry out internal auditing, as well as how such auditing is undertaken.
2. Set clear goals
Being clear about the goal for your company’s upcoming internal audit will greatly help you make the whole process worthwhile; after all, you won’t know whether the audit has been a success if you have no means of measuring that success. Any vagueness about the audit’s goal will also make it harder for you to put together a solid plan – for both the audit itself and the steps that follow.
So, be sure to ask yourself what you are going to do as part of the internal audit, and why you are conducting an audit in the first place. For instance, some organisations carry out internal audits with a particular view to determining how they can safely cut costs, while others may be looking to scrutinise their processes and how to potentially enhance them, at the same time as mitigating risks.
There are dense volumes of information about any business’s operations that internal auditors will need to sift through. So, it couldn’t be more crucial to set out clear priorities. For this, it is important to look back at the broader objectives you have already decided on for the audit, so that you can decide which process components or risks require the most urgent attention.
4. Identify key people and stakeholders
For the internal audit to begin, you will need to be clear about who will be involved in this process. Once you have identified the key people and stakeholders – and the exact people you pick out will depend on such factors as the numbers of staff members, departments and sites within your organisation – you will be able to keep them suitably informed, so that they can take your audit into account.
Knowing who the stakeholders are in your internal audit will also be invaluable for determining your audit’s scope and how much time will be needed to communicate with everyone involved.
5. Ask the right questions
This is something else that needs to be considered in the early planning stages for your internal audit. The “right” questions to ask are naturally likely to differ across organisations and circumstances. Nonetheless, broad examples applicable to almost every internal audit include the likes of “what are we presently doing?”, “how are our current processes running?” and “what production objectives have we set, and how are we achieving them?”
You might also ask how the agreements you have previously reached about your organisational processes are being monitored and safeguarded, and what – according to your team members – is currently working well, and what isn’t.
6. Record and report your findings
There will be a need for formal recording and reporting of the findings arising from your organisation’s internal audit. Even before the reporting itself happens, decisions will need to be made on how frequently findings will be reported from internal auditing, and how the opinions of internal auditors will be expressed.
As for the reporting itself, at the very least, it should address significant risk exposures, risk-taking that goes beyond risk tolerance levels, and any control issues that are identified during the internal audit.
It should also be reported what progress has been made on the work carried out from the internal audit plan, and what issues of concern may have arisen with regard to staffing and resources for your company’s internal audit function.
7. Use the best tools for the job
Finally, you can make the management of your company’s internal audits so much smoother, quicker and stress-free a process with the help of the right software. It’s just one more aspect of what is likely to be your organisation’s ongoing efforts to streamline its quality management processes and replace previously manual and time-consuming tasks with more intuitive and automated ones.
Our own Vision Pro platform, for instance, incorporates Audit Management software for hosting all your auditing templates or question sets. While the auditing process will not look exactly the same from one organisation to the next, our software offers broad benefits to maximise ease of use for every entity that depends on it – ranging from clear dashboards and automatic email alerts for overdue audits, to customised or adapted audits and a mobile app for collecting data on-site. Budgeting for repairs or replacements, scheduling maintenance and managing compliance are all part of the software package.
To learn more about our finely optimised audit management platform and how else Vision Pro can aid your organisation as it seeks to improve governance and compliance day by day, please do not hesitate to call one of our experts today.