Most people see audits in a negative light. It doesn’t matter whether they are internal audits, external audits, finance audits, or any other type. Auditors themselves are viewed as the uptight enemy who waste everyone’s time. It is easy to understand why and it is sometimes deserved, but it shouldn’t be.
Audits should add value. Yep, you heard me.
Here is how you do it.
Understand the Organisation’s Strategy
It is important to have a clear understanding of the organisation’s objectives. High-level planning documents such as corporate plans, business plans and operational plans are extremely useful. These plans have already documented the organisation’s objectives and assessments of key risks.
Plan According to Risk
Determine which processes must be performed so that the organisation can meet its most important objectives. The ranking of business processes may consider such issues as:
• Failure to meet statutory obligations for service delivery.
• Failure to meet key stakeholder expectations.
• Loss of cash flows essential to business operations.
• The degree of dependency on business processes by internal business units or clients.
• Cumulative damage to the entity by the disruption to the critical process.
• Reputational consequences.
Talk to Managers
To determine the ranking, it is important that the concerns of executive and senior management are obtained regarding business priorities and continuity issues.
Talk to Staff
If you want to know where the inefficiencies and frustrations are in the organisation then go to gemba, a Japanese term meaning “the real place”. In business gemba is the place where value is created. The processes in pain are often the ones where big savings can be made and customer satisfaction levels increased.
Review Past Audit Results
Previous audit results will tell you which processes have performed poorly in the past. Poorly performing processes should be audited more frequently than processes that are doing well. That’s obvious.
Analyse the data being generated by your management system such as corrective actions, incidents, customer complaints, food safety problems, project debrief reports, lessons learnt, suggestions for improvement and customer feedback. Look for common causes and focus your audits on the relevant processes.
Most commonly, procedures and processes are audited once a year. This implies that all processes are equal but they aren’t. Good managers understand this. Good managers aren’t afraid of audits, they use them to:
• Identify key areas for improvement.
• Drive and measure process improvement.
• Identify and reduce risk.
• Strengthen internal controls.
So don’t cringe when you hear the word “audit”. Make the most of it.
All the best – Liz