External and internal audits generate better insight into your data security, yet most employees flee from the process. Audits are cumbersome, time-consuming, and often feel peripheral to most people’s daily workload.
Yet, several benefits of internal auditing make it a critical component of the long-term sustainability of your organization. However, mastering an efficient workflow for your audit management process, including risk-based internal audits, can make a significant difference.
While it won’t make an internal audit for compliance management more fun, an effective workflow can streamline the audit process and create a rapid turnaround that saves you money and employee time. That’s what we’ll share with you today.
What is audit management?
Audit management is a blend of your audit workflows executed systematically to conduct different audits for your organization. As your organization grows, auditing your activities can get increasingly complex. As a result, you must be able to organize time, effort, and resources for your audit activities to complete and remedial actions assigned promptly to the right owners.
Most enterprise organizations today employ audit management solutions to organize their audit workflows to ease the burden on their workforce, depending on the type of audit – let’s understand what those types are.
Why is audit management important?
In today’s business environment, audit management is a cornerstone for organizations. It ensures compliance, reduces risks, and optimizes operations. Here are some key reasons why audit management is important:
- Compliance Assurance: Audit management ensures adherence to regulatory requirements and industry standards. It streamlines compliance processes, reducing the risk of costly violations, which is especially vital in regulated sectors where non-compliance can have severe financial and reputational consequences.
- Risk Mitigation: Audit management identifies and mitigates risks through systematic assessment and monitoring. It provides real-time visibility into potential issues, enabling proactive measures to address weaknesses in processes and controls. This fosters a culture of continuous improvement and safeguards the organization’s assets and reputation.
- Operational Efficiency: Enhances operational efficiency by automating processes and offering real-time insights through dashboards. It minimizes manual efforts, optimizes resource allocation, and ensures cost savings and increased productivity, crucial for businesses in regulated and competitive environments.
Types of audits
There are three types of audit activities, depending on the standards and regulations an organization is expected to comply with. These audits could be performed by internal audit functions or by external auditors, especially when it comes to certifying an organization against internally accepted standards like the International Organization for Standardization (ISO).
- Internal Audits (First-Party Audits): These audits are conducted internally to assess an organization’s adherence to its standards and policies, improving efficiency and internal controls.
- Supplier/Partner/Second-Party Audits: Organizations perform these audits on external parties to ensure compliance with agreed-upon standards and contractual obligations.
- Third-Party/Certification Audits: Independent auditors or certification bodies conduct these audits to certify an organization’s compliance with industry or international standards, enhancing credibility and trust with stakeholders.
We wrote in detail about each type of audit described above in our detailed description of different ISO audit types. Depending on the audit type your organization is expected to perform, there is an established internal audit process to follow, which might look like the steps described below.
Overview: Internal audit processes
What are the 4 phases of an audit?
There are four phases of the internal audit:
- Follow Up
These phases can be broken down into smaller steps, which we’ll cover in the next section.
What is the audit process step by step?
The internal audit process consists of the four phases of an audit program, broken down into several stages. Each stage requires communication among all the relevant parties, including the auditor, senior management, IT department, and other relevant stakeholders.
Step 1: Planning
Creating an audit plan requires the internal auditor to set the scope and objectives and establish an initial time frame. Additionally, the planning phase can include scheduling an initial meeting with your audit team or requesting documentation.
Step 2: Document Review
Next, your internal auditor will review policies, procedures, and established controls. Document review ensures that your written plans align with standards and regulations.
For example, if you must be Health Insurance Portability and Accountability Act (HIPAA) compliant, you must have role-based access rights as a security measure. It isn’t compliant if you haven’t established these as part of the written program.
Step 3: Field Work
During this stage, the auditor comes to your place of business to see if your actions align with your written policies and procedures.
To follow the access rights example, your organization must follow your written policies. If an employee changes roles within your organization, you must appropriately adjust the access rights.
Fieldwork also incorporates meeting with staff and engaging with the day-to-day business activities to assure appropriate compliance with standards, regulations, and organizational documents.
Step 4: Follow-Up
Your auditor will often find missing documentation or have follow-up questions before finishing a report. For example, if they still needed an access rights review report, the auditor would request it now.
If the auditor didn’t understand an employee’s answer when comparing it to the internal procedures, they might also request clarification. Most auditors will clear up confusion before submitting findings.
Step 5: Reporting
This is the stage most people dread. Once your auditor reviews all the information presented and completes the testing, the auditor will issue a draft report. The draft report incorporates audit results.
This will include their independent evaluation of your program’s strengths, a detailed listing of weaknesses, and recommendations for a corrective action plan.
The internal auditor will send you the draft report, allow you to review it, and give management time to respond to any findings. At this point, you might send additional documentation to remove results before the auditor issues the final report. After all that back-and-forth happens, the auditor issues the final report.
Step 6: Issue Tracking
If your audit report issued findings, you need to track those audit findings, implement the proper internal controls to mitigate the issue, and prove you took corrective action with a written response.
For example, if you missed an access rights review, you need to show that you have an action plan to ensure timely and accurate reviews. You will also need to pay close attention to any issues found in previous audits to ensure corrective action is still in place for them.
Is it simple enough? So why do organizations need help with making audits a priority?
There are several reasons. Chief among them include an audit’s time-consuming nature, which makes it a drain on resources. Let’s explore that and some ways to overcome this challenge.
What makes the audit process time-consuming?
Whether you’re working with your internal auditors or an external audit committee, documentation and communication drive the audit process. Before the audit begins, your auditor requests work papers and other documentation per their audit checklist.
During the audit, your auditor needs to communicate with your staff. After the audit, your auditor needs a follow-up meeting with senior management to provide the report and discuss findings.
Scheduling meetings, finding responsible parties, and tracking documentation takes longer than you realize. If people have scheduling conflicts, then meetings get postponed. If responsible parties don’t respond to audit requests, the audit can’t begin.
Why is streamlining audit management important?
One word: money.
You’re paying for the audit, whether engaging an outside firm or using internal staff.
An external audit firm may bill hourly. Therefore, time spent tracking down your employees costs you money. Moreover, the longer it takes employees to respond to requests, the more time your auditor needs to spend reviewing the reason for the request.
If you have an internal audit department, communication lags still cost you money. Your internal audit department does more than mark checkboxes on lists. If your audit department is completing audits efficiently, it can only do some of the work it needs. This drives up the cost of the audit itself.
Moreover, some regulatory requirements (like a sustainability or ESG audit) specify a period during which you must complete an audit. If your audit takes longer than expected, you may need to comply more with the timing.
How creating an audit workflow eases communications
Creating audit workflows can enhance communications and shorten the audit’s length. Workflows allow you to assign roles and monitor progress through each stage of the audit process.
Once everyone involved has an assigned role, you can more easily communicate with one another to obtain documentation and keep the audit on track.
How automating audit workflows streamlines the process
Organizations increasingly use workflow automation tools to streamline communications and task management. The most time-consuming part of the audit process is connecting with your team and managing documentation sharing.
With a workflow management tool, you can delegate work to the responsible parties and track their progress. A powerful compliance dashboard will give you visibility into the work completed and what remains outstanding.
Emails often need to be addressed in overflowing inboxes. Calendar alerts can be ignored. If a team member misses a deadline, you must send emails reminding that person. Automating these tasks with a workflow tool saves you time by organizing the tracking.
Streamline audit workflows with ZenGRC
The risk assessment process, including internal auditing, can significantly strain your organization.
ZenGRC offers workflow tagging so you can delegate your audit project tasks and monitor their progress and completion. Moreover, it allows you to prioritize tasks so that your key personnel know how to plan their audit work efficiently.
Furthermore, ZenGRC simplifies all your compliance auditing needs by centralizing your requirements. This helps eliminate duplicate tasks by mapping controls to multiple frameworks and providing templates for various types of audits to help you work as efficiently as possible.
For more information on how ZenGRC’s audit management workflows can streamline your process, contact us for a demo.