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How Preparing for Audits Can Optimize Operations

By June 7, 2016Article

How many times have you found yourself frantically cleaning the house just before visitors arrive? All evidence of your normal disorganized state is stacked in a back bedroom, only to dribble its way back into the main living area once your guests have departed. Preparing for audits often follows a similar trajectory. Internal auditors would certainly like to see some serious spring cleaning in their organizations, especially when it comes to information governance, risk management and compliance programs at their organizations. 

In today’s highly regulated business and industrial environments, the old “shove it in a closet” tactic just won’t fly. From healthcare to financial services, utilities to transportation, law firms to retail chains, almost every business must prove compliance with multiple layers of regulations (industry, state, federal and foreign) and standards (ISO, PCI, etc.). 

Increasingly, enterprises also must prove that they have diligently managed third parties including vendors, partners and service providers. Attempting to secure data privacy, identify and mitigate risks and prepare for audits at this scope and complexity using outdated, manual processes is akin to cleaning the White House with a broom and dustpan. 

Internal audit preparations often focus only on the most obvious components — highly visible processes or revenue-producing activities. But significant risks often lurk in the shadows, and a holistic approach to governance, risk management and compliance (GRC) will benefit every aspect of an organization. GRC software solutions enable integration and automation, tying together security and compliance programs on platforms that optimize workflow, provide centralized document and data frameworks, link internal controls and enhance collaborative efforts throughout the enterprise. 

When audit priorities revolve around strategic business objectives and regulatory requirements, using the traditional, time-consuming audit methods of spreadsheets, Word documents and email can significantly limit the audit scope. This can leave low-risk areas of the business unattended, which could escalate if left untouched for an extended period of time. Moreover, when audit and compliance activities are not streamlined, they pull resources away from core business processes, causing those processes to break down. 

By developing a comprehensive GRC program that incorporates audit at the front end, the business will experience a more streamlined, efficient and effective audit. They can not only do a better job of complying with data privacy and security regulations, but they can introduce greater efficiency and visibility to routine operations and processes, identify strengths to leverage and weaknesses to correct and reinforce a culture of accountability throughout an organization, including third parties.  

GRC platforms centralize documents and data related to risk and compliance, pulling critical information out of departmental silos so it can be revised, reviewed and reported on by all stakeholders, with version and access controls to protect data quality. The centralization of items required for audits significantly reduces the time spent hunting down and collecting documents, ensures that gaps in coverage are identified and fixed and provides a mechanism for collecting, sharing and tracking contributions and attestations from internal and external participants. 

Most companies face multiple audits and client assessments each year, which require repetitive compilation of data and documents from across the enterprise. An integrated compliance framework reduces duplicate effort, automates report compiling and ensures documents are up to date and easily searchable. Companies can quickly and confidently provide auditors with access to required materials, enabling deeper visibility into the processes and behind-the-scenes activities that prove a security or compliance program is in place and functioning as intended. 

GRC platforms streamline the effort of identifying auditable entities, conducting audit tasks and communicating audit findings by centralizing all audit activities in one accessible platform. Auditors can then prioritize issues based on severity, business priorities and impact to business priorities. Internal audit and compliance teams can map risks, policies and authoritative sources (laws, regulations and standards) to controls. 

Workflow streamlines audit activities by assigning tasks, scheduling follow-ups and tracking remediation efforts. Any audit findings can likewise be put into automated workflow to create, assign and document remediation tasks and response efforts. Streamlining the process of workpaper creation, evidence gathering and owner identification allows auditors more time to provide useful and in-depth recommendations, which, in turn, help make the organization run more smoothly. 

GRC platforms optimize and automate the management of intricacies and granular details that quickly get lost in manual compliance efforts. Capturing the bigger picture is just as essential, especially when bringing security and compliance into alignment with strategic business objectives and growth plans. Analytics capabilities in comprehensive GRC solutions make it possible to track against key performance and risk indicators, set benchmarks and identify trends. Contextualized reporting through role or user-specific dashboards helps stakeholders understand compliance as it relates to their role in the organization. 

Generally, we enjoy audit preparations as much as we like to scrub down the bathroom. GRC solutions can optimize the process while making your business more proactive and resilient. It’s reassuring to know you’re always ready for unexpected guests — and auditors. When you have your “house” in order, routine operations run more smoothly. The time and resources saved scrambling to respond to audits and shifting standards can be applied to growth and innovation instead. 

Sam Abadir is the director of product management at LockPath, a leading provider of governance, risk management and compliance (GRC) solutions.





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