A Proactive Risk Assessment Process Prepares You for an Audit

A Proactive Risk Assessment Process Prepares You for an Audit

Written by Risk Management Team on March 29, 2019

An audit is an inevitability. For the sake of your company and its employees, it’s best to prepare for an audit long before one occurs. Fortunately, there are several ways to get ready for an audit, so when the time comes, you won’t be blindsided by any surprises.

It all begins by instituting a thorough risk assessment process. Proactively assessing your company’s vulnerabilities such as gaps in procedures or insufficient record keeping will help you accomplish several things: understand how well you are meeting current standards, create an audit trail that proves compliance and prepare a strategy to make you audit-ready.

This blog explains how you can use a proactive risk assessment process to safeguard against audits.

Stay Up-to-date on Regulations and Compliance Standards

Do your homework. If you aren’t already, get up to speed on the industry regulations and compliance standards your company must adhere to. The standards you may be audited against are always being updated or expanded. Performing an annual review is the first step toward ensuring that when an audit comes, you haven’t lapsed in compliance. By remaining familiar with these standards, you’ll also prevent your company from taking any unnecessary actions when preparing for external audits.

Adopt a Regular Risk Assessment Process

With a risk assessment process in place to measure internal processes, you’ll be able to proactively assess how well employees understand and are complying with the most current regulations. The risk assessment process can be carried out regularly as you help your employees get up to speed on the rules and standards for which the company must comply. These assessments will also help you identify the steps that must be taken internally to not only meet compliance standards but to prepare for your next audit.

Collect Documentation

In preparation for an audit, be sure to have documentation prepared well in advance for external auditors. This documentation should be able to support your business processes and compliance efforts. It can include materials such as policy and procedure documentation, your financial records, incident reports and more. By frequently administering assessments, you’ll also be prepared with through, detailed records of your company’s efforts to identify and mitigate risks in compliance with current standards.

Knowing Your Subject Matter Experts

No one will know the internal processes of your company better than your subject matter experts (SMEs). By knowing what standards you must comply with and where your company needs to focus the most energy to prepare for an audit, you can identify the appropriate SMEs.

Your SMEs should be those employees in the best position to assist external auditors to gain an accurate understanding of the company’s internal structure and processes and evaluate them. Knowing who these individuals are beforehand will give them the time they need to review all relevant documentation and prepare to help external auditors. Once you’ve chosen them, provide them with your best understanding of the standards the company will be audited against and ensure that all supporting materials and documents are available to them. They can also help determine what documentation should be made available during the audit and what information will be irrelevant.

Continually Audit Yourself

Internally auditing your company can help you analyze current processes in place and ensure that they are effective and efficient. An internal audit can be in practice similar to your risk assessment process, but they more broadly examine the company – including its enterprise risk management (ERM) system. By responsibly evaluating the company, you’re better prepared for external audits in the future.

Shore Up Your Risk Assessment Process With TotalCompliance® Risk

With a comprehensive risk management software, risk assessments and audits can take place from the same centralized location. TotalCompliance Risk manages all of your assessments, audits, surveys and more in one automated system. You can easily shore up your risk assessment process from building consistent question sets to creating detailed reports and historical records.

Assessments can be fully customizable with multiple questions types: fill-in-the-blank, yes/no, rating scale and multiple choice. Conditional and weighted questions improve results. You also have the freedom to choose respondents based on your own unique requirements for each assessment. You can even choose to have assessments broken up over several individuals or groups to best leverage your experts.

Results can easily be tracked in real-time before assessments have even been officially submitted. You can analyze assessments, audits and surveys question by question to gain a highly-detailed understanding of the results. Data can also be exported for further analysis or presentations.

Make your auditing and risk assessment process run smoother with a risk management software. Request a demo and learn how TotalCompliance Risk can be a comprehensive, cost-effective solution for your company.

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