Benefits of Continuous Audit and Risk Assessment

Benefits of Continuous Audit and Risk Assessment

Written by Risk Management Team on January 20, 2020

Audit and risk assessment procedures are intended to help you understand the risks lurking in your environment, both internally and externally. A strong, well-designed risk audit program will be able to identify critical business processes, identify risks to these processes, determine their significance, evaluate risk mitigation strategies and recommend a plan of action moving forward. One shortfall of typical auditing methods is their time constraints, though.

Typical auditing practices based on risk are usually undertaken months after activities have occurred, making their value debatable in terms of regulatory compliance or aiding in business activities. The project could have ended. There could have already been an accident as a result of unidentified hazard. Reviewing past procedures and processes has a positive impact on future activities, of course, and you shouldn’t halt these practices. However, continuous auditing methods will help you have a more immediate response to risks facing your business.

Continuous Auditing

Continuous auditing emphasizes day-to-day awareness, helping you to identify and immediately respond to risks and hazards. This practice is intended to allow you to analyze risk on a more frequent, ongoing basis and provides you with much more data throughout the year than your periodic risk audits that may happen quarterly, biannually or annually.

Continuous auditing is often used to address risks related to accounting and financial systems, but this method of continually tracking risks in your environment can be adopted for many situations. Continual audit and risk assessment procedures require a framework of processes and technology to be successful.

In order to undertake the breadth of assessments and analyses necessary for the data you gather through ongoing auditing to be helpful, you need some kind of audit management software capable of handling the process. The manual assessment and auditing procedures that risk managers typically follow are time-consuming under normal circumstances, but they’ll be incredibly difficult to maintain under a strategy of continuous auditing.

In fact, audit management software helps you address the challenges and complexities of continuous auditing in several key ways.

Implement and Maintain a Strong Framework

The model of continuous auditing can be difficult to develop, requiring unique skill sets and resources. Even after developing a model that works for your business operations, formal training will be necessary to make sure hazards and risks are correctly identified and prioritized.

The process of ongoing auditing requires a steady cyclical routine. This is where technology can bring you huge benefits. You need to be able to identify the high priority areas of your operation, determine the rules for continuous auditing, determine the process frequency, configure parameters and execute the audit, manage and analyze results, follow up on any flagged areas, report the results and lastly, identify and assess any emerging risks that will be added to future audit and risk assessment procedures.

Audit management software automates and streamlines this process, allowing you to move at a much faster pace than you would otherwise be able to. Configure your assessments, including question sets, assessors, frequency, thresholds, reports, etc. Quickly gather and analyze data on activities while they’re still occurring and identify risks that currently exist and could affect your business.

Perform a Greater Number of Audits

Companies must assess the effectiveness risk controls and practices on an ongoing basis, especially when it comes to new procedures, inspections, maintenance systems, health and safety protocols, permits and certifications and a host of other ever-present worksite needs. Continuous auditing calls for a much larger number of audits be performed than traditional auditing procedures, and performing these manually with a spreadsheet will very easily become an overwhelming prospect. You’ll barely be finished collecting results from the previous round of auditing before you will find the process repeating itself.

With an auditing software to manage your audit and risk assessment program, you’ll have the flexibility to conduct assessments at a frequency that best aligns with your business goals and objectives, whether that’s ensuring the safety of personnel around new machinery or the compliance of your internal control structure with federal regulations.

You’ll also be able to expand the process and methodology of ongoing audits to other areas of operation with the help of an audit software. Management of the process can be much more hands-off, running in regular intervals as needed. Analyzing results and identifying risks, which can easily be the most demanding part of the process, becomes straightforward with all the data organized and laid out before you. With a clearer picture of your current risk landscape, you’ll be able to better orient your periodic risk audits to focus on priority areas that require a deeper analysis.

Expand Your Risk Management Program

Through the adaptation of audit management software, expand your auditing program, not just with more frequent assessments and ongoing risk monitoring but with an expansion in the kinds of audits you can perform. Continuous auditing will allow you to increase your internal audit coverage by improving management’s risk-related knowledge of business operations as more data is collected, analyzed and reported.

From this more rigorous strategy, you’ll be able to more continuously identify risks and hazards and feed this information back into your more target risk assessments. For instance, this data can be used to conduct a more detailed study for the development of a risk mitigation strategy for the more significant risks. You could also use this data to identify baseline risks that affect the whole organization or project and develop risk profiles for each.

A good software is ideally malleable to the procedures that make up your risk management process. With more data at your fingertips, you’re able to find more effective ways to analyze risk and evaluate solutions, and the combination of continuous auditing and analytical tools will help you get there.

Remaster Your Audit and Risk Assessment Strategy

Audit management software enables you to streamline data collection, audit and risk assessment creation, distribution frequency, risk evaluation and reporting. You’ll no longer need to rely on risk identification months after the fact – with the ability to conduct ongoing risk audits, your risk management process has more power than ever.

A product such as TotalCompliance Risk from ComplianceBridge brings all of your audit procedures and processes into one, cloud-based location. Save time, become more organized and improve your analysis for every audit. You’ll be able to easily collaborate, build question sets, manage respondents, analyze results and report on data in real-time.

Use a variety of question types: multiple choice, rating scale, yes/no and fill-in questions. Create conditional questions and weight questions for a better quantitative analysis. Reminders and notifications will keep the process moving smoothly along. View results as they come in, and review a complete historical record of your auditing efforts at any time.

Audit management software provides your company with many advantages, especially where the practice of continuous auditing is concerned. To request a demo of our risk audit management software and see how it works for yourself, contact ComplianceBridge today.

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