What Makes a High-Quality Risk Assessment Audit | ComplianceBridge

What Makes a High-Quality Risk Assessment Audit

Written by Risk Management Team on August 10, 2022

Every organization needs to complete a risk assessment audit from time to time in order to ensure that it’s keeping its operations in check, that all potential risks and hazards are being identified and mitigated, and that the organization is as safe as possible for the people who are working within it. However, not all risk assessment audits are created equal. There are certain characteristics and procedures that will result in a more useful assessment. Once you understand and fully implement these characteristics into your own risk assessment audit practices, you’ll see improvements across the board, from time management to data integrity. 

What Makes a Risk Assessment Audit Successful?

The goal of a risk assessment is to give the decision-makers in your organization the information they need to handle the risks associated with their products, processes, and operations. Each stage of the assessment process – from inception to reporting – should be orchestrated with that goal in mind. Below, we’ll go stage by stage and discuss what makes a risk assessment audit successful and which characteristics further that end. 

Scoping and Planning

The most important aspect of a high-quality risk assessment audit is being fit-for-purpose. What this means is that the assessment clearly addresses the problems and questions at hand and considers the options or boundaries for which decisions need to be made. Before an assessment is initiated, problem formulation, planning, and scoping must occur. This will help ensure that your assessment is effective.

To begin scoping and planning your audit, answer these questions:

  • What is the overall purpose and scope of the assessment?
  • What assessment products are needed to inform decision-making?
  • What are the resources required?
  • Who will be the authors of the risk?
  • What will their roles be?
  • What is the timetable?

By answering these questions, you will have a good base of knowledge to begin planning your audit.

However, these questions alone aren’t enough to ensure that your audit will be fit-for-purpose. Risk assessment relies on establishing a good problem definition. To do this, you should involve your stakeholders and key participants. An assessment can be more effective when stakeholders identify issues, data, and alternative approaches. 

Transparency is important in all cases, and all selected approaches should be fully documented and communicated to all team members. 

Documenting Procedures

Once the problem-formulation phase is completed, you must outline how risks will be evaluated and how this data will be collected. 

First, who is assessing the risks? Identifying the key people involved in the risk assessment audit is the first step to determining what kind of data is being collected and how. The second thing you’ll want to ask yourself is how you assess risk. You’ll want to evaluate each risk based on a multitude of parameters including likelihood, severity, and possible consequences. Each one will require you to ask different questions and collect different data.

Finally, are you using qualitative or quantitative analysis? Your decision determines the nature of the data collected. If you’re performing a qualitative assessment, then you’ll want to seek insights from a subject matter expert along with gathering information and anecdotes. Conversely, if you’re performing a quantitative assessment, then you’ll be looking for numbers and statistics that can measure performance. 

Risk Identification

Risk identification is the process of documenting any risks that could keep an organization or program from reaching its objective. There isn’t any one right way to identify risk. Instead, it is a good idea to combine various techniques. Here are a few that have proven successful for many businesses.

Begin with brainstorming: By brainstorming, a team gets to think about ideas, discuss facts and imagine future states. Team members may have a better understanding of operations from the ground level and can share their own perspectives of risks, allowing them to talk and practice their critical thinking skills. Several techniques can be used to brainstorm effectively: nominal group technique (NGT), creating an affinity diagram, and more.

Review requirements: Requirements reviews allow the team to address risks quickly. Often,

a change in requirements may also alter the risks involved, making it vital to review them periodically. 

Conduct preliminary interviews: You may gain a deeper understanding of what your stakeholders believe are the biggest risks by interviewing them. Stakeholders often have invested significant resources, whether it be time, money, or labor, and they provide a unique perspective not shared by other team members. 

Perform a SWOT or root cause analysis: A SWOT analysis is a common tool business owners use to assess their company’s strengths, weaknesses, opportunities, and threats. This information can be helpful when making decisions about risk management. A root cause analysis is another tool that can be used to identify the underlying causes of problems or issues. By understanding the root cause of an issue, you can better assess its likelihood, severity, and more.

No matter how you structure the risk identification process, it’s important to keep in mind that there is more than one way to identify risks. Relying on a singular method alone may mean you overlook threats that result in preventable disasters in the future.

Application & Reporting

A good risk assessment audit will be tailored to the specific needs of the organization, which is exactly what the previous stages were designed to do. All the leg work done up to this point helps you administer your assessment, collect responses, and analyze findings as straightforwardly as possible. By this point, you should know exactly who you are engaging with to complete your assessment, what information you’re seeking, and what your evaluating criteria are for analyzing the data you collect. Therefore, your goal during this phase is to avoid deviating from the set course. 

Ensure the problem remains top of mind as you begin to carefully consider assessment responses and data. To help keep the process on track, make organization a priority. By centralizing and streamlining data collection and analysis, you can protect yourself from falling victim to behaviors that tend to derail the process, such as manually reviewing large volumes of data or parsing through irrelevant information. Ultimately, the report should include conclusions, recommendations, and an analysis of the risks faced by the company based on its policies and procedures. Creating a concise report requires a strategic analysis. 

Make Risk Assessment Audits Simple with ComplianceBridge

Managing your organization’s risk shouldn’t be difficult. That’s why our system is designed to make it easy for you to create risk assessments, distribute them to the people who need them, and collect their responses. ComplianceBridge allows you to create assessments quickly using multiple choice, short answer, fill-in-the-blank, yes/no, and risk rating questions. As well as weighting your questions, you can also introduce conditional and follow-up questions. This makes it possible for you to leverage your experts and get the information you need from them in a way that is both efficient and effective.

To help you make informed decisions about potential risks, our system even allows you to monitor all results as they come in so that you can see progress at any time day or night. Analyzing these results in detail can provide you with very targeted information about potential risks.To learn how ComplianceBridge can help you analyze and respond to risk, request a demo today!

Watch a 2 Minute Demo of ComplianceBridge

Find out more about ComplianceBridge’s Policy & Procedure Software, as well as its Risk Management Software by watching a two-minute demo.

Watch Demo Now