Seven steps to prepare for an audit
In the context of the economy and business world, an audit is a process of conducting a thorough examination of a firm or organisation to learn about its unique features and ends. An audit is analogous to a medical exam where the results are used to discover problems, encourage changes, and gather objective information on the status of the organisation in order to make decisions.
It is important to understand that although organizations may also have their own audit department (internal audit) audits are often performed by an external third party (external audit). External sources provide more unbiased judgments since they are not subject to conflicts of interest.
It is possible to carry out assessments of all kinds through audit work based on comprehensive analysis and measurement criteria. An audit mainly aims to find characteristics of profitability or efficiency among the departments of an organisation.
The same applies to other conglomerates such as foundations, NGOs and even public institutions and administrations. Any organisation is susceptible to control and monitoring, whatever its mission or economic nature. The fact that there is an audit and valuation activity helps to ensure that companies or organisations do not fall into fiscal, legal or other irregularities.
At the same time, periodically auditing these companies is a point of continuous improvement of the work they carry out on a daily basis, locating weak points or other organisational aspects to be improved.
Every firm must invest continually in sustaining, developing, and altering its business operations in order to prosper. Project management acts as the intellectual framework as well as the execution method for managing and regulating the different investment efforts that appear to project. Different from an organisational audit, project auditing is a continuous procedure that begins during the execution stage of a project and continues until the project is completed. Its goal is to assess the project against success criteria and ensure that it stays successful while adhering to specified quality standards and objectives.
How to prepare for an audit
1. Plan ahead
Keep your records up to date to ensure that the auditing process goes as smoothly as possible. The planning stage may take some time, depending on the complexity of your organisation, so plan appropriately.
In general, you should try to keep your records up to date throughout the year so that you don’t have to play catch-up in the weeks leading up to your audit.
2. Draw up a timeline
Auditors frequently want specific evidence of particular deadlines. You must be clear on when these are and what you must have achieved as an organisation to ensure timely delivery of the necessary paperwork. Allow for adequate time for things to go wrong.
Furthermore, holding regular team meetings is typically a good idea to know where everyone is with their responsibilities.
3. Understand the standard
An audit is a report that compares your organisation’s performance to a standard, so take the time to study and comprehend the standard to which you will be compared. This is essential in understanding the auditors’ approach. Having general knowledge will allow you to manage the external audit more effectively. Furthermore, it will assist you in avoiding taking needless measures by touching on issues outside the audit’s scope.
4. Identify area experts
Your staff are the only ones who are familiar with your internal operations. Determine which of your staff has the best knowledge to assist the auditor in understanding and evaluating your business and information security procedures based on the standard you must comply with. Make sure you explain the significance of the forthcoming audit and demonstrate your comprehension of the standard so that the auditor may use their expertise and experience to prioritise activities for preparation.
5. Allocate resources
Experts and specialists in every field usually are engaged with their normal day-to-day activities. Auditing requires significant time, energy, and effort from your experts. Make sure necessary resources are available so your audit team can proceed with ease.
6. Determine procedures
Gather your area experts and go through internal audit processes relevant to the controls that will be examined during the upcoming audit. The goal is to identify any gaps where processes don’t exist or don’t sufficiently meet the standard you’ll be audited against. In other words, make sure that all the controls required by the standard are in place in your business and that corrective actions are taken where needed.
7. Prepare your paperwork
Having all internal procedures in place is a great starting point. Auditors, however, will ask for supporting materials as part of the audit process. They’ll want to see policy documents, financial statements, accounting records, and “process artefacts” (that is, evidence that your internal processes are working as intended).
Based on the business processes determined in the previous step, make a list of documents that demonstrate the current internal control structure and review these documents. This is another form of gap analysis to determine whether your documentation is accurate and complete.
In a next post we will focus on “Projects Audits” and what we should take into consideration to ensure that the project meets the standards of project management through investigation and evaluation.