Re-Imagine Audit

By Maria DiBari, M.S. & Alonso Diaz

As organizations attempt to apply auditing processes and principles, many become frustrated due to initial misunderstandings on what a Quality audit is. ??This contributes to a lack of audit readiness often leading to delay in business or exposure of unnecessary scenarios that prevent business from moving forward.? ??Re-imagine audit takes a different approach in understanding on how businesses should invest time and resources to support it to accomplish the key objectives allowing business to proceed.

Discover and understand the Business Playing Field

The business playing field of an audit refers to the broader context in which auditing services are conducted within the business world. Audits play a crucial role in maintaining transparency, accountability, and trust in various business processes.? The playing field refers to the scope, objectives, and key components involved in the auditing process for the business. The auditing is to be a systematic examination and evaluation of the quality controls, records, processes, systems, or other aspects of the quality management system with the organization that provides an independent and objective assessment of the company’s products and services. ??

Understand and define what the purpose and scope of the of the audit being conducted in relationship to the business. What is the depth of analysis and what are the contractual agreements specifying?? Understand how the contract helps fulfill the customer requirements. ?Contact the auditor or organization seeking to audit and establish an early relationship to ensure the parameters of the audit are defined within amount of resource and work required.

Understand Requirements

For an audit to have meaning it must be unbiased and objective.? Understanding the requirements in auditing is essential for ensuring the integrity, quality, and credibility of the audit process. Understanding requirements helps auditors perform their work effectively, maintain independence and objectivity, and contribute to the overall trust and confidence in the audit reporting and corporate governance. It also sets the stage for the rules that are to be used and played out during the audit.? A review of organizational documentation including policies and procedures against expected process outcomes is a starting point.? It usually also involves the review of regulatory compliance, industrial standards, specified requirements such as Electronic Records and Electronic Signatures, and areas such as privacy and security.??

Planning & Execution

Planning and execution are integral to the audit process as they lay the foundation for a well-structured, organized, and effective audit. Proper planning allows auditors to focus their efforts where they matter most, while execution involves the actual gathering of evidence and evaluation of the organization's financial statements, controls, and operations. Together, these phases help auditors provide an independent and objective assessment of the subject matter being audited.

The preparation of individuals and subject matter experts who will be interviewed or asked questions about the processes is crucial.? This will serve as the backbone of audit success.? The subject matter experts should be very aware of the audit scope and able to define the process limits and ability provide the necessary data (historical) to show process capabilities. Auditors will usually require a sampling plan if large about of data is needed within the allowed time.

Execution is the phase where auditors perform the planned audit procedures to gather evidence. This evidence includes examining quality records, conducting interviews, testing internal controls, and more. It forms the basis for the auditor's conclusions. Auditors test and evaluate the effectiveness of internal controls within the organization. They examine transactions and processes for red flags and unusual patterns that may indicate fraudulent activity.

Virtual Audit Preparation

Virtual audit preparation is indeed important, especially in today's digital age where remote work and technology-driven processes have become more prevalent. Whether an audit is conducted in person or virtually, thorough preparation is essential to ensure a smooth and effective audit process.?? Proper planning, data accessibility, security measures, and effective communication are essential components of virtual audit readiness. Virtual audits rely heavily on technology for communication, data sharing, and document access. Proper preparation involves ensuring that all necessary technology tools and platforms are in place and tested before the audit begins.? Ensuring that auditors have access to the required data and documents is crucial. ?Listing and organizing folders or files such as CAPAs, defects, improvements, process diagrams, validation records, flow charts, SOPs, architectural diagrams, etc. should be vetted and presented in a logical and easy to follow manner. Ensure you have a contingency plan if your virtual audits have technological challenges or accessibility.? This would usually have one or more alternate ways of hosting or presenting information such as alternate meeting platforms or shared drive.

Early Auditor Engagement

Early auditor engagement, also known as proactive or preliminary engagement, is indeed important in the audit process. This practice involves auditors getting involved with the client organization well before the formal audit begins. It is crucial to understand clients’ business and allows auditors to gain a deeper understanding of the business operations, industry, and specific risks. This knowledge helps auditors tailor their audit procedures and focus on areas of higher risk and importance.? It provides a head start in the audit planning process helps in preparing the necessary data and documentation well in advance of the audit. Early engagement allows auditors to communicate their data requirements to the client, ensuring that the audit process is more efficient and less disruptive.? Proactive engagement allows auditors to communicate their audit approach, timeline, and expectations to the client. This helps manage client expectations and ensures a smoother audit process.

Announce and Schedule

Announcing and scheduling an audit is an important step in the audit process, whether it's an internal audit within your organization or an external audit conducted by an independent auditing firm. Proper communication and planning are essential to ensure that the audit is conducted smoothly and efficiently.? Involving and enabling subject matter experts (SMEs) in an audit is essential for ensuring the accuracy, comprehensiveness, and effectiveness of the audit process. SMEs possess specialized knowledge and insights about specific areas, processes, or functions within an organization, making their contributions valuable. Ensure their time is scheduled and important meeting are confirmed before auditor engagement. ?Obtain commitments and presentation material ahead of time to ensure it is vetted.? Their specialized knowledge and insights help auditors better understand and evaluate specific areas of the organization, ultimately leading to more reliable audit conclusions and recommendations.

Summary?

In summary, the business playing field of an audit encompasses a wide range of activities and considerations that are essential for ensuring the integrity, compliance, and overall health of a business. Audits contribute to transparency, accountability, and the overall trustworthiness of business operations, which are critical factors in maintaining investor and stakeholder confidence.

Re-imagining audit involves envisioning a future where auditing processes and practices are more innovative, efficient, and effective in addressing the evolving needs and challenges of businesses and stakeholders. Re-imagining audit involves embracing technological advancements, expanding the scope of assurance services, and adapting to the changing business landscape. Harnessing data analytics, artificial intelligence, block chain, collaborative audit platforms, or remote auditing will enhance transparency and communication.? The future of audit will likely be characterized by increased automation, data-driven insights, and a stronger focus on risk management and sustainability.

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