Discover the Key to Business Success: Internal Audits
By Jackie Stapleton
The Power of Internal Audits
In the dynamic world of business, staying on top of your game is crucial. That’s why conducting internal audits is a game-changer for your business. These audits provide a comprehensive understanding of how well your procedures are being followed, uncovering areas for improvement that could transform your operations.
Picture this: Your dedicated workforce, unknowingly altering processes as they go about their daily tasks. It happens more often than you think. But don’t stress! By conducting regular internal audits, you’ll proactively identify any changes and have the power to update your processes, systems, and overall workflow accordingly.
Why is this important? By pinpointing nonconformances and recognizing improvement opportunities, you demonstrate your commitment to continual growth and excellence. Without these audits, you might find yourself caught off guard by customer complaints and failing to meet their requirements—a reactive nightmare that no business owner wants to face.
No matter how big or small your business, internal audits are the key to continual improvement.
In fact, the smallest business I have worked with, which was the owner himself (and that was it), conducted internal audits. When I first branched off to work for myself in 2010, I worked with a one-man business in remote NSW. Jim had his own aerospace consultancy, and a requirement was to be certified to ISO 9001. The challenge when we got to the requirements of Internal Audits, was that these internal audits were to be impartial and objective. How were we going to do this when there was one person in the business and the location of the owner was remote?
We came up with a solution. This is what we did.
- Internal Audit procedure – documented that due to the remote nature of the location of the business, Jim was responsible for conducting the internal audits.
- Internal Audit training – Jim completed Internal Auditor training to demonstrate his qualifications in conducting the internal audits.
- Internal Audit programme – Jim created an annual internal audit programme based on risk and covering all activities of the business.
- Internal Audit findings – Jim conducted the internal audits as per the programme.
The ‘winning’ result of this process was that Jim was able to demonstrate his impartiality and objectivity as he actually identified nonconformances and improvement opportunities and recorded these in his Internal Audit Reports with the Corrective Actions also documented in the Register. I was still nervous as to what the Certification Body would consider in the Certification Audit. I felt we had covered ourselves well with the explanation of why, who and how the audits were conducted as well as the objective evidence in the results of the internal audits. I waited with bated breath for the certification audit to conclude and finally, I received a phone call from Jim to say that the system had passed!
In 2010, EY commissioned Forbes Insights to conduct a global survey about the evolving role of Internal Audit. In the survey, 96% of respondents indicate that their internal Audit function has an important role to play in their overall risk management efforts. And yet, 74% believe that there is room for improvement. Taking this into consideration, Internal Audits have the opportunity to move quickly in driving competitive value across all organizations.
Conducting an internal audit is like a professional athlete reviewing game footage to improve their performance. Just as a skilled athlete will study video recordings of their past games to identify areas for improvement, a person can conduct a self-assessment to evaluate their strengths and weaknesses and identify areas where they can grow and develop.
Like an athlete, a person may need to make adjustments to their strategy, hone their skills, or seek advice and coaching from others to reach their full potential. By taking the time to assess their performance and set goals for improvement, a person can become a more effective and successful player in their personal or professional life.
We can now understand that conducting internal audits and the resulting corrective actions involves going beyond temporary fixes and addressing the root cause to prevent future failures or issues within the organization’s processes or systems.
Association of Internal Audits with Business Focus and Growth
Level 1 Customer complaint responses – occupies the bottom focus on the scale, representing a mindset or approach that primarily responds to situations or challenges after they have already occurred. It is characterized by a tendency to address issues as they arise, without significant proactive planning or preventative measures. Reactive responses typically involve dealing with problems as they become apparent, employing corrective actions to mitigate their impact or resolve immediate issues. While reactive measures are sometimes necessary, relying solely on reactive approaches can limit opportunities for improvement, innovation, and long-term success. A reactive focus may result in addressing problems as they emerge rather than proactively working to prevent them, potentially leading to inefficiencies, delays, and missed opportunities for growth. This category refers to business areas that are experiencing a downturn or a decline in performance. They require strategic interventions to reverse the decline and regain stability. They may be facing challenges such as decreasing revenues, market share erosion, or outdated business models.
Level 2 Worker Operation – this focus point involves addressing immediate issues and finding solutions to resolve problems as they arise. Remediation focuses on reactive actions taken to mitigate the impact of nonconformances. While it is not as proactive as prevention, it emphasizes learning from reactive situations and implementing measures to prevent similar issues from occurring in the future. This level represents business areas that are undergoing changes or undergoing a shift in their trajectory. They may be transitioning from a decline to growth or from growth to decline. These areas require strategic adjustments and may have uncertain outcomes.
Level 3 Management spot checks – involves management identifying opportunities for efficiency, effectiveness, and productivity improvements. This focus point emphasizes reviewing and enhancing existing processes, systems, and practices to achieve better outcomes. It encourages the evaluation of current practices, the exploration of new methods, and the implementation of innovative approaches to optimize performance. However, it is being ‘enforced’ upon the workers as there is no involvement of other team members and workers feel obligated to take action otherwise, they might lose their job. Normally the business will be neither experiencing significant growth nor decline. They are holding steady and maintaining a consistent performance without major fluctuations. While they may not be growing rapidly, they are also not declining.
Level 4 Reactive internal audits – emphasizes being proactive rather than reactive by anticipating potential challenges and developing strategies to prevent or minimize their impact. This focus point involves having in place ‘some’ level of internal audits, however they are not risk-based so are still reactive or just conducted to tick off a few boxes on a checklist. This represents business areas that have significant potential for growth and development but may not be at their peak yet. They are showing positive signs and have the potential to generate higher returns in the future.
Level 5 Internal audit programme – a mindset dedicated to consistently advancing processes, practices, and outcomes. It emphasizes an unwavering commitment to ongoing learning, innovation, and refinement. Individuals and organizations that prioritize continual improvement embrace a growth-oriented perspective, actively seeking feedback, analyzing data, and implementing changes to optimize performance and achieve superior results. This focus fosters a culture of adaptability, agility, and relentless pursuit of excellence, driving continuous progress and development. This represents business areas that are experiencing significant expansion and positive development. They exhibit strong upward trends and have a high potential for generating increased profits, market share, and overall success.
Your Next Steps to Success
- Develop an internal audit programme based on risk
- Implement the conduct of internal audits as per the programme
- Engage an Expert to support you through this process.
17 Comments
Psychic Parties
Hey this is somewhat of off topic but I was wondering if blogs use WYSIWYG editors or if you have to manually code with HTML. I’m starting a blog soon but have no coding expertise so I wanted to get guidance from someone with experience. Any help would be enormously appreciated!
stripper near me
Wonderful beat ! I wish to apprentice while you amend your site, how could i subscribe for a blog website? The account aided me a acceptable deal. I had been tiny bit acquainted of this your broadcast offered bright clear idea
strippers houston
Hello would you mind stating which blog platform you’re using? I’m going to start my own blog in the near future but I’m having a tough time selecting between BlogEngine/Wordpress/B2evolution and Drupal. The reason I ask is because your design seems different then most blogs and I’m looking for something unique. P.S Sorry for being off-topic but I had to ask!
stripper near me
I do agree with all the ideas you’ve presented in your post. They’re really convincing and will certainly work. Still, the posts are very short for starters. Could you please extend them a little from next time? Thanks for the post.
local strippers
Hi there, i read your blog from time to time and i own a similar one and i was just wondering if you get a lot of spam comments? If so how do you reduce it, any plugin or anything you can advise? I get so much lately it’s driving me crazy so any support is very much appreciated.
what is registered iso of a bank
Today, I went to the beach with my kids. I found a sea shell and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She placed the shell to her ear and screamed. There was a hermit crab inside and it pinched her ear. She never wants to go back! LoL I know this is entirely off topic but I had to tell someone!
merchant services ISO agent program
You could certainly see your enthusiasm within the paintings you write. The sector hopes for even more passionate writers such as you who aren’t afraid to say how they believe. At all times go after your heart.
best ISO agent program
Do you mind if I quote a few of your posts as long as I provide credit and sources back to your site? My website is in the exact same niche as yours and my users would definitely benefit from some of the information you provide here. Please let me know if this ok with you. Cheers!
merchant services iso agent
Your place is valueble for me. Thanks!?
start a merchant processing company
You made some first rate points there. I appeared on the internet for the issue and found most individuals will go along with with your website.
selling merchant services
Hmm is anyone else experiencing problems with the pictures on this blog loading? I’m trying to find out if its a problem on my end or if it’s the blog. Any responses would be greatly appreciated.
promotional gift bags
Does your site have a contact page? I’m having a tough time locating it but, I’d like to shoot you an e-mail. I’ve got some creative ideas for your blog you might be interested in hearing. Either way, great site and I look forward to seeing it develop over time.
zoritoler imol
Some truly interesting information, well written and broadly user genial.
gift bags
Hiya, I’m really glad I have found this information. Nowadays bloggers publish only about gossips and web and this is actually annoying. A good web site with interesting content, this is what I need. Thanks for keeping this web-site, I’ll be visiting it. Do you do newsletters? Cant find it.
fresno strippers
Nice read, I just passed this onto a friend who was doing some research on that. And he just bought me lunch because I found it for him smile Thus let me rephrase that: Thank you for lunch!
boston strippers
Thanks for discussing your ideas here. The other matter is that whenever a problem comes up with a pc motherboard, people should not take the risk of repairing this themselves because if it is not done correctly it can lead to irreparable damage to an entire laptop. It is almost always safe to approach the dealer of any laptop for the repair of motherboard. They’ve technicians who may have an competence in dealing with mobile computer motherboard difficulties and can make right analysis and conduct repairs.
selling credit card processing
Greetings! I know this is kinda off topic but I was wondering which blog platform are you using for this site? I’m getting sick and tired of WordPress because I’ve had problems with hackers and I’m looking at options for another platform. I would be great if you could point me in the direction of a good platform.