Why your organisational risk is increased by not conducting biennial compliance audits
I recently wrote a blog post, from the perspective of someone that has worked in many different roles and organisations within the compliance industry, that reflected upon what I believe to be the greatest weakness of modern compliance departments. My answer to this question was a poor execution or a lack of any auditing of the organisation’s compliance programmes, and you can read my explanation HERE. It is my fundamental belief that organisations must have some oversight in order to identify issues in their programmes and reduce risk. This belief has guided my decision to steer my organisation, ETHIC Intelligence, towards adding auditing services to its portfolio of offerings. Not only do I believe that performing external compliance audits would be beneficial, I also believe that organisations should be performing them at regular two year intervals to ensure the continued success of their programme.
How external audits occurring at regular intervals would benefit your organisation
When implementing a compliance programme, how would an organisation know if anything was wrong with the programme they drafted and put into place? This is the key concept behind the need to perform audits. Though your organisation could attempt to perform this audit internally, team members that are specialised enough in compliance to perform the audit are probably the ones that built the programme. Therefore, not only do audits need to be conducted, but they should be done through an external third party to ensure impartiality of the findings. Compliance teams are then able to correct any non-conformities that are found, improving the programme.
What if, after an initial external audit, your organisation was to bring a new partner on board or some type of restructuring occurred which created risks that your original compliance programme did not account for? Performing these external audits at a regular interval is necessary because businesses are ever changing and evolving, and their compliance programme needs to be doing the same. While your compliance team might be filled with a group of experts that are constantly making the necessary changes to your programme’s policies, we can still revert to the first point that it is always beneficial to double check one’s work (particularly by an impartial party). Performing a compliance audit at regular intervals will not only result in an improved programme, but one that is continuously improving over time.
Why these audits should occur at two-year intervals
I came to the conclusion that a two year interval was the most ideal time period between audits by an external party because I believe that two years is about the right time to review initiatives, check status, and complete a business focused review of a compliance programme. Anything more than two years might result in too much risk, because the business initiatives that the compliance system needs to meet change very rapidly. We also must consider the substantial time commitment required of the people that are involved with the audit’s planning and interviews. These employees could get frustrated if the process was occurring more frequently than every two years, so two years makes the most sense. While the period of time between external assessments needs to be an organisational decision, what we can say for certain is that this review does not need to be annual but should not be more than every five years.
Why I believe ETHIC Intelligence is the best agency to perform these audits
There are a number of ways that these audits can be carried out, but I believe that in order for them to be valuable and effective the key points are that they are conducted by an impartial auditor and one that has a compliance specialisation. My firm, ETHIC Intelligence, fits both of these criteria and I strongly believe that it is the best agency to conduct your compliance audits because:
INDEPENDENCE AND IMPARTIALITY
FIT FOR PURPOSE
We are a firm that is focused on risk, and we assess how organisations are managing it. We believe that the best way to manage risk is not to wait until an incident occurs, but to develop an effective compliance programme that minimises the likelihood that the incident occurs in the first place. As such, we focus on where risk is present within a business and how the compliance team manages that risk. We focus on businesses and their risks, not the risk of fines and prosecutions.
DRIVEN TOWARDS EXCELLENCE
Our focus as a firm is true excellence in all that we do. We measure it, rate it, and improve it. With ISO standards being a key cornerstone of our agency, we can’t help but focus on constant improvement. It is a part of our DNA and embedded in all that we do.
SPECIALISED IN COMPLIANCE
If you want to test your financial accounting systems, then engage a Big 4 accounting firm. If you want to test your manufacturing line, then engage an engineer. If you want to improve the way that your organisation conducts compliance, then engage ETHIC Intelligence. Our knowledgeable staff can guide you themselves or point you in the right direction for building compliance systems, building that compliance system’s infrastructure, engaging buy-in, building compliance budgets, and building controls, policies, and procedures. Our team consists of compliance experts who know industry best practices, what works, and what doesn't.
FOCUSED ON IMPROVING YOUR COMPLIANCE SYSTEM
We don’t exist to build compliance systems or policies; our services are focused on identifying gaps and areas requiring improvement. This is because organisations, for the most part, are the best system builders. They are the only ones that understand their inner workings and therefore where risk might be the highest. We can, however, guide and assist you throughout the building process. This is offered through our validation, testing, benchmark referencing, and analysis of your gaps.Performing audits of your compliance programme at regular intervals is extremely important to reduce the new risks presented by your ever evolving organisation. I believe that for the reasons listed above, ETHIC Intelligence is perfectly positioned to be the organisation conducting the audits of your compliance system. Visit our website to learn more about our compliance programme audits, as well as the rest of our services. Reach out to us to discuss biennial reviews of your compliance system.