5 January 2020 posted by Kelly Brown

We have recently submitted ourselves to an audit by an independent third party to obtain certification for two international quality and workplace safety standards. The audit process is laborious and painful for the organisation; distracting us from our ‘business as usual’ work in two key ways. First, it is time-consuming and time-sensitive as the auditors require deliverables that are both urgent and important. Secondly, the audit creates a mental distraction.

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During the audit, a nervous tension pervades the organisation with everyone anxiously holding their breath. We are all thinking “I wish I had done more over the last 12 months.” When the audit is successfully completed and we receive the certifications, there is a collective sigh of relief. There are congratulatory emails that follow and pats on the back for a job well-done.

While this sense of accomplishment is a wonderful boost for the organisation and the certification provides a competitive advantage;  as a director of the company, independent third party audits have a huge benefit to me personally – they help me sleep at night!

As a director, I have oversight responsibility for everything in the company. I also potentially have personal exposure to civil or criminal liability if anything goes wrong. What I rarely have, if ever, is the time to personally verify every system and process. It is impossible to have intimate knowledge of more than a few areas without losing focus on my core priorities.

Independent third party audits provide essential peace of mind to directors in three key ways:

1.   Reliable Independent Information. 

Perhaps, most importantly, independent audits assist directors in carrying out their oversight responsibility. The fact that a competent and reputable independent party has come in, poked around and verified key systems provides some assurance that you won’t be hauled off to jail. The detailed review by the independent auditor provides reliable information about the fitness of the company’s systems and processes. While the director remains responsible for oversight, this independently gathered information assists the director with satisfying requirements to remain knowledgeable about the company.

2.   Opportunities for Process Improvements.

While management may not always appreciate someone looking over their shoulders, rather than thinking of auditors as detectives looking for evidence of wrongdoing, it’s best to view them as skilled advisors looking for what’s working and what can work better. Independent third-party auditors offer a new perspective on the company’s operations.  In the course of collaborating with independent auditors, management has access to the auditors’ wealth of knowledge about systems and processes based on what they have observed elsewhere.  In most cases, auditors have worked with numerous companies in the industry and often across different industries. Their experience and broad perspective allows for fresh insights that can lead to process improvements and improved risk management.

3.   Ability to Make Pre-Emptive Corrective Actions. 

In addition to shining a light on what works and potential improvements, independent audits have the benefit of uncovering any shortcomings in the company’s systems or processes. Discovering previously unnoticed deficiencies in the course of an audit gives the company an opportunity to address and correct them before they create serious operating problems or legal liabilities. The company gets the chance to clean up its act voluntarily and without the urgency of a crisis or lawsuit. With the benefit of foresight, any needed changes can be designed and implemented with greater care and deliberation.

Knowing that an independent audit can (1) provide reliable information about the company, (2) contribute to continuous process improvements, and (3) allow for preventive measures; in my capacity as a director, I find such benefits invaluable. What’s a good night’s sleep worth to you?

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Disclaimer – these articles are provided to supply general safety information to people responsible for OHS in their organisation. They are general in nature and do not substitute for legal and/or professional advice. We always suggest that organisations obtain information specific to their needs. Additional information can be found at www.workcover.nsw.au