The Importance of Internal Auditing

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May is International Internal Audit Awareness Month. Internal audits are essential to governance and foster trust, transparency, and accountability. At its simplest, internal auditing involves identifying the risks that could keep an organization from achieving its goals, making sure the organization’s leaders know about these risks, and proactively recommending improvements to help reduce the risks. For internal auditing to be effective, the process must be free from undue influence, and the organization’s leaders must be open to discussing tough issues and seizing opportunities to make necessary changes for improvement. Internal audits can often be the catalyst for improving organizational governance and risk management.

Why would I want to do an internal audit? First of all, you may be compelled to conduct internal audits by your company’s leadership. Many manufacturing companies have internal audit programs that stem from provisions of the corporate HSE management system policy. Most management systems, whether ISO14001 or some in-house company developed system include the “plan-do-check-adjust/act” cycle.

The “check” phase being where internal audits come into play. For any internal audit program to be effective, top management must be committed to identifying and correcting problems.

Companies with established internal audit programs go about it in a variety of ways:

  • hire outside consultants to perform the audits;
  • have corporate audit teams
  • build teams of personnel from other plants to audit a plant;
  • hybrids of all these approaches.

Besides being compelled, internal audits demonstrate good environmental stewardship, again showing company leadership’s commitment to identifying and correcting problems. One direct benefit is the elimination of non-compliance situations. There may be some other indirect benefits. In the event an agency inspection does discover a non-compliance issue, the existence of a well-functioning internal audit program may help demonstrate the inspection finding is a one-off instance and may help mitigate enforcement consequences. An existing internal audit program also provides an operator the opportunity to take advantage of audit privilege provisions that exist in some areas.

In addition to improved compliance and better relationships with regulatory agencies, these are some of the other potential benefits of internal environmental auditing with a continuous improvement management system:

  • Improved environmental performance;
  • Pollution prevention;
  • Resource conservation;
  • Increased efficiency/reduced costs;
  • Enhanced employee morale;
  • Enhanced image with public, lenders, investors; and
  • Employee awareness of environmental issues and responsibilities.

So, what is an environmental audit? Environmental auditing is a systematic, documented, periodic and objective process in assessing an organization’s activities and services in relation to:

  • Assessing compliance with relevant statutory and internal requirements;
  • Facilitating management control of environmental practices;
  • Promoting good environmental management;
  • Maintaining credibility with the public;
  • Raising staff awareness and enforcing commitment to environmental policy;
  • Exploring improvement opportunities; and
  • Establishing the performance baseline for the organization’s environmental management system.

Other sectors of business employ internal auditing as a key component of continuous improvement; having a good internal audit program is also just good business.

TRICORD has professionals that are well versed in regulatory compliance and environmental management systems.  Let us help you develop durable and effective compliance systems as well as assist with compliance assessments and third-party multi-media audits in order to achieve your sustainability and environmental compliance goals.  You can read more about our audit services here or contact a TRICORD CRM to discuss your specific needs.

Written by: Larry Poche