A Positive Audit: Internal Risk Assessment for Manufacturers
In an environment of ever-increasing competition, regulations and cyberattacks, an internal risk assessment audit can help shake a company from its lethargy by uncovering new opportunities and addressing risks. If supported by all levels of the organization, the results can offer strategic and tactical insight about how company resources are used and how they might be reallocated to boost performance.
Areas of Risk
Cybersecurity looms as the latest threat to a business, not only from attacks that can shut down systems, but from data theft ranging from customer records to trade secrets. Audits can unveil weaknesses in the networks of your own company and third-party companies with access to your networks. They may also propose improvements such as additional layers of defense, enhanced detection methods, and better encryption of the data.
Supply chain vulnerability remains a priority for a manufacturer, from vetting raw materials to monitoring the financial stability of suppliers and shippers. Delays, shutdowns and bankruptcies can impact your manufacturing process and add costs. An internal audit can inform you of potential problems – and prompt you to create contingency plans — before they happen.
Customer vulnerability also poses a threat. Customer finances may ebb over time, which an internal audit can discover before it surprises your bottom line.
Accounting may be prone to fraudulent activity. Purchase orders, cash receipts, billing and other financial applications are subject to abuse. Internal audits can ferret out these risks to protect company assets.
Areas of Opportunity
Improved data analysis provides statistics about material wastage that can be curtailed to cut costs, as well as sales trends that can be enhanced to boost revenue.
Better compliance with government financial and safety regulations means fewer problems if – or when – outside auditors arrive. This can avoid penalties, provide a smarter workplace, and enhance your company’s reputation.
Inter-department cooperation during an internal risk assessment audit can lead to greater cooperation after the audit. Manufacturers may benefit from sharing ideas and suggesting process changes that could improve product quality and worker productivity.
Better marketing can result from discoveries during the internal audit — from enhancing customer relations to preventing social media blunders.
Internal audits can discover the risks and opportunities within manufacturing operations, offering data-specific insight for managers seeking to improve company value, safety, and productivity. If you have questions or would like more information on internal audits, contact a member of the Dannible & McKee Audit Group.