Without having any form of risk assessment done, imagine plunging your life’s savings into building a Sunshine Coast business or organising a function. It would be like going on holiday and not trying to gauge the costs of taking that holiday in anyway, and now you are stuck on an island with no means of getting back home!
Risk assessments believe it or not gives you a significant edge when working your business or upcoming function. It’s kind of like a map or GPS that tells you when to stop and go. A risk assessment does some level of future telling for your business, and it is even better than your traditional magic crystal ball that tells you about the danger ahead but tells you nothing on how to contain said predicted danger. Business risk assessments go a long way to aid you to make critical business decisions that may make or mar your business.
Risk assessment – business risks – hazard factors
Risk assessment in a more conventional definition, is the detailed process in which particular business risks and hazard factors which have high and low impact potential to ruin your business are highlighted. The entire process involves critical analysis and evaluation of just how said risks and hazardous factors could play out to destroy your business over a period, and as well point out the collective fall out in terms of losses and overall damage that could be caused.
Believe or not, an audit is one excellent tool that can be used to your advantage to get your business thoroughly reviewed, and in the process provide the same workable data that you would collect after an actual risk assessment exercise. The data collected from a typical audit could aid you to take the same kind of effective decisions regarding neutralising risk and hazard factors, just like the data from an official risk assessment process sanctioned by you.
Because an audit is typically an in-depth look into your business finances by an independent body, most business owners aren’t always thrilled at the prospect of getting audited. I mean, the idea of having a stranger cut deep into your finances is enough to make any business owner very uncomfortable.
An audit process mainly falls into three categories, which are the:
- Product category, which involves the analysis of the products of a business, to ensure that the finished products are satisfactory on the consumer level, and as well make true its claims.
- Process category involves the evaluation of the processes that lead up to a finished product or function to ensure that all the quality control tenets are met.
- System category audits are based on the evaluation of the integrity of the technology system the audited business runs on, to ensure that the company’s interests are protected.
Though audits generally are geared towards the same objective or goal, each audit is named according to its purpose. Some audits known by their directives are:
- Financial audits
- Operational audits
- Compliance audits
- Integrated audits
- Environmental audits
- Investigative or special audits etc.
- Gmp (Good Manufacturing Practices) audits
An auditor in general, is a qualified individual who conducts audits. Though most talked about auditors are external auditors that work for auditing firms that handle a ton of companies or the government to ensure that businesses are up to par with specific rules and regulations, we also have internal auditors that audit his or her own company. The process of a full-on audit involves the steps below;
- Creating a workable timetable that favors both parties involved
- Getting ready collective data required to meet the audits goal
- Gathering real-time data on site of the audited business
- Fixing an exit interview to sort out discrepancies that were observed during the onsite data collection
- Highlighting errors, inconsistencies, omissions, etc., in the data collected to make for proper communication and corrections
- Follow up and Response from the contract manufacturer to make corrections or requests for additional documentation
The primary objective of an audit is to make available practical findings to the audited establishment concerning the scope of the said audit. The collective information collected from the audit process helps the stakeholders of the audited establishment take into consideration highlighted risks factors and ultimately make constructive changes to cut back on or neutralise the blowback that is likely to occur from stated risk factors. An audit is one great tool that shouldn’t be overlooked and used to move a business establishment forward.