Ordering a full Portfolio saves about 60% on the cost of each audit and gives you the additional benefit of an AuditGuide with extensive background materials on the audit process. Ordering individual audits is cheaper if you want to target just two or three key areas.

Most of the audits are about 100 pages long. Each begins with an Executive Summary and a guide to actually conducting the audit (special considerations, who to include in the audit team, how long it will take, etc).

Then the audit is normally presented as a series of steps, to make it as easy as possible for the individual or team running the audit to do so quickly and easily.

The early steps of each audit usually involve some research and discussion to make sure that you know exactly what you are auditing and why. Subsequent steps focus on a particular area or process and will include detailed audit questions. The individual audit steps usually include a series of audit questions. These can be presented in several different forms. If personal interviews with staff members, customers or others have been suggested, you will normally find a sample interview sheet. In other cases you may find questions for a written survey or more detailed questions on a particular function or process which need to researched and answered.

Lastly, you will find guidance on pulling together the audit results, presenting them, drawing conclusions and then building an action plan to help put right any problems or weaknesses that your audit has uncovered.

WHY YOU SHOULD USE COMPANY SELF-ASSESSMENT AUDITS?

While financial audits are a well-established part of the management systems used in most companies, progressive organizations have recently begun to apply the audit concept to a broader range of management processes. Self-assessment audits have now become a tool for evaluating the performance of all key systems and processes.

Executives worldwide are turning to self-assessment audits to help gather more complete information about the departments and processes which they manage and to help their organizations compete more effectively.

Adopting a system of audit programs is a recognition of the fact that companies can no longer survive simply by producing and marketing a product or service. Managers must embrace the idea of constantly upgrading and improving the way in which they design, produce and/or deliver their products and services. Cambridge Strategy's self-assessment audits provide the ideal way to:

• Identify problems before they happen

• Analyze departments and processes to pinpoint weaknesses and target improvements

• Implement world-class best practices

• Ensure hands-on control of every area of the business

• Measure and improve performance across the organization

• Compare results with other companies

• Align overall business strategy with the company's needs and strengths.

WHAT IS A COMPANY SELF-ASSESSMENT AUDIT?

Financial audits have traditionally been used to monitor a company's financial performance in comparison to a set of standards, which are typically imposed by government regulators or by professional standards groups. In this sense, financial audits have provided managers with a systematic way of measuring their company's financial performance. By first establishing clear standards, and then by regularly measuring performance along those standards, managers can determine what changes need to be made in order to improve their performance and limit their liability.

Non-financial audits are not usually based on specific standards. Rather, they help mangers to define processes for which they are responsible, measure performance and efficiency and identify possible improvements. Running non-financial audits regularly may, however, lead your organization to develop informal standards for a particular department or process.

To give added perspective into the ways that management audits compare with traditional financial audits, consider the differences and similarities between financial audits and audits of other management processes:

WHAT TO EXPECT FROM A COMPANY SELF-ASSESSMENT AUDIT?

While company self-assessment audits are an important part of process improvement, their success depends on understanding how to use them effectively. The following list will help managers to understand what to expect from a company self-assessment audit.

The self-assessment audit is a very powerful management tool resulting in the following benefits:

Identify opportunities for improvement. This is especially important with the drive toward Continuous Quality Improvement. Although not every opportunity for improvement can be tapped, audits will help identify priorities for managers by showing which changes will have the highest impact on overall performance.

Reality check. The processes actually carried out in an organization may differ from what was planned. What executives think is needed may not match the demands of customers or outside circumstances. By systematically gathering data on how reality compares with what managers assume is true, companies become more resilient in the face of change.

When the strategy changes, processes that support the new strategy won't evolve automatically. Conducting regular audits of management processes will help achieve a strategy, since those processes contribute to the achievement of strategic goals. Also, conducting audits will help managers to know when the strategy is outdated and needs to change.

When they are integrated into the management process, audits can measure performance improvements and determine the impact of changes that have been implemented in the company. This not only serves to measure the effectiveness of initiatives, but also provides a sense of accomplishment when goals are met.

Compiling audit information increases management's ability to address concerns raised by increasing regulation and litigation, and to answer questions raised by outside stakeholders who are involved in and affected by the business. The audit is a systematic way of clarifying and prioritizing those needs.

When audit information is systematically collected and shared, it enables various parts of the organization to work together effectively. This is vital in light of increasing integration between functional units, and between companies. This breaking down of barriers enables a company to respond more quickly to the demands of customers and other important players.

Because there are multiple suppliers competing for customers, buyers can expect that satisfying their requirements will be a priority when producers are choosing the direction they will take. Because most audits involve outsiders, including customers, the audit process will help change the mind-set of managers who think they automatically know what their customers want without even asking.

The process of conducting the audit will increase the commitment of people throughout the organization to change. Audit results may convince top management to re-order its priorities, and may help to focus the vision of people at all levels in the company. Recognising differences between desired and actual performance is the first step in creating the momentum to close that gap. Then the key results of the audit should be shared widely with people throughout the company.

BENEFITS OF A SELF-ASSESSMENT AUDIT

Self-assessment audits are more necessary now than they were in the past because the arenas in which most companies compete have become much more complex. Audits can help managers to deal with the following elements of that increased complexity:

• Competition has become more intense. Because more products and services are available at lower prices, there is little room left for sloppy or careless management. Financial audits have been a part of most management systems because they reduced the risk of regulatory violation or poor financial management. In much the same way, non-financial management audits will result in cost savings or increased efficiency that lead to competitive advantage. Increased competition also means that managers must capitalise on every opportunity for improvement; audits are a way of thoroughly exploring and identifying improvement opportunities.

• Organizations have flattened, and decision-making authority has been pushed to lower levels. This results in quicker response time to customers, but also requires that information be more widely distributed throughout the organization. Leaner organizations also mean that people at all levels of the company are expected to increase their contribution. Conducting audits and sharing the findings that result creates a system for gathering and disseminating information more widely.

• Demands of the marketplace require that work be organised by process rather than by function. The need for a more rapid response to changes that occur with increasing speed means involving people from various disciplines in a way that they have never been asked to co-operate before. An audit shows how those functions combine to determine performance, and points to ways that each aspect of a process should be improved. It also presents the information in a way that can be easily shared between co-operating functions.

• Audits identify what is being done right, and reinforce those practices by encouraging regular internal benchmarking. Aside from highlighting opportunities for improvement, audits lead to the discovery of processes and procedures that contribute to the company's success. These processes may develop informally; therefore, they may not be widely recognised throughout the organization. By recognizing and formalizing them, managers encourage them to continue.

• Change is the only constant in today's world. Business survival depends on accepting and adjusting to change. In the past, recognizing the need to change has often been difficult for successful companies. Integrating audits into standard management processes will help managers to see the need to change. This, in turn, increases the chances of being able to respond in a way that will capitalize on change rather than causing the company to be a victim of change.

• Thus, audits can do much more than ensure a company's financial stability and regulatory compliance. Indeed, auditing a wide variety of management systems and processes will prove to be critical to business survival in the decades ahead.

WHO SHOULD CONDUCT A COMPANY SELF-ASSESSMENT AUDIT?

Each audit, contains full guidelines on selecting and briefing the audit team. As a general rule, the audit team should be made up of 3 or 4 people who will work as a team to conduct many or all of the audits in any given Portfolio. If your organization already has process improvement teams or problem solving teams in place, these may serve very well as audit teams.

The team will normally co-opt one further member from the department or process being audited - this person will bring additional detailed knowledge to the audit team.

None of the audits requires any particular financial skills or training and the team need not include anyone from the finance/audit department. However, financial audit skills include knowledge of interviewing and investigation techniques and these may be helpful if they are already available in your organization. So, some companies use an existing audit department to conduct their management audits, while others create entirely new teams.

Each audit or Portfolio also includes all the preliminary briefing materials needed by the audit team - there is no need for any external consultancy or training whatsoever (unless you feel it necessary to give the team some team-building or teamworking training at the outset).