An organizational auditor—also referred to as an internal auditor—is a specialist or consultant that an organization hires to assess internal processes. While the term “audit” tends to have a negative or hostile connotation—imagine an IRS auditor looking for flaws, oversights, inconsistencies, or fraud in a company’s financial books—an internal auditor actually serves to help an organization improve its operations. If an external auditor is often viewed as an “enemy” or “adversary,” then an organizational auditor can be thought of as an ally. This person’s job is to mitigate risks, ensure regulatory compliance, and recommend new controls or processes to strengthen the company as a whole.
Why Internal Audits and Document Management Go Hand in Hand
So what do organizational auditors have to do with document management or enterprise content management? What could these allies for internal process improvement stand to gain from DMS or ECM technology?
To understand the benefits of electronic document management on organizational auditing, we first have to take a look at the biggest challenges that internal auditors tend to face on the job. In 2013, EY conducted a “Global Internal Audit Survey” and compiled a report on how organizations could better match their internal auditing talent to their overall needs and goals. In the survey, organizational auditors identified the following responsibilities as their top work-related challenges:
- Helping organizations to comply with laws, government standards, and other regulations.
- Identifying, monitoring, and mitigating risks—including threats to cyber security, adoption of new technologies, preserving data privacy, and more.
- Providing strategic advice and insight to stakeholders and other organizational leaders.
Of these three core responsibilities facing internal auditors, document management or enterprise content management can provide clear relief for the first two.
Document Management and Regulatory Compliance
According to the EY survey, 36% of respondents see “providing assurance in a compliance environment” as their primary duty as organizational auditors. It isn’t difficult to understand why compliance is such a major issue for internal auditors. Not only are government regulations commonplace across virtually all industries (HIPAA stipulations for healthcare and health insurance; American Bar Association rules for law firms; FINRA for financial organizations; and many more), but auditors are perhaps the ones best-suited to address compliance issues across an entire organization. (In contrast, organizational auditors can play a big role in how a company implements new technologies, but IT departments also share a major portion of that responsibility.)
Most government regulations are complicated, filled with long lists of rules that apply to many different facets of an organization. However, many regulatory acts or bodies—including FINRA, HIPAA, and the SEC—all have rules about the storage, security, and retention of sensitive information. HIPAA, for instance, requires healthcare organizations to limit who has access to private health information and sets forth rules for how long an organization should keep that information on file.
For such requirements, document management software can be a major aid. eFileCabinet, for instance, boasts advanced file encryption, allows companies to set up user-based security permissions to control who can access certain documents, and includes automated document retention features that make it possible to schedule file deletions or archives. As such, an organizational auditor in charge of helping their company become compliant could recommend the use of DMS or ECM to bring the company’s file management processes in line with government or industry regulations.
DMS, ECM, and Risk Mitigation
Document management technology could also prove an invaluable tool in helping internal auditors to mitigate some of the major risks that many organizations face these days. As mentioned previously, the EY survey showed that most organizational auditors identify tech-related challenges—cyber security, data privacy, and adopting new technologies—as some of the biggest risks that modern businesses face. DMS or ECM systems can help to mitigate all three of these risks:
- Cyber Security: The recent scourge of hacks and data breaches has understandably left businesses worried about their cyber security. So far, customer data—credit card numbers, names, addresses, etc.—has been the biggest target of these hacks. However, company documents and data—from proprietary information and intellectual property to sensitive client contract information—are also items that could hurt an organization if they fell into the wrong hands. Document management and enterprise content management software take steps to encrypt files, to guarantee secure document transmission to and from clients, and more.
- Data Privacy: It may seem as if data privacy and cyber security are two sides of the same coin, but they actually represent different concerns. Take HIPAA, for instance: One of the requirements of that regulatory act is that organizations must limit who has access to private health information internally. Document management software makes it easy to set up file-based securities, to dictate who within your organization can access individual documents.
- Adopting New Technologies: DMS and ECM by themselves are technologies that some organizations are hesitant to adopt. The idea of establishing a paperless office is an attractive one for most businesses, but the risks or challenges associated with the shift—transferring years of paper files over to a digital database, potentially exposing company files to cyber security threats, etc.—can be discouraging. Luckily, good DMS programs like eFileCabinet help to minimize the stress of going paperless, using optical character recognition (OCR) to create digital versions of paper files. Electronic document management also includes ample cyber security measures (as discussed above) and actually makes a company’s files safer than they would be in a filing room. With redundant file storage, eFileCabinet preserves your documents across several servers, eliminating any chance of information loss or destruction. A file room fire, on the other hand, can destroy a company’s entire file history.
As you can see, DMS and ECM technologies can help organizational auditors in numerous ways—from mitigating cyber security risks to maximizing operational efficiency. Document management can’t do the entire internal auditing job by itself. Obviously, the auditor still needs to assess other operational processes throughout the company. However, for any tasks or processes related to the storage or protection of information, DMS and ECM can go a long way in making organizational auditors more effective in their jobs.