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Prove It!

Demonstrate your trustworthiness & compliance online

In business, we are constantly required to prove what we are doing. This normally takes the role of an audit, whereby the reported values are crosschecked. This happens most frequently in financial circles, but also includes other business functions.

Financial audits review an institution's financial statements. The purpose of this audit is to determine whether the financial statements fairly present the financial position, results of operations, and cash flows as of a certain date or for a period ending on that date.

Operational audits review a specific department, division, or area of the business. This type of audit includes a review of policies, procedures, and operational controls.

Compliance audits determine whether the business is complying with legal procedures, internal controls, and applicable regulations.

Information system or technology audits assess the controls over a business' electronic data processing and computer areas.

Effective audit programmes involve:

Benefits of proof

Have you ever sought a second opinion on something? Taken up a reference on a customer or employee? External ratification of a claim, especially when is can be measured against a known standard, provides business owners with a back-up – a sense of due diligence.

Of course the legal benefits of auditing your business are clear, and allows you to benchmark your business to the best practice in the industry, region, etc.

The success of an audit depends on the cooperation and professionalism of the organisation being audited and the skill of the firm performing the audit. A successful audit is one that:

Quality standards

A few years ago, everyone was rushing to get ISO9000 accreditation, and whilst the fashion has subsided, the need for quantifiable management processes holds true. The ISO9000 evaluation is centred on an audit of processes against the standards set.

An other common quality standard is the product Kitemark. This demonstrates a level of safety, functionality and responsibility for the customer.

Online quality standards have been slow in coming forward – perhaps because the ISO is not technically minded? This includes in the field of accessibility that we explored last month. The general rule of thumb is to employ experts in a certain field to audit, and not to accept their consultancy (remember Andersen Consulting and Enron!).

Customer Perceptions

By undertaking public audits, customers will see that you are not hiding anything or deceiving them. This helps develop trust amongst your customers, giving them a measurable service level to expect.

Most companies recognise the benefits of improving customer perception of their business and their approach to the market, environment, etc. Many of these attempts could be seen as cynical spin if they are unsubstantiated.

The Cost

Quality audit costs such as ISO9000 have fallen over the years, whilst financial auditing costs appear to rise every year!

Online audits are currently quite expensive as they are relatively new, accessibility and privacy assessments are generally unregulated and attract consultants who want to sell their services on the back of the audit.

However, the cost of not doing an audit should be clear; potential lack of customer trust and goodwill on one side of the scale, and for the legal requirements, fines, prison and/or bankruptcy. Can you afford this?

Audit To Build Trust

In the business world, trust is inextricably linked to corporate performance. Businesses are still reeling from some hard-learned lessons, and the market is scrutinising companies like never before. Businesses are responding by focusing attention on their audit systems and functions.

You can audit your own processes and publish the reports, and this will build some credibility in the marketplace, but your sceptical customers and competitors could identify flaws and turn it against you.

According to best practices, an internal audit plan should include the following elements:

Using external auditors is more expensive, but you generally find that they highlight apolitical issues and bring more credibility to the results, and in some cases (financial audits) are a legal requirement.

The motto here should be – Be true to yourselves, and prove it to your customers.

About the Author

Thom Poole is a Chartered Marketer and Fellow of the Chartered Institute of Marketing, and a member of the Marketing Society. A marketer with over 19 years experience in marketing and 14 years in online marketing and web strategy, Thom is strategic marketing consultant for Jack Marketing Solutions, working with SMEs. He runs a number of websites providing information and support for leisure and business topics. A regular speaker on the CRM and e-marketing event circuit, Thom has also written a book on ethical e-marketing, called 'Play It By Trust.' The book is available at the publishers as a hardback or download.

Also published in the Daily Telegraph Business Club, March, 2006

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