This article is based on an interview performed with Marc Cwikowski, the co-founder of World of Auditing, which will be delivered in three parts.
This final part of the interview focuses on his expertise while discussing the value that audit functions bring back to business and possible ways to improve.
World of Auditing
How can you describe risk-based auditing, and why is this important?
Marc Cwikowski
A risk-based approach is critical because resources are finite. Suppose you have an audit organization with so many auditors. Suppose you have a growing number of processes, a growing number of suppliers, and growing complexity, and then you need to put your audit resources where it matters the most and to do that, you need to understand where the risks are. Where do you put your efforts, and how often? That’s what I mean by audit scheduling with the risk-based audit mindset. Auditors do also apply a risk-based approach to the audit trail. When I go to a factory, do I spend more time reviewing the documentation, or do I spend more time in the field? Most auditors take a risk-based approach to their on-site or remote audits by focusing on the core processes, and HACCP plans that matter the most. Risk-based is across the entire audit process, from scheduling to conducting the audit through reporting. Reporting should focus on the things that matter the most. No risk-based auditing, no value at the end, I believe.
World of Auditing
What benefits are audited companies getting from audits?
Marc Cwikowski
I think, first of all, it is about uncovering risks. By revealing the things that do not adhere to the applicable requirements, the company can put corrective actions to avoid issues related to the particular finding and problems that might happen in the future. So, from an organization’s point of view, there is a lot of value because it prevents issues from happening or reoccurring. I’ve seen situations where quality managers of an audited organization are delighted to see evidence in a report because they use the latter to maximize the ROI. They can go a level up to say; we need to do something here, invest, perhaps in the infrastructure, or train our people. Reports and audit findings need to align with what matters the most for the company. Now here, internal and external auditors might have a different approach. If you are an internal auditor, you should know what matters for your company. I would probably advise you to align your way of doing the audit and how you report with what matters the most for the company. If you’re an external auditor, you need to align with the external standard or scheme you are auditing against. But if we talk about internal audit organizations, training auditors with the values, the mission, and the vision of the company is extremely important. What my stakeholders expect from me as an auditor is a crucial question that an internal audit organization needs to answer.
World of Auditing
Great. How can auditors help to enhance the value?
Marc Cwikowski
No good technical skills, no value; no strong human skills, no value. No strategic thinking skills, no value. So it is, I believe, through developing these three elements that auditors enhance the value they provide. I think value also comes from setting the right audit program, having the right auditors, the proper process, the right risk-based approach, the appropriate reporting, and the appropriate follow-up. All of these provide value for not only the auditor but also to the audit organization.
World of Auditing
Do you think auditing is driving continuous improvement and why?
Marc Cwikowski
Well, I think it is. From my 30-plus years of experience in the industry, I’ve always seen organizations positioning audits as a continuous improvement tool. I believe there is no doubt about that. Sometimes there can be some discussions about the rating of a finding. Still, in the end, it is there to serve a unique purpose which is continuous improvement for the benefit of the organization, the consumer, and the customer.
World of Auditing
And how can an auditor help this process during an audit?
Marc Cwikowski
There are many ways, and I think we could talk for hours about it, but the first thing I would recommend for auditors is to report an issue supported by enough objective evidence and focus on the why. Auditees who understand the reason behind the finding and what kind of impact it can have on food safety and quality or environment or whatever are inclined to put the proper action in place. If, as an auditor, you don’t understand the process, if you cannot explain the why, if you’re unable to communicate, and if you’re unable to report appropriately, then it is unlikely that your audit findings will trigger continuous improvement.
World of Auditing
How do you see the audit function evolving?
Marc Cwikowski
Well, I think the evolution started already. The train has left the station. Technology allows us to access data much more than we did in the past, so I think an audit will not be in the future as it was in the past. I believe connectivity and access to data will allow audit organizations to do much more before the conventional audit occurs. Analyzing the data to understand the trends and issues, reviewing the last five years’ data, who is in the organization, and who left the organization will become part of the process. How many issues did that particular supplier have over the previous five years? Did they have a recall in the recent past? What were the results of the monitoring programs in place? These things will feed into the risk-based auditing approach that we discussed before. This is the future of auditing. And obviously, there will be an impact on auditors. Being an auditor in the future will not mean the same as being an auditor today or 20 years ago. This is the future, and I think if we talk about the food industry and compare it with other sectors, aviation, automotive, etc. We are a bit behind; I think some industries are already further on the road. But we are getting there…
World of Auditing
How do you adapt to this evolution, and how does your company help you with this?
Marc Cwikowski
We talked earlier about the auditor’s life cycle and recruiting auditors. Today there is a lack of auditors in the market. So, we understood that we could play a role in that auditor life cycle from recruitment, onboarding, learning and development, continuous evaluation, and development of auditors. We believe that World of Auditing can support the industry and further develop and prepare auditors to do the right job and provide value. Through the experience we acquired, we are well-positioned to do a checkup of an organization to understand its strategies, programs, and protocols and know where it would like to be. Then we can put programs in place to bridge the gaps. We also believe there is power in collaboration. Companies see the benefits of sharing best practices—working together on the challenges and opportunities and avoiding reinventing. We are already playing a role by facilitating essential conversations between major brands, specifically on audit strategies, protocols, and programs in a non-competitive way. It looks like this is answering a critical need. We call this platform the Corporate Audit Forum, and we already have ten major global food companies on board.
World of Auditing
And how do you think the digital transformation will impact the audit profession?
Marc Cwikowski
COVID made a considerable change. In 2019, we managed a benchmark study comparing audit strategies and protocols and programs of 10-plus big companies. We addressed that particular point of digital transformation and new technologies to perform remote auditing etc. In 2019, just a few companies saw this as an opportunity in the future and benefited from that. Still, the pandemic changed everything, and those who did not see the need to explore this had to do so because there was no other possibility. Digital transformation is not only about remote auditing. Digital transformation is also about processes capturing data, making use of that data, and also, it’s about people. This shift will have a massive impact on how we perform audits in the future and how we will select, recruit, onboard, and develop auditors. They will have to become tech-savvy and use the data generated. Data analysis will be a considerable part of the auditing process, much more than today.
World of Auditing
So how do you see digital transformation impacting the role of the audit manager?
Marc Cwikowski
Well, in two ways. First of all, ensuring that they develop their auditors in this area, one of the skills we discussed earlier would be using data and new technologies. So, the manager will have to put that into the equation for the future. Then, they should know how to use the technology to analyze the data generated through all the audits. How can we better use these data through tools to benchmark performance between plants? I believe that’s the power of data generation, data analysis, and data sharing, and that’s a duty of an audit manager. This is where the digital transformation will help these organizations provide much more value through auditing than they did in the past. Auditing will not only issue a report; it will be much more than that. It will be using the data generated through audits, whether we talk about supplier auditing or whether we talk about owned manufacturing sites. Using data is a great opportunity and challenge for audit managers in the future.
World of Auditing
Here is the final question for you today, what are the actions to be put in place to attract more professionals to the audit function?
Marc Cwikowski
Well, I think the first one would be what we do today. We are talking about the audit profession, the career path, the potential, and what it takes to be an auditor. I think sharing this kind of information with the outside world is vital. We mentioned food industry students never heard about auditing during their studies. I think that’s step number one and let the food professionals talk about auditing as a career opportunity. Step number two would be to engage with the students, the next generation, and the future leaders of the profession that are today studying. How can we engage with universities and share our knowledge and experience? If organizations value their auditors better, then they will attract more auditors. And if auditors understand that through being an auditor for a few years, they will gain the experience that will allow them to become quality managers, quality directors, and VP quality. That is fantastic, and that is a reality. So, let’s talk more about it. That’s what I would do and what we envision doing in World of Auditing.
World of Auditing
Thanks very much, Marc, for sharing your invaluable thoughts and experience.
Marc Cwikowski
You’re welcome.
Have you not read the second part yet? Here is the link.
