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Assurance is essential to the good management of any business. However, as strong and valid as an assurance framework may be, with time comes change – meaning it is essential to keep assurance frameworks current and relevant. Gihan Mallawaarachchi, principal consultant at Sententia Consulting, outlines how to achieve continuous improvement throughout the assurance lifecycle.
Defined as a flow of information that provides a level of assurance that objectives will be achieved within an acceptable level of risk, assurance is designed to provide decision makers with confidence that obligations are met and risks are effectively managed.
The assurance framework describes how the key assurance objectives are brought to life within the organization and provides a clear structure and guidance to support assurance implementation at the departmental or functional level.
To be implemented effectively and efficiently, authentication policies must be planned and kept up-to-date. At Sententia Consulting, we recommend building a six-stage assurance lifecycle into your warranty framework.
Phase 1: Identification of assurance needs
Organizations are complex. At any given time, there are probably many different services, programs, projects, business initiatives and much more being offered. The purpose of this phase is to assess which of these activities will benefit most from the assurance. Some key criteria to consider when determining areas of greatest need for assurance include:
- Is the activity higher risk (eg high financial impact, public/media interest, political sensitivity, high impact on objectives, high consequence of failure)?
• Is it a defined area of focus for organizational leaders?
• Are there known issues or weaknesses in this area?
• Is this a new activity or has it recently undergone a change?
Stage 2: Understand existing assurances
Once the areas required for assurance are identified, existing arrangements and controls need to be understood to identify ‘gaps’, ensure there is no overlap and recognize where existing assurance can be used.
Key questions to ask yourself at this stage include:
- What controls (if any) are relevant to the identified areas of assurance need? Have these been tested recently?
• What verification activities (if any) have been carried out in this area in the last 12 months? Do they provide a satisfactory level of confidence?
• What verification activities (if any) are planned for the next 12 months? Do they provide a satisfactory level of confidence?
• Do any similar projects/programs/functions have any relevant recent or planned validation activities? Is it possible to collaborate on these activities or use them?
Phase 3: Prioritize through risk
Although many areas can be identified that would benefit from assurance, it is generally not cost- or time-effective to provide assurance on all of them. Therefore, once assurance requirements are identified, they must be prioritized to ensure that resources are allocated to the assurance activities that will be of greatest value to the organization.
Prioritization will help risk assessment using the organization’s risk matrix.
Phase 4: Securing the warranty
The priority assurance requirements are then assessed against different assurance approaches to determine the appropriate form(s) of assurance and associated methodology to ensure that the “right” assurance is performed to achieve the desired level of assurance confidence.
Once these decisions are made, it’s time to start making assurances.
Phase 5: Reporting and Monitoring
For assurance to deliver value, results need to be captured and shared. Different types of assurance will require different degrees of formality in reporting, from simple checklists or dashboards to detailed formal reports.
Reporting should be in a format that best facilitates the communication of assurance information with relevant stakeholders to support timely decision-making.
Phase 6: Implementation of recommendations and continuous improvement
The real benefit of assurance comes from taking the findings, identifying opportunities for improvement and implementing them as quickly as possible to keep the organization improving.
A continuous improvement approach is essential for organizations to remain relevant and successful in our ever-changing social, economic, political and technological environment. It is important to establish clear responsibilities and time frames for the implementation of recommendations so that the value of the guarantee is not lost.
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