In an increasingly complex and risky business world, organizations need a coordinated and efficient risk management approach. Here Comes the concept combined assurance become very relevant.
This approach helps you integrate all assurance functions within the organization to ensure the information submitted to management and the board of Directors is correct, relevant, and comprehensive.
What is Combined Assurance?
By definition, combined assurance adalah a collaborative method that integrates various assurance sources such as internal audit, external audit, risk management, compliance, and internal controls to provide a comprehensive overview of risk management and control in an organization.
By implementing combined assurance, you can avoid overlapping assurance activities and ensure that all critical risks are identified and appropriately controlled.
Examples of Combined Assurance in the real world
To give you a concrete idea, here are some examples of the application of combined assurance:
- Banking Industry: The internal audit, compliance and risk management divisions work together to review the efficiency of the anti-money laundering (AML) control system.
- Energy Sector: Perusahaan energi melakukan integrasi antara audit HSE (Health, Safety & Environment), kontrol keuangan, dan audit operasional.
- Financial Services Industry: The compliance and internal audit teams work together to monitor compliance with OJK regulations and tax reporting.
In each of these cases, the various assurance functions do not work in isolation, but rather share information with each other, harmonize approaches, and avoid duplication of work.
Read Also: Internal Audit work Program: Definition, Benefits, and examples of implementation
Benefits of Combined Assurance for your organization
Adopting combined assurance provides various strategic advantages for organizations, including:
1. Operational Efficiency
By unifying assurance processes, you can reduce duplication of activities, reduce audit costs, and save time.
2. Increased Accuracy Of Information
Because assurance teams work collaboratively, the information you convey to management and the board is more accurate, thorough, and relevant.
3. Faster risk detection
When the various lines of Defense (three lines of defense) coordinate, potential risks can be identified and acted upon more quickly.
4. Improved Regulatory Compliance
Regulators, especially in the financial services industry, highly value the combined assurance approach because it increases the traceability and transparency of the assurance process.
5. Better business decisions
Management can make decisions based on a unified, clear, and Conflict-Free assurance Report.
Difference between Audit and Assurance
Although often considered the same, audit dan assurance have fundamental differences:
| Aspect | Audit | Assurance |
|---|---|---|
| Focus | Evaluating financial statements | Provide confidence in processes, systems, and controls |
| Perpetrators | External or internal auditors | Tim internal, auditor, konsultan, compliance, dll |
| Coverage | Usually limited to the financial aspect | Broader: financial, operational, risk, compliance |
| Purpose | Provide opinions on financial statements | Give confidence that the process is running effectively |
By understanding the differences, you can determine when and how to involve each function in an assurance strategy.
Steps for Implementing Combined Assurance
For the implementation of combined assurance to run optimally, you can follow these steps:
1. Identify existing Assurance functions
Map out all the assurance functions in your organization, such as internal audit, compliance, Risk Management, and internal controls.
2. Define roles and responsibilities
Determine who is responsible for a particular area so that there is no overlap.
3. Build A Collaborative System
Use digital tools or risk management platforms to share data and reports in real-time.
4. Kembangkan Framework Combined Assurance
Develop a framework that aligns assurance roles and regulates the flow of reporting to management or the board.
5. Do Team Training
Ensure that all parties understand the concept, purpose, and process of combined assurance through regular training.
6. Review and evaluate periodically
Conduct periodic evaluations to adapt the framework to changes in organizational structure or new risks.
Challenges in Implementing Combined Assurance
Although it promises many benefits, you may face some challenges when implementing combined assurance, such as:
- Internal resistance due to changes in roles and responsibilities
- Lack of communication between teams
- Non-integrated Data
- Lack of support from top leadership
To overcome these challenges, you need to build a collaborative culture and engage leaders from the early stages of planning.
The Role of Technology in Combined Assurance
Technology plays a major role in supporting the implementation of combined assurance. You can use:
- Platform GRC (Governance, Risk, Compliance): To manage risk and integrate assurance reports.
- Internal audit Software: To store findings and action plans that can be shared with other teams.
- Interactive Dashboard: To present real-time information to management and board.
One solution that you can consider is the service of Audithink's Comprehensive Features, which provides complete features to support the integration of assurance and risk management as a whole.
Effective Assurance Culture: The Key to Combined Assurance Success
Implementing combined assurance will not be optimal without building a strong assurance culture in your organization. Assurance culture reflects the extent to which individuals and teams understand the importance of integrity, accountability, and transparency in every business process. This culture should start at the helm. If the executive demonstrates a commitment to good governance and managed risk, then the team under him will be easier to follow.
Some ways to build an effective assurance culture include:
- Provide regular training about the role and importance of the assurance function
- Encourage open communication between the audit team, compliance, and risk management
- Appreciate audit findings and make it the cornerstone of improvement, not just a formality
- Integrating value assurance in internal policies, recruitment processes, and incentive systems
When the culture of assurance is firmly established, each individual will understand that their job is not only to get the job done, but also to ensure that it is done correctly, according to standards, and can be accounted for. This is the essential foundation that makes combined assurance truly effective and sustainable.
Read Also: Increase efficiency in managing HR with the best HR app
Conclusion, unite forces for the security of your organization
In a fast-paced and risky business world, you need a smarter and more collaborative approach to surveillance.
With combined assurance, you not only save time and costs, but also get an overall picture of the risks and controls in the organization.
Imagine all your assurance, internal audit, compliance, Risk Management teams-working in one integrated system, sharing information with each other, and providing strategic reports to management.
Wondering how technology can help you implement combined assurance more easily? Try the system demo from Audithink's Comprehensive Features today too! Or, contact us directly here.
With Audithink, you can build a strong, efficient, and modern assurance system, for the security and sustainability of your business.
