A track and trace system that does not deliver damages trust. Internal audit is well equipped to provide assurance across all aspects of such a system in addition to using the concept of traceability to deliver valuable assurance in a variety of contexts.
In 2020, traceability hit the headlines when ‘track and trace’ became one of the Covid-19 mitigation measures. While understanding the interactions of millions of people is a complex technological and societal challenge, traceability is also a straightforward and powerful tool for all internal auditors regardless of sector, size of organisation or scope of internal audit activity.
- What does traceability mean to you?
- Is important to your organisation?
Audit leaders are frequently under pressure to innovate and maintain relevance. Traceability is not a new concept but looking at it through a new lens may reveal opportunities to enhance compliance assurance, improve transparency and think differently about a broad spectrum of risks.
What is traceability?
The National Institute for Standards and Technology (NIST) uses the words “documented unbroken chain” to describe traceability. This cradle to grave approach is one which sits neatly within the remit of independent assurance.
All internal auditors will be familiar with the necessity to follow financial flows, verify transactions and produce an opinion. A general ledger transaction that includes an identification code for a journal entry enables financial traceability.
In many sectors, traceability is central to an organisation’s activities with a plethora of regulations, legislation and industry standards that mandate it. It is a critical element of the assurance provided by internal audit: pharmaceuticals, agriculture, food, healthcare, retail, manufacturing, utilities and financial services to name a few.
This thought leadership piece is not about supply chain traceability; there are a raft of specialist quality auditors and software providers of services that support in-house activities.…