Whether you’re talking about internal audit processes, or any other key process within an enterprise, it is critical for organizations to establish, utilize and maintain sound documented processes. Any organization that fails to do so, or relies on outdated documented processes, or documentation with a sub-par level of detail, puts itself at tremendous risk on a number of fronts.
Why do we need documented processes?
Making the case for flowcharts
Flowcharts are the preferred method of process documentation. After you conduct process discussion meetings, skip the narrative write-up and use your meeting notes to create a flowchart. If you give someone a narrative to review, they tend to skim it—then they say it looks good, or offer minimal comments. If you put the same information into a flowchart, they are more likely to see areas for improvement or expansion.
I like to use flowcharts with swim lanes (see the example below) because each task is assigned to a person. If someone sees that tasks are assigned to them in a flowchart, they will want to make sure they are accurate. If risky areas are assigned to a certain person, they will want to remediate them. Controls are noted throughout the process as well, which allows the reader to get a better understanding of what happens before and after each control, and who performs each step.
I review narratives all the time, and I can easily make a list of process improvement suggestions. But when I take those same narratives and put them into a flowchart, there are so many more questions for me to ask because I can see the red flags so clearly. For example, I can see that there may be no review process for a certain step. Or, there may be segregation of duties issues or missing steps that are evident.
A flowchart should be a simple visual depiction of a process. If it is too complicated, it is not helpful. See below for flowcharting samples that use swim lanes to identify who is responsible for each task.
Creating flowcharts in seven steps
If your organization already has process narratives, but they need to be revised, you can use them as a starting point to create flowcharts. I recommend the following seven steps to help guide your process:
If an organization does not have any documentation for a process, start by determining what sub-processes you want to cover in the flowcharts. Conduct meetings with the people involved in each sub-process and ask them to describe what they do from start to finish. Refer to steps 3-7 above.
Do you have questions about flowcharts, internal audits, accounting or other consulting functions? If you would like more information, please contact Heather Lewis, CPA in our Accounting and Auditing Department at 518-785-0134 or firstname.lastname@example.org.