Internal Audit? Quality Assurance? Which one do I need?

If you’re having difficulty wrapping your head around developing a compliance management system, think of it like a course in school. There’s homework, presentations and exams, all of which involve research and critical thinking. At some point, an authority figure evaluates your company. You may be assigned a grade, and you’ll face serious consequences if you don’t measure up.

Of course, unlike a class in high school or college, compliance doesn’t have an end date. Nonetheless, there are moments along the way at which you will pass or fail, and—as is the case for every student—it’s up to your organization to sufficiently prepare, because your evaluator is trained to smell BS.

That’s where your internal audit process comes in. If your compliance policy is your textbook, internal audits are tests and a CFPB audit is the final exam. One more analogy for you – your quality assurance processes are your homework. The audits help you see what’s sticking, what areas need work and what corrective measures to take. It’s every opportunity you take to learn and improve.

Here are three questions to ask to ensure your organization is making the most of its homework:

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Just a Reminder: We’re not your lawyer (of course, right?) Remember that this article’s for informational purposes and not intended to provide legal advice.

Do you have a Quality Assurance process?

First, find out whether you have processes in place at all. Quality assurance needs to take place day by day, and it cannot occur automatically or only in someone’s head. If your process can be summed up in a sentiment like “when we find a problem, we’ll fix it,” it’s time to formalize your efforts and adopt a recordable system.

Your QA process should be distinct from audits. Although quality assurance and audits fulfill a similar purpose—and although QA involves internal audits at times—they fundamentally differ in terms of their implementation, executors and stakeholders. Audits are discrete events usually conducted by investigators external to your organization. A QA process, meanwhile, is designed and carried out internally and continuously.

Are your audits and QA independent of your other business processes?

While it’s important for your organization to engineer its QA procedures in-house, the process may exist independent of other operations. Some companies have a manager, team or entire department dedicated to quality assurance; while other companies incorporate QA into certain roles (like customer service or project management), or distribute QA responsibility among every employee.

On the whole, an independent QA process gives you greater control and visibility. Untethered from other processes, QA managers have a better ability to render objective judgments, make swift changes and document the results.

How do you document its results?

Speaking of documentation, your QA process needs to be recordable—and recorded. Just as your overall compliance management system requires documentation to prove its efficacy, so too do your quality assurance efforts. Records increase your capacity to not only monitor and enhance the results of your quality assurance and internal audit procedures, but make it easier to communicate and transfer QA responsibilities between team members.

Have more questions about improving your quality assurance processes or compliance management system? Learn what Compli can do for QA and operations professionals.

Demystifying Your Compliance Program

How do financial institutions gauge the quality of your compliance program?

Join Compli as we help demystify the vetting process lending partners use to evaluate your program.

Thursday, November 17th, 10 AM Pacific

Register Now!