Audit of Business Continuity and Resilience
Today, the business environment is characterized by a high level of risk and uncertainty, where potential risks consist of natural disasters, epidemic diseases, political instability and violence, piracy, hackers' attacks, and others. These disruptions have adverse effects and can paralyze an organization's operations, hence the need for organizations to consider business continuity and business resumption. Thus, when organizations transform themselves into this new environment, the internal audit part of evaluating business continuity plans and resilience initiatives becomes even more relevant. According to Jain & Mannan (2020), internal audits must determine the degree of organizations ready to face the disruption and analyze the business continuity management (BCM) strategies.
The Importance of Business Continuity Audits
Business continuity explains how well an organization can manage its core operations during and after an interruption. In contrast, business continuity defines resilience as an organization's ability to remain functional and continue functioning optimally during and after the occurrence of shocks (Sawalha, 2021). One of the most critical tasks of internal audits is identifying the extent to which these strategies are effectively implemented and sustained.
The audit of business continuity plans is vital since it enables the detection of weaknesses and evaluation of risks and improves the formation of preparedness plans for the firms. Charles (2014) emphasizes that threats in the contemporary world are highly unpredictable; therefore, continuity plans cannot be universal and are always rigid. The auditors must approve such plans and be current and aligned with the organization's risk management framework. This is about the efficiency of the risk assessment, theー business impact analysis, and the adequacy of continuity planning.
The Scope of Business Continuity Audits
Identifying several significant areas that a thorough business continuity and resilience audit should address is crucial. According to Nikraftar (2022), the audit should commence with an evaluation of the business continuity management BCM framework. This involves the assessment of organizational policies, procedures, and business continuity governance structures. Some important considerations include whether the organization has an explicit BCM strategy, the overall risk management objectives, and if there is a form of senior management supervision on the BCM process.
This part of the audit also focuses on the business impact analysis (BIA) and risk assessment procedures being used in the organization. The BIA assists organizations in determining the essential business operations and the consequences of disruption to those operations. Auditors need to determine if the BIA has been done satisfactorily and if it is updated frequently since changes may have occurred to the organization's operations (Jain & Mannan, 2020). In the same regard, auditors need to verify whether the organization's plans for responding to risks took into account all possible threats, from natural disasters to cyber threats.
The audit should also encompass the organization's continuity plans and strategies. This involves analyzing sufficient backup systems, contingency plans, and recovery procedures (Nikraftar, 2022). For instance, the auditors should be able to check whether the organization has prepared adequate disaster recovery solutions for the IT frameworks, whether the organization has put in place other working relations for employees in case of a disruption, and whether the organization has adequate resources to continue significant activities in the event of a disruption.
The Role of Technology in Business Continuity Audits
Technology often supports business continuity and resilience solutions in the contemporary business world. Auditors must also evaluate the practicality and feasibility of technology measures in place, such as the use of cloud services, data backups, and security measures for continuity processes. Further, technology can enrich the audit process by using data analysis, risk assessment, and planning tools.
According to Charlesfs.com, auditors are also required to assess the organization's position on the digital front. This consists of evaluating the solidity of digital resource security, the efficiency of IT business continuity and disaster recovery solutions, and the capacity of organizations to fight against cyber risks (Jain & Mannan, 2020). In the modern business world, the continuity of a business's digital functions is as valuable as the business' physical functions.
Testing and Monitoring Business Continuity Plans
Another essential function of internal auditors is to assess the structure’s testing and monitoring of its business continuity plans. Charles (2014) states that business continuity plans are most valuable when implemented, periodically reviewed, and revised. Auditors need to determine whether the enterprise practices scheduled rehearsals to assess the efficiency of continuity plans and whether any shortcomings detected during the rehearsal are corrected promptly.
Also, the auditors should look into how the organization constantly conducts assessments to address the business continuity risks it faces. This involves assessing the extent to which there is provision for monitoring changes in the risk environment, such as new regulations or risks that have emerged, and evaluating to what extent the continuity plans are updated based on such changes.
Challenges in Auditing Business Continuity and Resilience
There are several difficulties associated with auditing business continuity and resilience. This is due to the dynamics of business environments and the fact that business processes have become complicated. Several businesses are established in different places and regions; therefore, they need to analyze all the risks and design effective continuity programs. According to Sawalha (2021), auditors must collaborate with business units across the organization to ensure that no critical functions are overlooked and that continuity plans are developed on an as-needed basis to suit the organization.
Another issue is that security threats can be constantly changing. For instance, by the onset of the COVID-19 pandemic, organizations had to be ready to deal with unexpected, massive disruptions. The auditors must ensure the organization's continuity plans are adaptable to accommodate new and evolving threats.
Conclusion
The audit of business continuity and resilience is an essential activity because as businesses' prospects become unpredictable, organizations need to know more about how they can survive future shocks. This article states that for business continuity plan auditors, the critical evaluation and verification of BC plans and resilience programs assist organizations in detecting vulnerabilities, enhancing readiness, and guaranteeing sustainability in disruption. In today's environment, where disruptions of all kinds have become the norm, using internal audits to protect a business and its sustainability is precious.
References
Charles, S. (2014). Charles Financial Strategies LLC. Charles Financial Strategies LLC. https://www.charlesfs.com/fractional-audit-services
Jain, P., Pasman, H. J., & Mannan, M. S. (2020). Process system resilience: from risk management to business continuity and sustainability. International Journal of Business Continuity and Risk Management, 10(1), 47-66. https://doi.org/10.1504/IJBCRM.2020.105615
Nikraftar, T., & Hosseini, E. (2022). The effect of auditing on business performance by modulating organizational culture in knowledge-based companies in information technology. https://www.sid.ir/paper/1150055/en
Sawalha, I. H. (2021). Views on business continuity and disaster recovery. International Journal of Emergency Services, 10(3), 351-365. https://www.emerald.com/insight/content/doi/10.1108/IJES-12-2020-0074/full/html