One in four audits doesn’t conform with requirements because of insufficient documentation. Given that document auditing is mandatory in many industries, be it healthcare or finances, the scope of the problem is enormous.
Thousands of companies cannot implement proper document management governance and document auditing. They fail to undergo peer reviews, meet regulatory standards, and organize working papers for internal control. With the right records management and document rendering software, their life would be much simpler. Unfortunately, they don’t know how to leverage it.
That’s why we’ve prepared today’s article to guide you on implementing document management governance. Find out more about document auditing and get document management governance tips below.
What Is Document Auditing and a Document Audit Trail?
Document auditing is the process adopted by organizations to ensure their accounting documentation meets the regulatory requirements and can successfully undergo external audits. Document auditing also helps organizations to keep track of financial documentation for their personal needs. For example, they can easily view records to detect any material misstatements or fraudulent activities.
Document auditing consists of multiple processes. To properly run it, a company needs to adopt document rendering and management software, appoint an internal auditor, and create a digital audit trail. The digital audit trail is a chronological record or set of records that provides sequences of business transactions with dates and times. It's proof of all essential financial activities, like invoices, receipts, correspondence from transactions, payroll records, etc.
Challenges of Document Management Governance
The vagueness of document auditing requirements is the primary document management governance challenge. What documentation and a digital audit trail are detailed enough to meet document auditing requirements? Each organization finds the balance itself and can make mistakes.
Here are some other common document management governance challenges:
- Combination of paper and paperless documents. Transition to paperless takes time. Moreover, it won’t suit some organizations that need to use both print and digital records. This complicates document auditing as offline documents don’t always have digital copies and may even get lost.
- Need for a big picture view. To successfully pass an audit, a company needs to collect sufficient documentation and show auditors that everything is recorded and under control. When you handle thousands of documents, you risk having too much dark data.
- Regulatory compliance. To pass the audit, your documentation must be compliant. In such strictly regulated industries as healthcare or finances, it may be tricky.
- Document format and software version conflicts. Compatibility may be an issue when you need to transfer documents from one system to another or after software updates. Hence, it is better to store important documents in a single format, for example, PDF, to simplify data transfers.
To deal with these issues, you will need to carefully map out your document management government practices from the start. This will keep financial documentation in order and facilitate document auditing checks. Find out how to automate a document audit trail and optimize other information management processes in the next section.
7 Tips on Setting up Reliable Document Management Governance and Auditing
For effective document management governance, you need to adopt advanced document management technology and lay down the document auditing rules. To be more specific, you have to:
Tip #1. Research the related regulations
To keep the correct documents and provide sufficient details, you should know the document auditing demands for your case. Find some guidelines on the digital audit trail and other documentation required by PCAOB (Public Company Accounting Oversight Board) here.
Tip #2. Create a document management plan
With a document management governance plan, organizations can set the standards for document creation, storage, processing, and security. You need to decide what document templates and style guides to follow, where to store the documentation (cloud or local servers), and how to protect it. For example, many companies lock all filing cabinets, restrict user access to specific documents, implement two-factor authentication to access the document management systems, etc.
Tip #3. Automate the digital audit trail whenever you can
Manual record-keeping is laborious and unreliable. When people handle all documents manually, they often make mistakes, skip important information, and, most importantly, waste a lot of time. That’s why for efficient document management governance and document auditing, you need automation. Automation solutions can create audit logs, automatically convert documents to the necessary format, store them, send real-time warnings and notifications, create reports, and more.
Tip #4. Use document rendering software to have everything in the same format
Too many data formats lead to dark data and an inaccurate digital audit trail. To avoid this, you should keep all records in the same format by using rendering software. HTML to PDF renderer like Inkit can automatically convert HTML files to PDFs based on triggers, store them, and even deliver to the necessary recipients.
Rendering software improves document management governance and enables you to store all critical documents automatically. You might later need them to back up the audit procedures performed.
Discover what 7 Features an HTML to PDF Converter Should Have
Tip #5. Convert paper documents to electronic records
Transition to paperless documentation simplifies document management governance and creates the digital audit trail. Since all documents are processed online, automated software can track them for better internal control. Besides, you can easily find and retrieve records at any time and use the evidence obtained for document auditing.
Tip #6. Keep both primary audit analysis and supporting audit evidence documentation
For audit quality control, you need to have an initial analysis of an auditor and direct evidence to back up their decision. These two document categories are essential in critical audit documentation (audit working paper) for internal and external audits. They prove that auditors follow the document auditing standards and provide stakeholders with helpful insight.
Tip #7. Run regular internal audit programs for the professional judgment
To have external document checks planned and performed correctly, you should organize internal audits. Such audit programs will allow you to polish internal accounting and financial procedures. When an external auditor comes to your company, you will have well-developed documentation to prove that all your accounting practices are lawful.
Internal checks also offer risk management. You can detect weak spots in document management governance and eliminate them to improve internal record-keeping.
Inkit’s Render for Document Management Governance Automation
Inkit is a reach enablement platform (REP) with document rendering and document management capabilities. Its Render tool automatically converts HTML documents to PDF for record-keeping and delivery. You get copies of all the invoices, bills, customer communications, and other documents with dates and times to use them as a digital audit trail. It’s very convenient for document auditing and document management governance.
Inkit’s Render is designed with top-notch security in mind, making it suitable for processing highly confidential data. It also supports hundreds of integrations and can be added to existing document auditing software through an API for ultimate automation.