Post Implementation Challenges of the Model Audit Rule - Book Report/Review Example

? Post-implementation challenges of the model audit rule Post Implementation Challenges of the Model Audit Rule Introduction The Model Audit Rule is a development by NAIC. Its objective is to ensure that insurers operate within set standards in serving their customers. It helps to reduce governance scandals for corporate and for the restoration and sustainability of investor confidence in regarding negativity of public perception. The Model Audit Rule is designed with several reforms for the elimination of conflicting interests and strengthening internal controls of companies on financial reporting. The design of Model Audit Rule takes to restoring confidence in security markets and customers as well as protecting investor interests (2010 Model Audit Rule Practice Note Subcomittee). It has an oversight of dependency and competence of internal reports and external audit reports from external accounting firms. For insurance industries, continuous regulatory oversights and regular performance of on-site company records examination is always necessary. It is always essential for insurance companies to observe governance standards set for corporate with transparency intentions, restoration of public confidence and prevention of fraud. The success of AMR requires teamwork through hiring of internal control experts, business analysts and IT auditors who can meet internal controls through efficient financial reporting (Dublin, 2011). The idea of introducing new products into the marketplace is an enticement to every company. Growing life expectancy, aging population and demographic changes create an expansion the health insurance market (Dublin, 2011). With the reduction of health benefits by corporations for many retirees, the challenge to insurers is about those who can afford the costs. Commercial insurance is a shrinking market from the effects of the rise in unemployment. New reforms like plans on public health and Medicare expansion are some of the fats that can create reduction of private plan customers (Leon, 2011). Therefore, it is upon payers to adapt to the new changes within the commercial marketplace through the introduction of new models of benefit. This should follow a proactive anticipation of addressing needs of targeted markets like young workers, retirees and the increasing unemployed. Development of new products and improving on existing ones for the attraction of value and quality demands from employers becomes crucial. This is the only way through which consumers in need for good health and longer lives can be achieved (Leon, 2011). Challenges It is never easy to create and adapt to such changes in the current business market at the rate with which competitiveness is growing. A Model Audit Rule therefore, is a great way of ensuring that all processes of change are in control. However, that is never the case as found by many who have used the system before. There are challenges which project teams face in the process of implementation and even afterwards. On most projects, the framework remains a responsibility of the Information Systems team (Jawadekar, 2009).  Using the model audit rule is never an assurance of an end to a project management process. Several challenges present themselves in the course of the process and just by finishing the implementation process is never a confirmation of success. It is never a justification of the reaping of the benefits of the project outcome. For instance, a project can be finished in the effort of establishing a unique and new quality management process for the organization. It is the effort of those under the project to achieve the objectives of the assignment. It is not simply about the delivery of a process; on the contrary, for the delivery of the process addressing a specific need in the business, which you intend to meet. That is what measurers the real success of the project. However, it is never easy to meet the benefits intended by the project delivery. The first challenge which faces the success of the implementation of the model audit rule is lack of adequate knowledge on its implementation process. This creates conflict with teams and implementers as there is always the conflict of interest that affects the process and literally slows it down. This comes because it is never easy for team members to comply to externally exposed stringent standards. A lack of close up becomes a hindrance to the progress of implementation of the Model Audit Rule, it is important for organizations intending to use the rule to adopt a coach. Another challenge is overlooking problems encountered in the process of implementation of the project. These can always act as lessons for future projects and most especially for making improvements in the just finished project. This is necessary because in the completion of a project, constant adjustments become necessary for the maintenance of its progress. Other post implementation challenges are like poor processes of implementation, lack of controls, and no mitigation of relevant associated risks to manageable levels. These weaknesses always need to be in under the knowledge of the IS management in charge of the IT solution implementation. It becomes essential to have the relevant management in the know regarding obstacles met during post implementation process for prompt and relevant corrective action. The dependence of IT solutions on overall IT controls any hitches in the systems cause post implementation challenges. Their prompt reporting becomes highly essential for the examination of problems and formulation of corrections. Post implementation also stays at risk of lack of mitigation reports in the projects recommendations. This, the auditor needs to include in his report to give the post implementation process a chance for easy examination of possible risks. Other post implementation challenges of the audit model rule come about because of deficiency in knowledge in the right procedures to follow during implementation. These can cause problems in the results achieved making the team not to receive the intended results once the process is complete. The compliance/ audit perspective differs from the implementation framework perspectives focused of governance, IT controls and risk management. Therefore, those enterprises beginning with the level of control objectives to achieve compliance purposes must conduct implementation from the level of processes. Doing otherwise causes the need for putting control objectives in position for best achievement of the entire processes. For instance, a control objective chosen for a purpose like Incident Management is Incident Escalation. This leads the team working on the project to ensure that Incident Identification stays in place way before they could implement the escalation process. It is also possible to face the challenge of lack of building of controls for the process whenever a team decides on implementation at the level of control objectives. This reduces the sustainability of the controls and causes problems to the efforts of self testing effectiveness and efficiency. Failure of building controls into the process leads the self test performance area into the pulling and reviewing of very little information for documentation. In turn, this can take several hours and result into serious wastage of time for the compilation of the results of the whole process. The challenge therefore remains on document presentation whenever processes such as quality assurance have processes built into them at the controls. This hinders self testing and presentation of documentation in the end. Dealing with pervasive controls are also a major challenge of post implementation of the Model Audit Rule. Factors such as segregation of access controls and duties must be effectively identified for smooth running of processes. According to previous researches, it becomes advisable for the identification of such controls and incorporating them into each available process. Failure to do so may just lead the implementation process of the audit rule into creating a partial picture that the initial intention of its need. During the implementation processes, another challenge that faces most audit implementation procedures is the effort of working with multiple processes. This creates distraction and results in diversion from the initial intentions of the audit process. The number of processes should therefore be as limited as possible with major focus on results. Process can be introduces in bits following a succession of previously completed ones to give room for focus on each step of their successful implementation. Doing otherwise or working with bulk processes may also turn the whole project into a draining and long one without any signs of achievement in place. This leads to the other challenge that is faced during the post implementation process of the Model Audit Rule. People find motivation from achieved results. When processes become too long, presentation of results take a while to make. This leaves the team derailed through processes and nothing to show. Therefore, instead of the team staying focused on the results, which the project intends to achieve, they in turn focus on the end of the project. Lost focus in the middle of implementation process is very dangerous since the teams motivation defines the overall result achieved. The challenge therefore remains on the team leader to always keep the team focused at all levels of the implementation process (Cascarino, 2011). Communication in turn becomes a vital tool for keeping the team in complete focus. Results of every process completed or underway should be communicated to involved teams. This gives control over the whole procedure and builds confidence in the team making them to stay focused in the success of the project. Failure to communicate effectively through a well defined channel of communication can lead team members to neglect their connectivity with the project. It is important to make them to feel a part of the whole process in order to get the best out of them for the implementation of audit rule processes (Bologlu, 2010). By communicating, information is given to the team and their views get fair representation for the good of implementation process. Lack of information as discussed above presents various resistance behaviors from the team implementing a process. Whenever a project is in the process of implementation of new procedures into a system, creation of mutual responsibility wins the team. Otherwise, the teams’ attitude takes a negative angle and instead of working for the project, they jeopardize the whole process. Therefore, to retain the teams’ attention, constant briefings and flow information is a golden rule for success. This can be done through reports, briefing meetings and visual aid. Adequate communication processes and provision of information saves an implementation process from effects of resistance to change (Bologlu, 2010). Resistance to change is an occurrence that most process introductions faces at one given time. It is merely the responsibility of the project leaders to ensure that the team understands every need for the implementation of the project. Bringing experts from outside face so much resistance and exiting employees feel their jobs, integrity and expertise infringed into. This in most occasions presents the major challenge faced in any implementation process for most companies. It is therefore important for employees to get adequate briefing regarding the reasons for bringing expert auditors from external sources to conduct the process (Bragg, 2010). Alternatively, for the effects of threat from external sources to stay maintained under control so that accurate results can be achieved, it becomes very essential not to hire a whole team of experts into the implementation process of a project but instead, a couch can be hired to train employees to conduct the audits themselves. Working with the internal audit team can result into the achievement of very positive results because instead or retaliation, they reciprocate to trainings in preparation to the audit process. They feel valued by the company for getting the chance to train in manners for furthering their expertise and not bringing of intruders to take their job. Therefore, resistance to change becomes very crucial to deal with from the beginning, so that new procedures do not make present employees to feel the risk of losing their jobs but instead realize a complementation of it (Bragg, 2010). References Bragg, M., S. (2010). Wiley Practitioner's Guide to GAAS 2011: Covering All SASs, SSAEs, SSARSs, and Interpretations. Wiley Practitioner's Guide to GAAS. Wiley Practitioner's Guide to GAAS: Covering All SASs, SSAEs, SSARSs, & Interpretations. Hoboken: John Wiley and Sons. Print.    Bologlu, A. (2010). Implementing SAP R/3 in 21st century: methodology and case studies. India: Marmara University. Cascarino, E., R. (2011). Auditor's Guide to IT Auditing. Wiley Corporate F&A. Hoboken: John Wiley & Sons Dublin, A., J. (2011). The Causes and Consequences of Income Tax Noncompliance. New York. Springer. Print. Jawadekar, (2009). Mgmt Info Sys: Text & Cases. Noida UP, India: Tata McGraw-Hill Education. Print. Leon, D. (2011). Achieving the Single European Sky. Goals and Challenges: Goals and Challenges Nederland’s: Kluwer Law International. Print. 2010 Model Audit Rule Practice Note Subcomittee. A public policy notice, Model Audit Rule. Washington, D.C: American Academy of Actuaries. Read More