A quick-start guide to your first Workday audit
Preparing for your first audit after going live with Workday can seem like a daunting task. When you're new to Workday and navigating compliance requirements for the first time, audits – such as IT General Control (ITGC) audits and financial compliance audits like SOX (Sarbanes-Oxley) - require thoughtful planning and robust execution. Here, we outline the key considerations and strategies to successfully engage with the process.
Understanding IT General Controls (ITGC) in a Workday context
ITGCs are the backbone of secure and compliant IT systems, encompassing policies and procedures that ensure the proper management and security of organisational technology. These controls safeguard the integrity, confidentiality, and availability of data and IT services, covering key areas such as:
• Access controls: Ensuring only authorised users can access specific systems and data.
• Change management: Managing updates to IT systems and applications to prevent unauthorised modifications.
• Backup and recovery: Regularly backing up data and maintaining recovery to mitigate data loss or system disruptions.
• System development life cycle (SDLC): Developing and implementing new systems securely and efficiently.
These controls not only mitigate risks but also ensure compliance with regulations like SOX, which demand stricter financial controls, accurate reporting and robust data security. Workday’s unique object-oriented architecture can be a learning curve, especially for auditors accustomed to traditional relational databases.
This guide provides actionable steps for IT and system owners to navigate this shift, align audit scope with ITGC and financial compliance requirements, streamline data consolidation processes, and respond effectively to auditor requests.
Why auditors may find Workday's design challenging
Auditors are typically more familiar with relational databases where data is structured in rows and columns, which can make Workday's object-oriented structure seem confusing. Understanding how Workday handles compliance and reporting requires shifting perspectives from static data pulls to a more dynamic, workflow-based approach. Steps to take:
• Clarify Workday's role: Ensure auditors understand how Workday supports compliance, data governance, and risk management through its object-orientated system.
• Shift focus to risk-based audits: Educate auditors early on to focus on critical areas and reduce unnecessary data requests by aligning their expectations with Workday’s unique design.
Define the audit scope early
A well-defined audit scope is critical to avoiding scope creep and unnecessary strain on resources. Collaborating closely with auditors to establish clear, aligned objectives ensures an efficient and focused audit process. Key actions include:
• Set clear scope and objectives: Work with auditors to identify compliance focus areas, such as internal controls, reporting requirements, and regulatory standards. This ensures expectations and priorities.
• Utilise Workday’s reporting tools: Use targeted reports to generate relevant data and avoid overwhelming auditors with unnecessary information.
• Update your Risk and Controls Matrix (RACM): Regularly refresh your RACM to reflect the latest risks and corresponding controls. This essential tool helps defines the audit scope, identifies relevant risks, and documents the controls designed to mitigate them. It provides auditors with a comprehensive view of your organisation's risk landscape and the strategies in place to manage these risks effectively.
Evaluate the depth and breadth of audit procedures
The audit’s scope - both in terms of depth (detail) and the number of areas (breadth) - affects the resources and effort required from your team. Factors to consider include:
• Review key audit areas: Work with auditors to determine whether they’ll focus on specific processes, like payroll, or a broader range, such as integrations, security groups, and business processes. This will help you prioritise preparation efforts.
• Internal controls and compliance timeframes: Auditors expect organisations to demonstrate robust internal controls that safeguard systems and ensure compliance. Understanding these key controls and their role in audits can help your team prepare effectively. Be prepared to demonstrate key internal controls such as separation of duties, user access reviews, configuration changes and user activity monitoring. Additionally, confirm the time periods auditors want to review to ensure they align with compliance requirements. Broad or deep audits may require extra staffing and time, so plan accordingly.
Assemble and educate your team
Your team plays a vital role in gathering documentation, responding to auditor requests, and addressing any gaps in compliance. Here's how to prepare:
• Collaborate with stakeholders: Involve key departments such as HR, payroll, IT security, and compliance officers, as well as external consultants if needed. An audit is a team effort, so clear communication is essential.
• Educate your team: Hold a pre-audit workshop to familiarise everyone with Workday’s capabilities and assign responsibilities. Identify any readiness gaps and plan accordingly.
• Plan for workload impacts: Audits can be time-consuming. Distribute tasks based on expertise, set clear timelines, and ensure your team is prepared for the increased workload to minimise disruptions.
Leverage Smart Audit, Workday’s preferred audit solution, to simplify preparation
Audits are a critical part of maintaining organisational compliance, but for many teams, they can feel overwhelming and time-consuming. Workday offers tools designed to streamline the process, enhance efficiency, and reduce the risks associated with manual compliance tasks:
• Security and access documentation: Keep your data safe by documenting role-based access, change logs, and security policies.
• Automated compliance checks: Regularly review critical controls to identify gaps before they become problems.
• Seamless audit integrations: Ensure smooth data flow between Workday and third-party systems to maintain transparency and integrity.
Manual auditing can drain time and resources, often creating more questions than answers. Automation changes the game. By automating key compliance tasks, organisations can save time, reduce errors, and focus on what matters most: driving their business forward.
Organisations using Smart Audit, Workday’s preferred auditing solution, are already experiencing the benefits:
• “Smart Audit is a lifesaver. It cut our regular control checks from five days a month to half a day,” shares the Director of Enterprise Business Solutions at OU Health.
• The team at RAND Corporation found that Smart Audit makes the audit process smoother and more transparent: “It gives us a real-time tool for better audit management. It improves efficiency and helps us handle auditor questions.”
By automating compliance and audit preparation, Smart Audit allows teams to stay ahead of challenges, ensuring they’re always ready when it matters most. Whether its aligning with regulatory requirements, detecting risks proactively, or simplifying evidence gathering, automation is helping organisations elevate their audit process to a whole new level.
Gather critical documentation
Well-organised documentation is key for a smooth audit. Ensure you have:
• Security and system documentation: Include access control policies, change management logs, and system configurations (settings, workflows, and security).
• Data management: Document data retention policies and ensure data is consolidated and mapped correctly across systems.
• Report generation: Leverage Workday’s reporting tools to efficiently generate required reports, consolidating financial and HR data for auditors.
• Risk and Control Matrix (RACM): Lists all relevant risks and the control(s) that address each risk.
Strengthening access controls and data security
Auditors will focus on access logs and permissions to ensure data security across your Workday environment. Best practices include:
• Document and review permissions: Regularly audit role-based and user-based access, including proxy policies, to maintain up-to-date access records.
• Automate and pre-empt access reviews: Set up recurring access reviews and provide organised access logs to auditors to avoid delays.
Aligning Workday configurations with regulatory standards
For new Workday users, aligning configurations with regulations like SOX or GDPR can be daunting. Steps to ensure compliance include:
• Review and adjust configurations: Regularly check critical system settings and engage auditors early to align on regulatory standards.
• Leverage Workday compliance templates: Use pre-built templates for SOX, GDPR, etc., to ensure your system meets regulatory requirements.
• Automate compliance checks: Set up automatic checks to validate system settings and prevent last-minute adjustments.
Manage the relationship with auditors
A proactive approach to working with auditors sets a collaborative tone and prevents unnecessary friction. Best practices:
• Initial meetings: Align expectations early by discussing Workday’s structure and a risk-based approach to the audit.
• Push for clarity: Ask auditors to explain the rationale behind their requests, particularly if they appear excessive or misaligned with Workday’s architecture.
• Document agreements: Maintain a record of agreed scope, objectives, and any changes to avoid misunderstandings.
Handling repetitive audit requests
Auditors often require substantial evidence for every transaction, leading to repeated queries. This can be especially overwhelming for smaller teams. Automating and streamlining responses is key to reducing this burden.
Tips for minimising repetitive queries:
• Centralise data access: Use Workday’s reporting tools to create centralised dashboards that auditors can access directly.
• Automate report generation: Set up reports to be automatically generated and easily shared with auditors.
• Focus on high-risk areas: Collaborate with auditors to focus on high-risk areas to minimise excessive queries and ensure efficiency.
• Leverage Workday’s preferred audit solution for automated evidence collection: Smart Audit, with its 150+ out-of-the-box controls, automates evidence collection and validation. This eliminates manual tasks by continuously monitoring transactions and logging control checks. It also provides auditors with detailed, real-time insights into compliance, drastically reducing follow-up requests.
Plan for team impacts
Audits demand significant time and energy from your team. Minimise disruptions by distributing tasks and setting clear timelines.
Steps to minimise disruption:
• Delegate tasks effectively: Assign roles based on expertise to streamline the process.
• Set realistic deadlines: Ensure ample time to gather data and address gaps.
• Streamline communication: Designate a single point of contact to manage all auditor requests, reducing the risk of burnout.
Post-audit lessons learned
After the audit, take time to reflect on what worked and where improvements can be made. This is essential for preparing for future audits. Key takeaways:
• What worked: Identify successful tools, processes, and team efforts.
• What needs improvement: Address gaps and inefficiencies for future audits.
• Future readiness: Use the insights from the audit to enhance your ongoing compliance strategy.
Setting the stage for long-term success
Preparing for your first Workday audit is more than just gathering documentation; it’s about aligning expectations, leveraging Workday’s strengths, and ensuring your team is well-prepared. With careful planning, you’ll not only succeed in your audit but also lay the foundation for ongoing compliance and governance excellence.