Welcome back to our blog series on preparing for an assessment. In the previous blog, we explored what it takes for a business to prepare for an assessment. Click here to the read last blog in case you missed it. Let’s flip the lens now and examine the same process from an assessor’s point of view.

Why is this shift in perspective important?

While preparing for an assessment the assessor’s perspective is important because while businesses may be focused on ensuring that all the documentation is in place and the teams are aligned, assessors need to walk into the assessment (also referred to as regulatory audits[1] in the daily parlance) with a different mindset – objective, focussed and with a sense of calm. None of these would be possible if you do not have a perfectly defined scope, a well-articulated plan and an organised approach.

Let’s quickly dive into the deeper end of the pool and analyse each of the aspects that we just referred to –

Well-defined scope

As you are preparing for an assessment, understanding business is a key step to defining your scope. A 360-degree view of the business – from publicly available documents; sharing detailed pre-assessment questionnaires to getting onto calls with the client stakeholders – all lead you to your goal of achieving a well-defined scope.

Every business activity and location has its own nuances and when we at Lexplosion try to understand business activities – we go into as much granular details as practicable. For example, the location may be in a forest or coastal area which results in a certain set of laws becoming applicable. Similarly, a raw material going into the manufacturing process might be hazardous and requires special care during handling and storage.

For an assessment to be conducted smoothly, the following aspects need to be clearly identified by the business and the company conducting the assessment:

1. The assessment period: The easiest to understand yet the one which often leads to the most confusion. Let us say, you are conducting an assessment in June and the assessment period is stated as “2 quarters”. When you start reviewing documents, you find documents from September of the previous year. When you point out to the client that the documents should be from October to March, they tell you that they meant the July and October quarters of the previous year. A simple mistake but one that can cause unnecessary stress and waste time.
2. Number of sites to be assessed and its details: This is yet another aspect which while simple on the face of it, often leads to ambiguous situations. Let us take our recent experience with a client who told us that they have one factory in a particular location in Maharashtra. When we started receiving documents, we realised that they bore reference to two different factory license numbers. When we pointed it out, the client explained that these were two factories inside the same compound and they viewed it as one unit. But, here is the challenge, when it comes to the assessor, if there are two separate factory licenses, we need documentary verification of two separate factories being compliant. So while the business might understandably view these as one unit, the assessor needs to wear the regulatory hat and view them as two.
3. Law modules that would be covered: A clear understanding of what laws are covered in each module is imperative to avoid any difference between the business and the assessing team. For example, a client recently told us that they only wanted us to cover operational laws and that laws under the Environment Health and Safety module should be out of scope. However, soon after we started the assessment, they started sharing pollution-related documents. When we pointed this out, they said that pollution was an operational matter for them.
4. Type of compliances to be covered under these modules: As is evident, there are different types of compliances within each law. So, for example, while compliances under the Fire Safety Act of a state might be a part of the scope, whether the assessors responsibility will be restricted to just checking if the fire license is in order or whether they will also need to check if the terms and conditions listed within the license are being complied with, will depend on the types of compliances being covered.
5. The specific checkpoints for the different type of compliances: There are some common checkpoints for all documents, for example checking whether the document pertains to the correct entity or operating unit that is being assessed or whether the document is a valid document during the assessment period or even whether the document is in the format specified by law. However, the points to be checked varies in certain instances as well, for example, if it is a document showing proof of submission of a return, checking whether the document has been stamped by the receiving authority and whether the return was submitted within the statutory timeline, is very important. Listing down these checkpoints as a part of the scope helps the assessors to stay on track and not look at areas which is outside the scope.
6. The sample size: This is an extremely critical aspect, especially when the data set is large. Let us say, there 1500 workmen in a factory. If the assessor is checking if minimum wages are being paid, it is not practical in most cases to check the payment records for all 1500. A clear understanding of the sample size, therefore, becomes vital in making a fair assessment without breaching expected timelines.

Articulated and agreed plan

The next – and probably one of the most important aspects of preparing for an assessment – is to prepare a plan clearly laying down the various steps involved and a step wise bifurcation of responsibilities. However, without timelines, the document does not hold much value, and the assessment may end up dragging on for months to even a year or more, frustrating the business and the assessors alike.

The plan must be validated by the business before being executed so that both parties are on the same page about their respective responsibilities.

Being Organised

The importance of being organised during an assessment is a very under-rated step but you would know the benefits of it only once you have done it.

1. Prepare module wise applicable list of laws
2. Prepare the list of documents that are to be sought under these laws
3. Create a virtual data room for document collection
4. Agree on a simple yet effective folder structure with the assessee for storing and retrieving documents

This folder structure not only helps in accessing documents easily but also in quickly identifying documents which has not been uploaded.

This includes commencing the preliminary review of documents early so that areas where clarity may be required from the client are identified at the initial phases. These clarification sessions help a lot in breaking ice with the site personnel and also in preparing follow up questions better. As discussed in the earlier blog, this is where a deep understanding of the client’s business also assumes a major importance as it showcases that you have done your homework well and helps you engage with the client and ask more relevant questions. Better the understanding of their business, better the questions asked, better the response, better the evaluation of compliance requirement which finally leads to better and more meaningful observations in the final assessment report.

Building a connect

What if you have done all the above steps but have not built a connection with the client? Believe us, the entire assessment experience would not be half as good as it should have been.

Alignment of purpose is also one of the key aspects of having an efficient assessment. Remember, you should be stepping into the client location as their compliance partner who is there to assist them in finding gaps in the current processes so that they can bridge those gaps and mitigate their risks and reduce their chances of facing penal consequences. If you do not build the connect, site personnel may very well compromise on their transparency and only answer specific queries, leaving everything for you to dig up. However, explaining that we are there to achieve a common goal of developing an accountable and real time compliance culture through a collaborative approach, is something that would take you a long way in your interactions. It will definitely help in aligning with all stakeholders and assist you in coming up with pertinent observations and, therefore, a more credible assessment report.

Preparing for an assessment – Conclusion

While preparing for an assessment, the assessor’s approach to an upcoming assessment is something that is as important as the client’s approach towards it. Both aspects need to be in complete sync so that the assessment proves beneficial for the client while ensuring that the assessors do not have to spend inordinate amounts of time and effort to complete each phase of the assessment.

Lexplosion Solutions has been helping businesses across India get audit-ready through structured, on-ground regulatory assessments. Our team works closely with compliance, legal, and site teams to identify gaps, verify documentation, and ensure your processes reflect the compliance you report.

If you’re preparing for an assessment, let’s talk. Get in touch

In the next blog in this series, we will look at the key focus areas for assessors during field visits.

Stay tuned.

[1] From Lexplosion’s standpoint, the term regulatory audits is frequently used—both by us and our clients—to describe regulatory assessments conducted to evaluate compliance with applicable laws and regulations. It is important to clarify that when we use this term, we are not referring to audits that are expressly required under Indian statutory frameworks, such as tax audits under the Income Tax Act, secretarial audits under the Companies Act, or any other legally mandated audits. Instead, our usage pertains to broader compliance checks or reviews initiated either internally or externally to assess an organisation’s adherence to regulatory obligations.

Written by: Soham Thakur

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