Overview of Auditing Process

Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Planning and Preparation

Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Opening Meeting
Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Audit Interviews / Collect Information

Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Closing Meeting
Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Reporting
Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Follow-up and Closure

Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Audit Fundamentals - Agenda

Terms
Audit Purpose
Audit Types
Audit Criteria
Roles & Responsibilities
Liability
QualityGurus.com

Audit
Systematic, independent and
documented process for obtaining audit
evidence and evaluating it objectively to
determine the extent to which the audit
criteria are fulfilled.

QualityGurus.com

Audit
Systematic,
independent and
documented process
for
obtaining audit evidence2 and
evaluating it objectively
to determine the extent to which the audit
criteria1 are fulfilled.
QualityGurus.com

Audit Criteria
Set of policies, procedures or
requirements used as a reference
against which the audit evidence is
compared.

QualityGurus.com

Audit Criteria
Set of policies,
procedures or
requirements
used as a reference
against which the audit evidence2 is
compared.

QualityGurus.com

Audit Evidence
Records, statement of facts or other
information which are relevant to the audit
criteria and verifiable.

QualityGurus.com

Audit Evidence
Records,
statement of facts or
other information
which are relevant to the audit criteria1
and
verifiable.
QualityGurus.com

System, Product and Process Audits

System

Process

Product
QualityGurus.com

Product Audits
Assessment of fitness for use

Products meets the design

requirements
QualityGurus.com

Process Audits
One specific process, activity or
function
To compare the actual process with the
documented requirements of the
process.
QualityGurus.com

System Audits
Comprehensive audit of multiple
processes

Includes the interaction between

processes
QualityGurus.com

System, Product and Process Audits

System

Process

Product
QualityGurus.com

First, Second and Third Party Audits

First
Party

Internal

Second
Party

By Client

Third
Party

By a third party
appointed by client

QualityGurus.com

First Party Audits

Internal audits
Performed within an organization
Auditors have no vested interest in the
area being audited

QualityGurus.com

Second Party Audits

Performed by Customers on suppliers
Before or after awarding a contract

QualityGurus.com

Third Party Audits

Performed by an audit organization
independent of the customer-supplier
relationship

Free from any conflict of interest

QualityGurus.com

First, Second and Third Party Audits

First
Party

Internal

Second
Party

External

Third
Party

External

QualityGurus.com

Benefits of Internal Audits

Identify risks
Identify opportunities for improvement
Verify products fit for use
Procedures exist and are effective
Remedial actions are taken that are
effective
Find the problems before the customer
does
QualityGurus.com

Benefits of Internal Audits

Reduce rework, rejections
Avoid lawsuits by meeting legal / regulatory
needs
Reduced cost
Build customer confidence
Maintain market standing and/or
reputation
Increase sales
QualityGurus.com

Audit Objective, Scope, Criteria

Audit Objectives
what is to be accomplished by the
audit
defined by the audit client.
Audit Scope
extent and boundaries of the audit,
Satisfies the purpose of the audit
Audit Criteria
reference against which conformity is
determined

QualityGurus.com

Audit Objectives
Audit objective should be consistent with
the company objectives.
Audit objectives should be realistic and
achievable
Objective to provide a clear focus for the
audit.
QualityGurus.com

Audit Objectives
Examples of audit programme objectives
include the following:
to meet requirements for certification to a
management system standard;
to verify conformance with contractual
requirements;
to obtain and maintain confidence in the
capability of a supplier;

to contribute to the improvement of the

management system.

QualityGurus.com

Audit Scope
Extent and boundaries of an audit
Clearly defining the audit scope is
important in determining the budget,
human resources, and time required for
the audit
Clear scope of the audit helps increase the
efficiency and effectiveness of the audit.
QualityGurus.com

Audit Criteria
Set of policies, procedures or
requirements used as a reference
against which audit evidences are
compared.

QualityGurus.com

Audit Criteria
Suppliers Quality System
Contracts
Purchase orders
Customer specifications
National or international standards
Industry codes and standards
Laws and regulations

QualityGurus.com

Key Audit Participants

Client
Auditor

Auditee
QualityGurus.com

Audit Participants
Client organization or person
requesting an audit.
Auditor - person who conducts an
audit
Auditee organization or individual
being audited

QualityGurus.com

Client Responsibilities
Initiates audit
Determines audit purpose and
scope
Provide resources
Receives the audit report
Determine the report distribution
Determines actions
QualityGurus.com

Auditor Responsibilities
Understand the purpose, scope and
audit criteria.
Plans the audit
Perform the audit
Collect audit evidences
Analyze audit evidences
Reports the audit
Follows up the action on audit
findings

QualityGurus.com

Auditee Responsibilities
Inform the staff
Provide resources (interview room,
communications and clerical
support)
Provide escorts
Show objective evidence
Co-operate
Determine and initiate corrective
actions

QualityGurus.com

Other Audit Participants

Technical Expert
Observer

Guide
QualityGurus.com

Other Audit Participants

Technical expert - person who provides
specific knowledge or expertise to the
audit team.
Observer person who accompanies
the audit team but does not audit.
Guide - person appointed by auditee to
assist the audit team.
QualityGurus.com

Independence
Auditors are independent when they render impartial
and unbiased judgment in the conduct of audit.
Conflict of interest is a situation in which an internal
auditor has a competing professional or personal
interest.
Audit independence is essentially a state of mind.
Internal auditors can not be physically independent
from the organization they are working for, but they
can always stay objective.
QualityGurus.com

Objectivity
Objectivity is a mental attitude which auditors should
maintain while performing engagements.
The auditor should have an impartial, un-biased
attitude and avoid conflict of interest situations.
It is sometimes described as independence of mind.
auditors are not to accept fees, gifts, or
entertainment that may create the appearance that
the auditor's objectivity has been impaired.

QualityGurus.com

Overview of Auditing Process

Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Planning and Preparation

Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Opening Meeting
Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Audit Interviews / Collect Information

Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Closing Meeting
Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Reporting
Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Follow-up and Closure

Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Audit Programme
Audits are planned and documented
Formal and systematic
Are never informal

QualityGurus.com

Audit Programme
An audit programme shall be planned,
taking into consideration
the status of the processes
importance of the processes
areas to be audited,
the results of previous audits

Frequency also depends on Criticality of

product or service

QualityGurus.com

Audit Resources
The number and composition of the
auditor team depend upon:
Objective, Scope, Depth of audit
Competence of team members
Team work, and ability to interact
effectively with auditee
statutory, regulatory, contractual and
accreditation / certification
requirements,
QualityGurus.com

Audit Resources
The number and composition of the
auditor team depend upon:
Language / cultural issues
Type of audit (System, Process,
Product)
Specific technical expertise
Location of audit
Cost consideration
Time available
QualityGurus.com

Notify Auditee
Advance/formal notice to auditee
Gives auditee an opportunity to get
their house in order
Incentive to improve their control
systems
Letter to auditee Quality manager
and top management
Should cover the requirements of
the audit team

QualityGurus.com

Notify Auditee
Contents of audit notification
General audit objective
Names of audit team and team leader
Official contacts of lead auditor
Time and location of entrance.
Method of distribution of final audit
report.

QualityGurus.com

Notify Auditee
Contents of audit notification
Identification of areas of special
concern
Tentative audit schedule (to be
reconfirmed in the opening meeting)
Documents to be submitted prior to the
audit for review.

QualityGurus.com

Document Review
Review documents (criteria) related to the
auditee organization
Contract, Specifications,
Quality Manual,
Procedures, Guidelines
Organization Charts
Codes and Regulations etc.
Previous audit reports/programs
QualityGurus.com

Document Review
Advantages of in-office review
Gain good understanding of the client
Enable the team to prepare relevant
questions to the client during entrance
meeting.
Help the team to understand well the
criteria (what is to be done; by whom
and when).
Saves the audit investigation time
QualityGurus.com

Identify Potential Risks

Identifying areas for audit emphasis (risk
area). These include:Areas identified/documented in Risk
Register.
Area of high possibility of mismanagement
Where there is large volumes of
transactions.
Where management has expressed
concerns.
Where prior audit disclosed major
weakness/deficiencies.

QualityGurus.com

Determining Auditor Competence

Factors to consider:
Size, nature and complexity of organization
to be audited.
Complexity of the management system to
be audited

QualityGurus.com

Determining Auditor Competence

Personal Behaviour
Auditing Knowledge
Audit principles, procedures and methods
Management system

Technical Knowledge
Contractual requirements
Codes and standards
Discipline / Sector specific
QualityGurus.com

Personal Behaviour
Ethical
Open-minded
Diplomatic
Perceptive
Versatile
Tenacious

Decisive
Self-reliant
Acting with fortitude
Open to
improvement
Culturally sensitive
Collaborative
QualityGurus.com

Negative Characteristics
Argumentative
Opinionated
Over-conclusive
Aggressive
Inconsiderate
Inconsistency

Inflexibility
Lazy
Impractical
Know-it-all
Indecisive

QualityGurus.com

Auditing Knowledge
Plan and organize
Time management
Prioritize and focus on significant issues
Interview, listen, observe and review
documents
Communicate effectively
Understand the risks associated
QualityGurus.com

Management System Knowledge

Knowledge of Management Systems (e.g.
ISO 9001)

QualityGurus.com

Technical Knowledge
Discipline/ Sector specific knowledge
Legal requirements related to sector
Codes and standards
Contract / Purchase Order

QualityGurus.com

Role of Lead Auditor

Balance the strength and weaknesses of
team members
Manage the audit process
Represent the audit team
Lead the audit team
Prepare and complete the audit report

QualityGurus.com

Auditors Evaluation Criteria

Personal Behaviour
Auditing Knowledge
Technical Knowledge
Education
Work experience
Training
Audit Experience

QualityGurus.com

Audit Logistics
Time / location of
Arrival
Opening meeting
Interviews
Closing meeting

Facilities for the audit team

Conference room
Internet connection
Personal Protective Equipment (PPE)

QualityGurus.com

Audit Logistics
Restrictions
Out of bound areas
Use of Camera

Travel
Travel bookings
Hotel
Transport
QualityGurus.com

Checklists
Checklists
are useful
aides-mmoire.

QualityGurus.com

Purpose of the Audit Checklist

Help in time management
Helps in note taking
Memory tool
To ensure that all areas have been
covered
Evidence of audit effectiveness
The checklists should be a good servant,
never the master, of the auditor.
QualityGurus.com

Generic vs Specific Checklists

Generic checklists
Supplement with specific items

Specific Checklists
Prepared for a specific use.

QualityGurus.com

Checklists
Developed by Lead auditor or auditor
Based on audit purpose and scope
Questions should be open-ended
Should have space to record response
Sent to auditee prior to audit, usually at
the time of notification

QualityGurus.com

Scoring vs Non-scoring Checklists

Scoring checklists:
Used for comparison purpose
Score may become goal, bias in marking

Non-scoring checklists:
Good for continuous improvement and are
flexible
QualityGurus.com

Advantages of Checklists
Promotes planning for the audit
Thorough coverage of the scope
Time management during audit
Consistent audit approach
Serves as a memory aid
Objective evidence that audit was
performed
Information base for future audits

QualityGurus.com

Disadvantages of Checklists
Questionnaires narrow the vision
Questionnaires may obstruct
communication
Too strict following of the checklist may
result in omission of important audit
trails
Generic checklists may not add any
value
QualityGurus.com

Auditing Strategy
Trace forward
Trace backward
Random selection

QualityGurus.com

Auditing Strategy
Trace Forward
Examination from beginning to the end
Beneficial to get the whole picture from the start
to finish

Trace Backward
Beginning at the end and working back through
the process
Understanding of end objective is attained right
away
All product records exist

QualityGurus.com

Auditing Strategy
Random Selection
Alternate method instead of tracing

Advantage:
Where time and personnel are limited
Most frequently used
Use of flowchart to identify important steps in
flow
Flexible and saves time

Disadvantage:
Additional note taking
Difficulty in understanding the process flow
Experienced auditor required

QualityGurus.com

Auditing Strategy
Department Audit (or Vertical audit)
Several system elements are audited in a single
department
Saves times (+)
Judges company on management of one
department (-)
Auditor should be very familiar with the
requirements

QualityGurus.com

Auditing Strategy
Element Audit method (Horizontal)
To satisfy elements on checklist several
departments audited
Adequacy of the system is easier for auditor to
judge
More time to trace each element

QualityGurus.com

Opening Meeting
Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Planning
Select the team
Prepare plan
Prepare working documents
Logistics

QualityGurus.com

Notify the Auditee

Audit Plan
Timetable
Checklists

QualityGurus.com

Notify the Audit Team

Dates & duration
Detailed plan
Individual tasks
Results of document review
Any special requirements

QualityGurus.com

Opening Meetings Participants

Auditee senior management (minimum
Management Rep.)
Quality Manager
Audit guides
All audit team participates

Lead Auditor chairs the meeting

QualityGurus.com

Opening Meeting Agenda

Safety topic (evacuation, PPE)
Introduce the team
Objective, scope & criteria
Review audit plan and meeting times
Explain about sampling
Confidentiality
Method of reporting (grading)
QualityGurus.com

Opening Meeting Agenda

Confirm staff aware & available
Confirm resources and facilities
Confirm availability of guides
Reporting on findings
Closing meeting time and location
Questions

QualityGurus.com

Audit Interview / Data Collection

Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Audit Interview / Data Collection

Questioning / Interviewing
Observation / Verification
Document review / verification
Taking Notes
Corroboration
Generate Audit Findings
Prepare Audit Conclusion
QualityGurus.com

Questioning Technique
Questions should:
Yield the relevant information
Should not suggest answers
Should not contain emotive words

QualityGurus.com

Questioning Technique
Ask questions in conversational manner
Weave questions into general
conversation

QualityGurus.com

Questioning Technique
Open questions
Closed questions
Clarifying questions

QualityGurus.com

Open Questions
What? Why? Where? Who? When?
How?
Advantage: Yield informative answer
Limitation: May lead to conversation get
side-tracked!
One way to avoid diluting:
Show me!
QualityGurus.com

Closed Questions
Closed questions - answer: Yes/No
Open questions - answer: few words
Intended to yield very specific
information
Disadvantages:
Do not bring much information
If used too often may create
Impression of cross -examination
QualityGurus.com

Clarifying Questions
Intended to clarify, retrieve full
information and prevent
misunderstanding
Disadvantages:
If used too often may create
impression that you were not listening
Are time-consuming
If you are not prepared to listen in full
dont ask them

QualityGurus.com

Tips for a Successful Audit

Establish suitable climate
Put auditee at ease
Use proper questioning technique
Use open questions and sparingly
closed questions

QualityGurus.com

Observations
Keep observing the physical evidence:
Products
Equipment
Instruments
Conditions
Operations

QualityGurus.com

Observations
What is it used for?
Need it be calibrated?
Was it calibrated?
Is there a record?
What is the reading?
Is the reading within the acceptable
range?
QualityGurus.com

Observations
Identification?
Status with respect to measurement
and monitoring?
Storage location & conditions?

QualityGurus.com

Document Review
Quality Manual
Procedures
Work Instructions
Records

QualityGurus.com

Document Review
Document review to determine the
conformity to the system.

QualityGurus.com

Document Review
Sample of Records:
No time to check everything
Select representative sample
No set percentage
Representation of actions
Cover relevant period
QualityGurus.com

Notes Taking
Explain the need to take notes to
auditee
Make your notes:
Comprehensive
Accurate
Precise
Legible
QualityGurus.com

Notes Taking
Documents:
Title and document number
Revision number
Issue date
Location where seen the document

Part:
Part description
Identification number
QualityGurus.com

Notes Taking
Person:
Name
Title
Department

QualityGurus.com

Corroboration
To strengthen with other evidence, to make
more certain.
More important for data/information which
could be questionable/doubtful.
Confirming or verifying using multiple
sources.

QualityGurus.com

Generate Audit Findings

Evaluate audit evidence against audit
criteria
Audit finding can be conformity or
nonconformity
Nonconformity may be graded
Review with auditee for accuracy of audit
evidence
Review audit findings with audit team at
appropriate stages
QualityGurus.com

Audit Conclusion
Audit team meets prior to the closing
meeting to:
Review audit findings
Agree on audit conclusions
Prepare recommendations, if specified by
audit plan
Discuss audit follow-up
Achievement of audit objective, coverage
of audit scope, and fulfilment of audit
criteria.

QualityGurus.com

Closing Meeting
Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Closing Meeting Participants

Auditee senior management (minimum
Management Rep.)
Quality Manager
Audit guides

All audit team participates

Lead Auditor chairs the meeting
QualityGurus.com

Closing Meeting Agenda

Safety topic
Explain about sampling
Method of reporting (grading)
Process of handling of audit findings
Presentation of audit findings
Draft report
Recommendations?
Any disagreement
QualityGurus.com

Audit Report
Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Audit Report Responsibility

Product of the Audit
The Lead Auditor is responsible for
content, accuracy and submittal in a
timely fashion

QualityGurus.com

Audit Report Ethics

Formal Audit report should begin
immediately after the close-out
meeting, while audit details are fresh.
Findings not from the exit meeting or
not included in the draft audit report.
Pressure from management to alter
the report
QualityGurus.com

Audit Report Timing

Complete as soon as possible
Problems with Formal Report
procrastination

-The longer it is put off, the lesser

interest in pursuing the corrective
actions
-Comes to a backseat because of
more other priorities
-A signal to the auditee management
not important as was initially believed
QualityGurus.com

What not to be included

Confidential or proprietary

information
Subjective opinions
Recommendation
Minor deficiencies discovered and
corrected during the audit (maintain
only in the working papers future
audits)
QualityGurus.com

What not to be included

Name of individual employees
Nit-pick (trivial many)
Emotional or argument statements
Items not presented in the draft
report or exit interview
More than six or seven major findings
QualityGurus.com

Contents
Content of a Standard formal report
format

-Cover sheet
-Main body of the report
-Findings and Observations

QualityGurus.com

Contents
The Cover Sheet

- Audit reference number

- Date of issue
- Company name
- Location
- Area/function audited

QualityGurus.com

Contents
The Cover Sheet

- Name of Auditor / Lead Auditor

- Auditees interviewed
- Audit purpose, scope, criteria
- Distribution list
- An executive summary of findings

QualityGurus.com

Contents
Main Body of the Report
- Strengths or Positive Findings
- Audit findings and evidences
- A statement on the degree to which
the audit criteria have been fulfilled.
- Nonconformities to be addressed.

QualityGurus.com

Contents per ISO 19011:2011

The audit report should provide a
complete, accurate, concise and clear
record of the audit and should
include or refer to the following:
Audit objective
Audit scope
Audit client
Audit team leader & team members
Date and location of the audit activities
Audit criteria
Audit findings
Audit conclusions

QualityGurus.com

Report Retention
Importance of Retaining
Follow up on continuing Corrective
Action success
Developing future checklists
Starting point for the future audits
Potential litigation purpose

QualityGurus.com

Report Retention
How long to retain?
As required by the Audit Program, or
Client
Companys record retention policy

QualityGurus.com

Follow-up and Closure

Planning and
Preparation
Follow-up
and Closure

Opening
Meeting

Reporting

Audit
Interviews
Closing
Meeting

QualityGurus.com

Audit Follow-up
Depending upon the audit objective
auditee undertakes
Correction
Corrective Action
Preventive Action

Within agreed timeframe

QualityGurus.com

Audit Follow-up
Auditee keep audit team informed of
these actions
Completion and effectiveness is verified
Verification may be part of a subsequent
audit.

QualityGurus.com

Audit Closure
Audit is complete when all planned
activities have been carried out, or
agreed with the audit client.
Audit records to be retained or
destroyed. (as per procedure or
applicable requirements)

QualityGurus.com