An internal audit is a process followed by an organization to ensure that they are operating effectively. It covers both the risk management, internal governance and the quality control processes within an organization. Using strong analytical skills, internal auditors look beyond just the financials to consider issues like an organization’s reputation, growth, their impact on the environment and the way staff are treated. Auditors are the one’s helping organizations to succeed, and is a rewarding career path for any students considering this line of work. You can learn a little more in this post on the different types of careers you have available.
For an internal auditor, there are two main roles. Tracking and monitoring the systems and processes that keep the organization on track, and offering consulting and advice to continually improve these two. The goal is to offer independent, and objective advice, and ultimately add value to the operation. Following a strict and disciplined approach is a key component of a good audit, as well as making recommendations and drawing insight from the assessments made of the data and business processes. When you’re new to this field, check out this course and learn how to effectively analyze a business process.
The scope within an organization is quite broad for an internal auditor, and can include any of the following areas:
- Their risk management activities
- The controls that management has in place
- Efficiency and effectiveness of operations
- Financial and management reporting reliability
- Compliance with local laws and regulations
- Proactive fraud assessments
Remember than an internal auditor is not responsible for the execution of all the activities, their job is to advise management and provide a means for them to better execute on their responsibilities. If you wanted to get started on conducting a risk assessment of your company, this course is a fantastic resource. Likewise, determining the effectiveness of quality controls is another task that internal auditors regularly partake in, and you can get an introduction to this field in this course. Building on the example of a quality management system, the following is a checklist to help your audit team get started.
Run through all of these and try to answer every question to the best of your ability. The goal of the audit isn’t to show complete alignment on day one, but to help you identify any areas that perhaps need a little more focus.
- Has the organization established, documented, implemented and maintained a quality management system (QMS)?
- Identify the processes needing to be followed for the QMS, and their application throughout the company.
- Determine the sequence that each process step in the quality system needs to follow.
- What are the criteria and methods needed to ensure an effective operation and control of the QMS?
- Are resources, information and training available to support the process?
- How is the process monitored, measured and analyzed for further improvements?
- Are the recommendations being utilized in continual improvement initiatives?
- How does the organization control the quality, and processes of outsourced components?
- Is there a quality policy listing out all of the objectives to meet?
- Is there a manual for staff to follow, describing the procedures, and sequence of events in the process?
- What system or procedure captures the quality records and performance statistics?
- Has a process been established to store, retrieve, and protect the quality records?
- What procedures are followed when documents need to be updated?
- How do you ensure document updates remain legible, and prevent the use of obsolete documents?
- Is there involvement by top management to communicate the importance of meeting the legal and regulatory requirements of the product, and meet customer requirements?
- What methods are in place to convert customer requirements into actions for better customer satisfaction?
- What steps have been taken to establish both a quality policy and quality objectives?
- Is the quality policy appropriate to the purpose of the organization?
- What commitment has been made to meet the requirements and continually improve the quality policy?
- Is there a framework within the quality policy to establish and review quality objectives?
- Has the quality policy been communicated and understood at all levels of the organization?
- Are the quality objectives measurable?
- What authority and relationships exist to facilitate the quality management process?
- Is there an individual with full authority to ensure the quality processes are established, implemented and maintained?
- Who has responsibility for reporting on the performance of the QMS?
- Are there planned internal reviews of the QMS to ensure its continued suitability, and effectiveness?
- Do these reviews include assessing opportunities for improvement?
- Are the resources in place to implement and run the QMS processes?
- Are the personnel assigned to the QMS competent, in terms of training, skills and experience?
- Is there adequate training for all staff that perform activities affecting product quality?
- How is the effectiveness of the training evaluated and followed up?
- How does the organization ensure staff are aware of their impact in achieving the quality objectives?
- Is the appropriate infrastructure provided to achieve product quality (workspace, equipment, hardware, software and supporting services)?
- Are these facilities well maintained?
- Is the work environment suitable for the operation and successful execution of the quality processes?
- What processes are in place to determine customer requirements, especially product availability, delivery and support?
- How does the organization control the design and development of the products?
- What policy is in place for determining responsibility throughout the design process?
- How do the different teams within an organization interact in the design and development phases?
- What documentation is in place for determining product requirements, and reviewing the same?
- How are incomplete, ambiguous or conflicting requirements identified and resolved?
- How are the design and development results approved prior to product release?
- Are there representatives of the different functions affected by the design and development stages able to participate in product reviews?
- What process exists to collect the results of such reviews, and the follow up on the actions taken?
- What validation is done to confirm the product is capable of meeting the requirements for its intended use?
- If impractical to perform a full validation prior to delivery or implementation, to what extent is a partial validation done?
- What standards are in place to ensure purchased components conform to requirements?
- Define the process through which suppliers are evaluated and selected, and the specific criteria required.
- What steps are taken to calibrate the equipment used in the production process?
- How does the organization obtain information on customer satisfaction/dissatisfaction?
- Has a document been produced that outlines the responsibilities of all parties, the requirements for planning and conducting the review, as well as the criteria, scope and methods to be used in following audits?
- If planned results are not achieved, what steps are followed to make corrective action?
- What data is collected to determine the effectiveness of the QMS and how is it analyzed to identify improvements?
- Are processes in place to ensure the continual improvement of the QMS?
This checklist will get you off to a great start on auditing the processes surrounding the quality of your products. This course has some great advice on specific tools you can use throughout, so check it out and learn how to keep your product quality as high as possible.
The goal of an internal auditor is to add value to a business’s existing operations. The audits they conduct take a systematic approach to look at every single component in a process, and following a disciplined set of guidelines they evaluate where improvements can be made. For a business, they are a godsend, as they often uncover certain areas or improvements that management were previously unaware of. Take the checklist above and see how well your business fares, you may even be surprised at the result!