Quality Auditing: for the Boss An Executive Overview by Dennis R. Arter
Short history of auditing <ul><li>To audit is to hear (cargo being unloaded) </li></ul><ul><li>Financial auditing for the ...
There are only 4 rules!
First rule of auditing: <ul><li>Audits provide information about the future for those who can control the future </li></ul>
General model for auditing Compare Good & Bad Facts Analyze Findings Conclusions Analyze Requirements Evidence Problem  or...
Second rule of auditing: <ul><li>Auditors must be capable of doing their job. (qualified) </li></ul>
Qualification means: <ul><li>Lack of vested interest (see) </li></ul><ul><ul><li>Ownership </li></ul></ul><ul><ul><li>Can'...
The audit team <ul><li>Team leader (lead auditor) </li></ul><ul><ul><li>Greater amount of training </li></ul></ul><ul><ul>...
Auditor certification <ul><li>Local Requirements </li></ul><ul><ul><li>Your own standards </li></ul></ul><ul><ul><li>Audit...
Third rule of auditing: <ul><li>Audits measure to agreed criteria </li></ul>
Performance criteria <ul><li>External to the auditee </li></ul><ul><li>Internal to the auditee </li></ul>External Manual P...
Fourth rule of auditing: <ul><li>Conclusions are based on facts </li></ul>
General model for auditing Compare Good & Bad Facts Analyze Findings Conclusions Analyze Requirements Evidence Problem  or...
Dump the data <ul><li>GOOD </li></ul><ul><li>Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Quisque auctor. Viv...
Sort the data Problem Problem Problem Fact Fact Fact Fact Fact Fact Fact Fact Data Chunking Fact Fact Fact Fact Fact Fact ...
Analyze the data <ul><li>Identify the problem </li></ul><ul><ul><li>The missing control </li></ul></ul><ul><ul><li>subject...
Write the finding <ul><li>Write cause and effect statement </li></ul><ul><ul><li>reason and pain </li></ul></ul><ul><li>Su...
Finding <ul><li>Inability to identify nonconformances throughout the company is resulting in higher internal costs and los...
Focus on the system <ul><li>System: grouping of interrelated processes designed to achieve a common objective. </li></ul><...
Business values <ul><li>Cost </li></ul><ul><li>Production </li></ul><ul><li>Risk </li></ul>Whether for cable companies or ...
Questions
Summary: Value of the audit <ul><li>Audits provide confidence: </li></ul><ul><ul><li>Controls are present </li></ul></ul><...
Summary: Rules for the auditor <ul><li>Auditors must be prepared </li></ul><ul><li>Auditors analyze systems </li></ul><ul>...
Summary: Rules for the audit <ul><li>Audits provide information </li></ul><ul><li>Auditors must be qualified </li></ul><ul...
Improved performance
Thank you for your attention!
Dennis R. Arter, CQA <ul><li>Columbia Audit Resources </li></ul><ul><li>Kennewick, WA </li></ul><ul><li>(509) 783-0377 </l...
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Quality Audits for the Boss

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Brief presentation on the four rules of internal/supplier audits - in Boss language.

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Quality Audits for the Boss

  1. 1. Quality Auditing: for the Boss An Executive Overview by Dennis R. Arter
  2. 2. Short history of auditing <ul><li>To audit is to hear (cargo being unloaded) </li></ul><ul><li>Financial auditing for the Industrial Age </li></ul><ul><li>Quality auditing for military and nuclear </li></ul><ul><li>Quality auditing for all organizations </li></ul><ul><li>Integration with other management systems </li></ul>
  3. 3. There are only 4 rules!
  4. 4. First rule of auditing: <ul><li>Audits provide information about the future for those who can control the future </li></ul>
  5. 5. General model for auditing Compare Good & Bad Facts Analyze Findings Conclusions Analyze Requirements Evidence Problem or Cause/effect Executive Summary External Manuals Procedures Specifications Physical The senses Interviews Paperwork The patterns
  6. 6. Second rule of auditing: <ul><li>Auditors must be capable of doing their job. (qualified) </li></ul>
  7. 7. Qualification means: <ul><li>Lack of vested interest (see) </li></ul><ul><ul><li>Ownership </li></ul></ul><ul><ul><li>Can't audit your own job </li></ul></ul><ul><ul><li>Able to see strengths and weaknesses </li></ul></ul><ul><li>Technical knowledge of processes (understand) </li></ul><ul><ul><li>Read material, receive instruction, visit area </li></ul></ul><ul><ul><li>Must be able to flowchart operations </li></ul></ul><ul><li>Knowledge of audit practices (perform) </li></ul><ul><ul><li>Read a good book </li></ul></ul><ul><ul><li>Attend a class </li></ul></ul><ul><ul><li>On-the-job training </li></ul></ul>
  8. 8. The audit team <ul><li>Team leader (lead auditor) </li></ul><ul><ul><li>Greater amount of training </li></ul></ul><ul><ul><li>Qualified by audit boss </li></ul></ul><ul><li>Team members (auditors) </li></ul><ul><ul><li>Helpers drawn from other departments </li></ul></ul><ul><ul><li>Qualified by team leader </li></ul></ul><ul><li>Typical times </li></ul><ul><ul><li>System audit: 2 to 6 people for 1 to five days </li></ul></ul><ul><ul><li>Process audit: 1 person for 2 hours </li></ul></ul>
  9. 9. Auditor certification <ul><li>Local Requirements </li></ul><ul><ul><li>Your own standards </li></ul></ul><ul><ul><li>Auditing, Technical, Communicators </li></ul></ul><ul><li>Professional Society </li></ul><ul><ul><li>ASQ Certified Quality Auditor </li></ul></ul><ul><li>Conformity Assessment </li></ul>All auditors should have papers
  10. 10. Third rule of auditing: <ul><li>Audits measure to agreed criteria </li></ul>
  11. 11. Performance criteria <ul><li>External to the auditee </li></ul><ul><li>Internal to the auditee </li></ul>External Manual Procedures Specifications
  12. 12. Fourth rule of auditing: <ul><li>Conclusions are based on facts </li></ul>
  13. 13. General model for auditing Compare Good & Bad Facts Analyze Findings Conclusions Analyze Requirements Evidence Problem or Cause/effect Executive Summary External Manuals Procedures Specifications Physical The senses Interviews Paperwork The patterns
  14. 14. Dump the data <ul><li>GOOD </li></ul><ul><li>Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Quisque auctor. Vivamus volutpat ipsum at metus. </li></ul><ul><li>Curabitur non lectus rutrum eros suscipit interdum. Vivamus mattis. Ut porttitor, dui malesuada commodo vehicula, purus nisi imperdiet nibh, et posuere erat dui eu dolor. </li></ul><ul><li>Praesent et velit a urna faucibus ornare. Ut nec justo ut velit consectetuer tincidunt. In gravida lectus et ante. Nullam eros. Ut bibendum purus non magna. </li></ul><ul><li>Nam molestie. Praesent pretium orci in purus. Phasellus massa dui, tincidunt a, dictum sed, posuere vel, lorem. Maecenas et quam. Nullam mi. Proin ac eros. </li></ul><ul><li>Praesent malesuada nunc non risus. Praesent fermentum vehicula libero. Curabitur libero. Ut molestie massa. Suspendisse urna. Vestibulum ante ipsum primis in faucibus orci luctus et ultrices posuere cubilia Curae; Sed nulla. </li></ul><ul><li>Duis in turpis. Nunc lobortis. Ut massa nisl, rhoncus imperdiet, faucibus et, semper et, lectus. Lorem ipsum dolor sit amet, consectetuer adipiscing elit. In hac habitasse platea dictumst. </li></ul><ul><li>Mauris quis nulla sed mauris scelerisque pellentesque. Donec sit amet sem. Proin quis velit. Ut ut erat ut mi viverra adipiscing. Sed sed ante. Integer at dolor. Vivamus porttitor est et dui. Phasellus id dui. </li></ul><ul><li>Integer nonummy. Fusce justo magna, ultricies pretium, rutrum ac, ultrices a, ante. Morbi gravida massa quis elit. Etiam nulla. Cras congue nibh eget metus. Integer varius nulla eget nibh. </li></ul><ul><li>Curabitur dapibus euismod nulla. Class aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos hymenaeos. </li></ul><ul><li>Fusce vehicula erat id ante. Aenean non libero ut tellus scelerisque ultricies. Aenean ac leo fermentum pede porttitor varius. Donec et justo quis nisl faucibus ultricies. In odio. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. </li></ul><ul><li>EVIL </li></ul><ul><li>Fusce fermentum. Morbi tincidunt. Vivamus interdum mi vitae orci. Quisque ut nunc ut nibh vehicula tempus. Nam arcu. Etiam lacus. </li></ul><ul><li>Vestibulum non diam. Sed dictum tincidunt lacus. Aliquam sagittis, diam non volutpat tempus, neque augue viverra augue, vitae condimentum lorem nulla quis felis. </li></ul><ul><li>Donec quis erat. Morbi auctor felis. Nulla diam eros, lobortis vel, rhoncus sed, placerat ac, nulla. Fusce porttitor dui condimentum justo. Vestibulum dolor lacus, consequat blandit, feugiat ac, varius nec, augue. Aliquam et tortor quis quam adipiscing vehicula. </li></ul><ul><li>Ut at sem sit amet ipsum gravida viverra. Quisque dignissim ultricies metus. Fusce ullamcorper. Nullam nec nisl eget nibh convallis molestie. </li></ul><ul><li>Aliquam commodo accumsan leo. Cras ligula. Sed elit ligula, faucibus sit amet, semper et, accumsan quis, neque. Etiam in augue ut nunc tristique consectetuer. </li></ul><ul><li>Vivamus eu eros vestibulum sapien nonummy ullamcorper. Aliquam congue est sed turpis. </li></ul><ul><li>Ut cursus aliquet eros. Aenean sit amet tortor eget ipsum bibendum bibendum. Nunc vel justo sagittis libero iaculis bibendum. </li></ul><ul><li>Donec felis erat, egestas nec, posuere ut, tempor malesuada, quam. Donec arcu nibh, blandit vitae, ullamcorper eu, posuere non, eros. </li></ul><ul><li>Nullam suscipit lobortis dui. Nam ipsum. </li></ul><ul><li>Fusce fermentum. Morbi tincidunt. Vivamus interdum mi vitae orci. Quisque ut nunc ut nibh vehicula tempus. Nam arcu. Etiam lacus. </li></ul><ul><li>Vestibulum non diam. Sed dictum tincidunt lacus. Aliquam sagittis, diam non volutpat tempus, neque augue viverra augue, vitae condimentum lorem nulla quis felis. </li></ul><ul><li>Donec quis erat. Morbi auctor felis. Nulla diam eros, lobortis vel, rhoncus sed, placerat ac, nulla. Fusce porttitor dui condimentum justo. </li></ul>
  15. 15. Sort the data Problem Problem Problem Fact Fact Fact Fact Fact Fact Fact Fact Data Chunking Fact Fact Fact Fact Fact Fact Fact Fact Fact
  16. 16. Analyze the data <ul><li>Identify the problem </li></ul><ul><ul><li>The missing control </li></ul></ul><ul><ul><li>subjective by nature </li></ul></ul><ul><li>Identify the pain </li></ul><ul><ul><li>business issues </li></ul></ul><ul><ul><li>also subjective </li></ul></ul>
  17. 17. Write the finding <ul><li>Write cause and effect statement </li></ul><ul><ul><li>reason and pain </li></ul></ul><ul><li>Support the judgement </li></ul><ul><ul><li>Bad facts from your list </li></ul></ul>
  18. 18. Finding <ul><li>Inability to identify nonconformances throughout the company is resulting in higher internal costs and lost sales. </li></ul><ul><ul><li>Only receiving inspection is presently using the NCR Form (#278). </li></ul></ul><ul><ul><li>Operators filling boxes often have to bend pigtails to get the components to fit in the box. Average time spent for this is 3 minutes per box. </li></ul></ul><ul><ul><li>Pigtail variance on line 3 averaged 1/2 inch on Tuesday. </li></ul></ul><ul><ul><li>Zoom Co. has cut orders by 1/4 due to quality variation (mainly pigtail breaks) in product we ship to them. </li></ul></ul>
  19. 19. Focus on the system <ul><li>System: grouping of interrelated processes designed to achieve a common objective. </li></ul><ul><li>To have lasting effect (improvement), stakeholders must have a desire to change the system </li></ul>
  20. 20. Business values <ul><li>Cost </li></ul><ul><li>Production </li></ul><ul><li>Risk </li></ul>Whether for cable companies or tennis teams, driving forces will always be:
  21. 21. Questions
  22. 22. Summary: Value of the audit <ul><li>Audits provide confidence: </li></ul><ul><ul><li>Controls are present </li></ul></ul><ul><ul><li>Controls are used </li></ul></ul><ul><ul><li>Controls really work </li></ul></ul><ul><ul><li>Controls will continue </li></ul></ul>
  23. 23. Summary: Rules for the auditor <ul><li>Auditors must be prepared </li></ul><ul><li>Auditors analyze systems </li></ul><ul><li>Auditors look for cause and effect </li></ul><ul><li>Auditors support the business (cost, production, risk) </li></ul>
  24. 24. Summary: Rules for the audit <ul><li>Audits provide information </li></ul><ul><li>Auditors must be qualified </li></ul><ul><li>Audits measure to agreed criteria </li></ul><ul><li>Conclusions are based on facts </li></ul>
  25. 25. Improved performance
  26. 26. Thank you for your attention!
  27. 27. Dennis R. Arter, CQA <ul><li>Columbia Audit Resources </li></ul><ul><li>Kennewick, WA </li></ul><ul><li>(509) 783-0377 </li></ul><ul><li>E-Mail: Dennis@auditguy.net </li></ul><ul><li>Web: http://auditguy.net </li></ul><ul><li>Blog: http://auditguy.blogspot.com </li></ul>July 2007
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