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2016 08 Introduction to Internal Audit
- 1. Senthil Kumaran, LeadConsultant Jai Maaruthi Consultaant Introduction to Internal Audit
- 2. Content Introduction Whatis Internal Audit Internal Auditors Who’ll audit Auditees Who’ll be audited Audit Documents What will be audited Audit Plan / Schedule When will be audited Audit venue Where will be audited Audit process How the audit will be conducted Audit Findings Rating and reporting of audit findings Q & A
- 3. Introduction Process ofmonitoring effective implementation of management systems. Part of “Continual Improvement Process” and “Sustainable Development” Tool to identify “Area for Improvement” and “Weakness of the system”. Helps to make “Objective Decisions” based on “Representative Sampling” Helps to prioritise tasks and ensure effective utilisation of resources
- 4. Internal Auditors Competentprofessional, independent of / neutral to process being audited Trained in auditing skills Conducts audit through Document Review / Physical Inspection / Interview Person Makes “Objective Decisions” based on “Representative Sampling”
- 5. Auditees Owners ofprocesses being audited Eg. Department Managers / Engineers / Supervisors / Workers
- 6. Audit Documents ManagementSystem procedures and Records relevant to auditees Customer / vendor provided documents and records Legal and other requirements relevant to auditees processes Department KPIs / Objectives Customer / vendor complaints / Feedback / Audits Previous audit reports / findings / closures
- 7. Audit Plan andSchedule Internal audit Plan depends on the criticality of process and its performance Once or twice a year Schedule - Generally agreed with auditees Duration depends on requirements, response & findings 1 to 3 hours External Audit Once a year – depends on agreement with certification agencies Same above criteria apply
- 8. QEHS Management RepresentativeAuditor / Audit Team Auditee / Dept HOD MANAGEMENT SYSTEM AUDIT PROCESS Prepare Annual Audit Plan Review & Approve the Audit plan Acceptable Prepare Internal Audit Schedule with auditors Review & Approve the Audit schedule Acceptable Prepare audit checklistInform auditors / auditee / company on the schedule Review and Approve the Audit check list Acceptable Conduct the Audit Provide necessary Support & allow auditor to review the documents Report and get concurrence on the audit findings Take corrective & preventive actions and report Verity the corrective preventive action & close the NCRCollect and Record audit findings and reports Review and approve audit findings & ReportsPrepare Executive Audit Report No Yes Yes No No Yes Acceptable Yes No Present Audit report to Top Management and for Discussion in MRM
- 9. Audit Venue Auditeeslocation – across desk or in a meeting room Workshop / work location (site)
- 10. Audit Process DR- Document Review PI - Physical Inspection IP - Interview Person Sampling – Representative, Appropriate and Adequate Collection of evidences for objective decision making
- 11. Audit Findings Findingsare reported as 1. Positive Points 2. Opportunity for Improvement 3. Observation 4. Minor non Conformance 5. Major Non Conformance Item 3 needs to be closed with identified correction and corrective action. Items 4 & 5 need to be closed with identified root cause, correction, corrective and preventive action. Lapse in system implementation Isolated violations from agreed arrangements Points that may lead to NC if unattended Process meets requirement, still can be improved further Actions to be appreciated
- 12. Q & AIt Is A WONDERFUL AUDIENCE