Internal Audit Training. Training Objectives. What is an audit? How to prepare for and plan an audit? How to conduct an audit? How to report on an audit? What is audit follow-ups? Contact: nomanaleemft@gmail.com 00923084089243

1. Internal Audit Training

2. TRAINING OBJECTIVE
 What is an audit?
 How to prepare for and plan an audit?
 How to conduct an audit?
 How to report on an audit?
 What is audit follow-ups?
2

3. CONTENTS
 Audit Basics and Definitions
 Audit and Audit Types
 Purpose of the audit
 Audit Process
 Pre-Audit Activities
 Conducting an Audit
 Post-Audit Activities
3

4. AUDIT
“Systematic and independent activity to
determine whether activities and related
results comply with planned arrangements
and whether these arrangements are
implemented effectively and are suitable to
achieve objectives”
4

5. AUDIT SCOPE
Extent and boundaries of the audit including;
 Locations
 Parts of organization
 Processes covered
5

6. AUDIT CRITERIA
Set of policies, procedures or requirements used as
a reference
 Standard e.g. ISO 9001 , ISO 14001 etc.
 Contractual Requirement
 Outsourcer / Buyer Requirement
6

7. OBJECTIVE EVIDENCE
 Factual evidence of differences between the Policies
and associated procedures
 Factual evidence of differences between procedures
and working practices
 Lack of evidence to support implementation
of various standard clauses
 Records or other information
7

8. AUDIT FINDINGS
 Results of the evaluation of the collected audit
evidence against audit criteria.
8

9. AUDITEE
 “Person / Department/ Organization being audited”
9

10. AUDITOR
 “Person with the competence to conduct an audit”
10

11. TYPES OF AUDIT
 First Party Audit
 Second Party Audit
 Third Party Audit
11

12. FIRST PARTY AUDIT
“A formal activity carried out, by organization itself,
against policies and procedures to independently
examine the objective evidence and verify the
compliance or otherwise, with specified standard
requirements”
Examples: Internal Audit
12

13. SECOND PARTY AUDIT
“A formal activity carried out, by an interested
organization on another organization, against
policies and procedures to independently examine
the objective evidence and verify the compliance or
otherwise, with specified standard requirements”
Examples: Customer on Supplier
13

14. THIRD PARTY AUDIT
“A formal activity carried out, by an independent
organization typically for certification, against
policies and procedures to independently examine
the objective evidence and verify the compliance or
otherwise, with specified standard requirements”
Example: Certification Audit
14

15. PURPOSE OF THE AUDIT
Purpose of the audit is :
 To determine the effectiveness of management
system
 To provide opportunity to improve
 To meet requirements for certification
15

16. PURPOSE OF THE AUDIT
16
To Confirm Conformance
Not
To Find Non-Conformance

17. AUDIT PROCESS
Step 1
•Pre-Audit Activities
Step 2
•Audit Activities
Step 3
•Post-Audit Activities
17

18. PRE-AUDIT ACTIVITIES
• Audit
Planning
Step 1
• Audit Team
Selection
Step 2
• Preparation
of Checklists
Step 3
18

19. AUDIT PLANNING & CONTROL SHEET
Sr.
No.
Dept. /
Section
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Remarks
1 Transport
1 2
3 4
2 Finance
19
Box1: Audit Planned
Box2: Audit Performed/Executed
Box3: Corrective Action Taken
Box4: Follow up carried out

20. AUDIT PLAN
 Audit Plan includes;
- Scope
- Criteria
- Dates & duration
- Audit team
- Timetable
- Audit team requirements
- Remember to cover shifts.
20

21. AUDIT PLAN
21
Department to be
Audited
Date
Estimated
Time
Auditor
Ref. Clause
(Optional)
Audit #: ___________
IA Plan

22. AUDIT TEAM SELECTION
 Cross functional team
 Adequate qualification
 Knowledge of the activities being audited
 Internal audit training
22

23. SKILLS REQUIRED IN AUDITORS
 Communication skills
 Interpersonal skills
 Organized
 Observant
 Open-minded
 Diplomatic
23

24. AUDIT CHECKLISTS
 Checklists plan the flow of questions
 Checklists guide the course of the audit
 Checklists define the sample
 Checklists help in writing the report
24

25. AUDIT CHECKLISTS
Purposes of the audit checklists
 To assist memory
 To ensure covering all issues and control points
 Help in time management
 Organize note taking
 Part of audit report
25

26. AUDIT CHECKLISTS
While conducting the audit, an auditor may use the
checklist to;
- Write down his observations during the audit
- Write down his suggestions (if any)
- Verify different clauses and their applicability
- Check compliance status of standard against different
clauses of the standard
26

27. AUDIT CHECKLISTS
Audit Checklist should NOT
-Restrict auditor’s inquiry
-Be completely generic
-Be yes/no lists
27

28. Audit Checklists
To create Audit Checklist
28
Who do I want to talk to?
What am I looking for?
What will I ask?
Individual
Documents
Questions on checklist

29. AUDIT ACTIVITIES
Step 1 • Audit Opening Meeting
Step 2 • Evaluating Objective Evidence
Step 3 • Audit Closing Meeting
29

30. AUDIT OPENING MEETING
 Audit Opening Meeting is held to;
-Communicate audit plan and audit activities
-Communicate purpose of the audit
-Discuss pre-audit queries and points
-Discuss arrangements for the audit
-Create an atmosphere of cooperation between auditors
and auditee
Quality Management Systems.9000 30

31. AUDIT OPENING MEETING
 Agenda of opening meeting is
- Introduce the team
- Define scope & criteria
- Review audit plan
- Confidentiality
- Method of reporting
- Grading of NCR’s
- Confirm staff aware & available
- Confirm logistics
- Questions
Quality Management Systems.9000 31

32. AUDIT EXECUTION
See
Quality Management Systems.9000 32
Defined Policies
/Procedures
/Work Instructions
?
=
Work Practices

33. AUDIT EXECUTION
Quality Management Systems.9000 33
 Review documents
 Check records
 Interview people
 Observe people working
 Evaluate physical environment

34. SAMPLING TECHNIQUES
Items affecting sampling:
 Size of the organization
 Number of competent auditors
 Frequency of audits during the year
 Duration of individual audit
 Any externally required confidence level
34

35. SAMPLING TECHNIQUES
EXAMPLES
 5% of the total product reports generated
 Competency records of 10% of the total workforce
 50% records of day time operations & 50% records
of night time operations
 70% records from 1st and last week of the month
and 30% records from 2nd and 3rd week
35

36. COLLECT OBJECTIVE EVIDENCE
Objective Evidence may be
 documented
 based on interview
 based on observation
 quantitative
 qualitative
It should be verifiable.
36

37. TYPES OF EVIDENCE
 Conforming Evidence
 Non-Conformance
-Minor
-Major
 Observation
-That can lead to NC or area of improvement
37

38. TYPES OF NC
 Minor NC
-Isolated laps
-Non-systematic failure
 Major NC
-System element is missing
-System element is not implemented
• No system of IA, Trainings, Document Control, Filling
System etc.
38

39. NON-CONFORMITY STATEMENT
 Problem: What is the problem
 Requirement: What is required
 Reference: Give reference (SOP/
Procedure, Manual, Standard )
39

40. NON-CONFORMITY STATEMENT
 Writing a Non-Conformity Statement : 4C
 Clear … Simple language
 Correct … Objective
 Complete … Traceable
 Concise
-What happened?
-What should happen?
40

41. NC EXAMPLE 1
 Develop NC from the scenario given below
-Persons without lab coats in the laboratory
41
Chemical Testing Lab
Lab SOP
(CTL/051)
require all
persons in the
Lab should
wear Lab
coats

42. NON-CONFORMITY STATEMENT
 Problem: During the audit it was observed that
in CTL 2 out of 4 persons present were not
wearing Lab coats
 Requirement: Lab SOP requires all persons in
Lab to wear Lab Coats
 Reference: SOP/CTL/051
42

43. AUDIT CLOSING MEETING
 A Closing Meeting is held to
 Review the findings
 Identify next steps
- Corrective Actions
- Preventive Actions
- Follow up Visit(s)
43

44. AUDIT CLOSING MEETING
Agenda of closing meeting is
 Thank the auditee
 Recap scope & criteria
 Report NC’s & observations , positive & negative
 Overall summary
 Questions & answers
 Corrective actions & time-scale
 Recommendation
 Follow-up
44

45. POST AUDIT ACTIVITIES
Step 1
•Audit Reporting
Step 2
•Audit Closure and Follow up
45

46. AUDIT REPORT
 An Audit Report is prepared based on audit findings.
 This report shall contain
- Audit Scope
- Date
- Audit Findings
- NCs and Observations
- Signature of MR
46

47. INTERNAL AUDIT REPORT
Ref.
No.
Area/
Dept
Audit Observation
Clause/
Doc. Ref
Status
(NC /Obs.)
47
Audit #: _____________________ held on: ________________

48. CORRECTIVE ACTION
“ Action taken to eliminate the cause(s) of a detected
nonconformity, defer or other undesirable situation in
order to prevent recurrence.”
48

49. AUDIT FOLLOW UP
 Re-audit on the site
 Review of documentary evidence
-Revised procedure
-Training records
-Photographs, etc.
 Exchange of correspondence
 Close NCR
49

50. THANK YOU
ANY QUESTIONS
50