Internal Audits and Third Party Audits

Analysis, Statistics, Control Charts, Statistical Methods, Audit, Auditing

Question

Shouldn’t a company audit its own processes and procedures to ensure compliance before a third-party audit is scheduled?

Answer

Thanks for contacting ASQ’s Ask the Experts Program.  In response to your inquiry, yes, it would be a good idea for the organization to conduct an internal audit before a third party audit is performed, especially if no previous internal audit has been completed.  It’s important to remember that the primary purpose of conducting an internal audit is to assess the continued implementation and effectiveness of the quality management system and its processes.  Not conducting internal audits on a scheduled basis could jeopardize the organization’s ability to maintain its ISO 9001 certification as well as increase the probability of the occurrence of nonconformances and customer complaints.  An internal audit process is an indispensable tool required for the assessment of the QMS, its processes as well as to identify opportunities for improvement.

I hope this helps.

Best regards,

Bill

Bill Aston, Managing Director
Aston Technical Consulting Services, LLC
Website: www.astontechconsult.com

Here’s more information about internal audits.

Internal Lead Auditor/Auditor Qualifications

Audit, audit by exception

Question:

Dear ASQ Associate,

My manager and I have a question about internal lead auditor and auditor qualification. As stated in section 8.2.2 of ISO9001:2008, “the organization shall conduct internal audits at planned intervals to determine whether the quality management system ….”

Our question is this; does the internal lead auditor and auditor have to be certified by an organization, or trained by a certified lead auditor? May a person read ISO19011:2011 and with his/her experiences in his/her field then perform audit tasks as stated in section 8.2.2 of ISO9001:2008? If yes, would an ISO registrar consider it to be a non-conformance finding?

Thank you in advance for taking time to answer our question.

Response:

Thanks for contacting ASQ’s Ask the Experts program.  With regard to your question, it is important to know that ISO 9001:2008 does not prescribe any specific requirements for the qualifications of persons conducting QMS audits.  ISO 19011:2011, provides guidance; not mandatory requirements for determining Auditor qualifications.  As you are aware, an internal audit is one of the most valuable tools that an organization has to determine the effectiveness of its quality management system as well as to identify opportunities for improvement.

For this reason, it is essential that the personnel or consultants used to conduct audit activities, have the qualifications and experienced needed to provide these services.  As a minimum, I would suggest that your internal audit personnel  attend Auditor classroom training accredited by ASQ, RABQSA or IRCA.  This training should be supported by arranging for their participation in future audits as an audit team member.  This audit should preferably be conducted by an individual who has a current certification as an ASQ CQA or an RABQSA or IRCA Lead Auditor.  Another consideration is to ensure that the Lead Auditor can provide an audit log as evidence of his/her past audit experience.  The Lead Auditor should also provide evidence of their continued training to maintain their competency as an Auditor.  Another key point is to ensure that the Lead Auditor has a working knowledge of your organization’s product line, processes or services.  The importance of using trained and experienced Auditors can’t be overstated.

Bill Aston
ASQ Senior Member
Managing Director of Aston Technical Consulting Services
Kingwood, TX
www.astontechconsult.com

For more on this topic, check out these ASQ Resources.

Books:

How to Audit the Process-Based QMS, Second Edition, by Dennis R. Arter, Charles A. Cianfrani, and John E. “Jack” West

The ASQ Auditing Handbook, Fourth Edition, edited by J.P. Russell

The Internal Auditing Pocket Guide, by J.P. Russell

Articles:

Pointed in the Right Direction, by Thea Dunmire

Improving the Internal Audit Experience, by Theresa Wasche

Audit by Exception

Audit, audit by exception

Question:

I would like information regarding the use of the internal auditing method referred to as “audit by exception”. While this method sounds like it may provide a much more efficient use of my time and my Manager’s/employees time, I have no idea how this is accomplished in a manner that can still be compliant and what proof would be deemed acceptable when going through my external RAB certified audit. I am referring specifically to ISO 9001:2008 in regards to auditing. I currently audit every process/process owner every 6 months in a calendar year and it is a full week of audit time each audit. Thank you.

Response:

Thanks for contacting ASQ’s Ask the Expert program. With regard to your inquiry, I suggest that you continue to use an audit methodology that best serves your organization’s requirements. As you are aware, “auditing by exception”, is a practice that is utilized in the financial sector. The terminology “audit exception” in this case, has the same meaning as an “audit finding”. Since internal audits are one of the most important tools that an organization has to assess the effectiveness and continual improvement their quality management system, auditing by exception may not provide the level of information needed to keep your organization’s top management and it’s process owners adequately informed.
In my opinion, an effective internal audit will focus as much on identifying opportunities for improvement (OFI) as documenting audit findings. A robust internal audit report will identify nonconformances, but will equally focus on areas that can be improved or that have improved. To sustain continual improvement of a new or a matured QMS, the process owners and employees must be kept informed and engaged. One of the ways to accomplish this, is to share audit results that report on findings, OFI and the status of objectives or targets that have been established. Auditing by exception, usually will not provide this level of reporting.

Please note, ISO 9001:2008, clause 8.2.2, does not prescribe any particular audit methods to be used for 1st, 2nd or 3rd party audits. Each organization is expected to select audit techniques that best suit the scope and objective of the audit to be conducted.

I hope this helps.

Best regards,

Bill Aston, Managing Director
Aston Technical Consulting Services
Kingwood, Texas

Restructuring an Internal Auditing Program

Reporting, best practices, non-compliance reporting

Q: For the last 15 years, my company has employed a small cadre of full-time, dedicated safety management system auditors.

A current proposal in our company is to recast those auditors as HES Superintendents under the supervision of an operations or safety manager who has significant management responsibility within the safety management system.  This change will give HES Superintendents (persons performing audits) additional, non-audit tasks for performance on the premises of the auditee immediately before, during or after the audits.  Those non-audit tasks could include workforce training, management mentoring and evaluation, facility inspection, etc. In addition, this change will reduce about 50% of the number of audits performed per person in a given time period.

My concerns are as follows:

•  Supervision of the HES Superintendents (especially assignment, evaluation and compensation determination) by an operations manager, safety manager, or someone under their supervision, could constitute auditee control of the audit program, and a thwarting of the principle of auditor independence.

•  The addition of non-audit tasks to auditors’ work seems to open possibilities for audit conflicts of interest. Since HES Superintendents will participate materially in the ongoing safety management of the company, their independence and impartiality as safety management system auditors would be subject to question.

•  The 50% reduction in number of audits per auditor would result in dilution of auditors’ audit experience and therefore their expertise, leading to attenuation of the company’s capability to audit expertly.

In terms of the principles of management system auditing, are my concerns valid?

Do you know of other instances of this part-time-auditor approach being used in high-risk industries?

Any comment on the wisdom of this proposal?

Occasionally, mutiple experts offer their expertise and viewpoints to assist quality practicioners. Add your voice by commenting on posts!

Bill Aston’s take:

A: You’ve mentioned valid concerns that should be assessed by top management prior to restructuring their organization’s audit program.  As I understand your concerns, they include two primary items:

1.    To ensure that the restructure of the audit program continues to provide auditors with independence, objectivity and impartiality from the processes and process owners to be audited.

2.    Potential result of a 50% reduction of the number of audits conducted per auditor diluting auditor experience and expertise.

With regard to the first item, this is a matter that top management should thoroughly evaluate to ensure that the requirements of ISO 9001:2008 — Quality management systems — Requirements, clause 8.2.2b internal audit, continue to be met.  This clause requires that The selection of auditors and conduct of audits shall ensure objectivity and impartiality of the audit process.  Auditors shall not audit their own work.

In addition, although the requirements in ISO 19011:2011– Guidelines for auditing management systems are not auditable requirements, section 3.1, Terms and Definitions, (note 1), does mention the need for ensuring internal auditor independence.

The key point is that your organization’s registrar will most likely look very closely at how the audit program has been restructured to ensure that auditor independence, objectivity and impartiality have been maintained.

Regarding item number two, although maintaining an auditor’s level of expertise and experience are important, the primary purpose of internal audits is to assess the effectiveness and continual improvement of the quality management system and its processes.  If maintaining auditor expertise and experience becomes an issue due to the reduction in the number of available audit assignments, management should consider adjusting the number of auditors needed to meet the actual workload.

As you’re aware, ISO 9001:2008 requires internal audits to be conducted at planned intervals, but it does not prescribe any frequency for performing audits.  So this area is strictly a decision that must be made by each organization to meet their own specific requirements to ensure the continual improvement of the quality management system (QMS).

In summary, ISO 9001:2008, clause 5.4.2b Quality management system planning, requires top management to ensure that the integrity of the quality management system is maintained when changes are planned and implemented.  This includes the restructuring of processes such as the audit program.  Internal audits are one of the most important tools that an organization has to assess the effectiveness and continual improvement of their quality management system.   Therefore, it’s essential that the personnel performing these audits are trained, experienced and independent of the area being audited.

It has been my experience that there are few organizations that maintain a staff of fulltime QMS auditors.  Most organizations utilize staff personnel who are familiar with the processes to be audited and have been trained and are experienced as auditors.  Although they perform audits, this is usually not their only responsibility.  However, in some cases, large organizations may have one or two fulltime auditors who function corporate-wide and are supported by trained and experienced staff personnel on an as needed basis.

I hope this helps.

Bill Aston
ASQ Senior Member
Managing Director of Aston Technical Consulting Services
Kingwood, TX
www.astontechconsult.com

Thea Dunmire’s take:

A: Given that this question involves audits of a safety management system rather than a quality management system, the more applicable standard would likely be OHSAS 18001:2007 Occupational health and safety management systems – not ISO 9001:2008.  However, OHSAS 18001 also specifically states – “Selection of auditors and conduct of audits shall ensure objectivity and the impartiality of the audit process.”  Although OHSAS 18001 does not include the statement – “Auditors should not audit their own work,” that is definitely true.   As a general rule, auditors should not audit activities for which they are responsible or accountable.

It is common for organizations to utilize individuals as internal auditors who have other staff responsibilities.  Few organizations have dedicated environmental, health and safety management system auditors.  Most internal environmental health and safety (EHS) auditors have other responsibilities.  In addition, based on surveys conducted by the Auditing Roundtable, the overall management of the EHS audit program is often located within the EHS department, not in a separate internal audit function.  This can make ensuring the independence of the EHS audit program very challenging.

The important question isn’t whether specific individuals are auditing full or part time. Instead, it is whether all of the auditors utilized within the audit program have the appropriate independence, competence and resources to conduct the audits they have been assigned.  Independence I have discussed above.  By competence, I mean the general knowledge and skills needed for management system auditing (as set out in clause 7.2.3 Possess appropriate knowledge and skills of ISO 19011) as well as technical expertise appropriate for their audit assignments.  By resources, I mean that there is sufficient support, including adequate time, to conduct the individual audits needed to meet the objectives established for the audit program.

Identifying the resources needed for the audit program is one of the key responsibilities of the person assigned the role of audit program manager (as set out in clauses 5.3.1 Perform audit program management tasks and 5.3.6 Identify program resource requirements  of ISO 19011:2011).  Lack of adequate resources is a common weakness of many internal audit programs.  Often, internal audit programs have very broad and expansively-stated objectives, but lack the resources needed to achieve these objectives.  It is the audit program manager’s responsibility to point out this disparity to top management.  The solution is for top management to either adjust the objectives of the audit program, taking into account the policy commitments made by the organization, or provide more resources for the internal audit program.

A key requirement of a safety management system is identifying the organization’s legal and other requirements to which it subscribes.   These identified requirements must be taken into account when establishing management system programs and procedures.  This includes any legal obligations associated with establishing and maintaining internal audit programs.  For example, for organizations subject to the BOEMRE regulations (offshore oil and gas), the Safety Environmental Management System  (SEMS) regulations require that auditors be qualified and independent (see 30 CFR 250.1926).  Legal requirements, as well as the commitments made by the organization in its occupational health and safety policy (or its sustainability reports), must also be taken into account when identifying the resources needed for the EHS audit program.

Internal audits are one of the important ways of assessing the effectiveness of a management system.  The audit program itself should be reviewed to determine its effectiveness in accomplishing this task.  Changes can, and should, be made to internal audit programs but the potential impacts of proposed changes need to be fully assessed in light of the organization’s policy commitments and its legal obligations.

Here is a link to the Auditing Roundtable survey results I mentioned: AR Member Survey Results – Organizational Location of the EHS Audit Program

Thea Dunmire, JD, CIH, CSP
ENLAR Compliance Services, Inc.
http://www.enlar.com/
Largo, FL

Jim Werner’s take:

A: This is indeed a unique question.  I read and re-read this question over and over, and I have come up with the same opinion – “it depends.”  I am assuming “audit” is referring to an independent review of the quality system.  Some places use the term “audit” to mean an inspection activity.  If the past audits have consistently demonstrated the effectiveness of the quality system, then it is appropriate to reduce the number and frequency of the audits.

As far as the re-organization of the staffing of the auditing function – this is a management decision.

Jim Werner
Voting member to the U.S. TAG to ISO TC 176
Medical Device Quality Compliance (MDQC), LLC.
ASQ Senior Member
ASQ CQE, CQA, RABQSA Lead QMS Assessor

Read more open access content about auditing from the ASQ Knowledge Center archive: