Effective Internal Audits

When effectively implemented, internal auditing can be considered the most important tool in your business management system. It’s the primary method for continuously monitoring a company’s business management system (BMS). In fact, the feedback from internal auditing is critical to the growth of business effectiveness and the standardization of effective processes.

Through an audit, an organization can identify a system’s ineffectiveness, take corrective action, and ultimately support continuous improvement. Unfortunately, a poorly deployed internal auditing system can lead to increased nonvalue-added costs, many hours of wasted human resources, and a BMS breakdown.

The following is an example of a common pitfall to poor and ineffective internal audit deployment: Not understanding the definition of, and not basing audits on status and importance.

Status and importance can be interpreted differently, but their intent is often misunderstood. Status can be defined as how a particular department, discipline, facility, or process is performing against established policies, goals, objectives, and expectations.

Some questions to ask when considering status include:

  • What are the performance indicators for an area, group, or department reflecting?
  • What does the performance history indicate?
  • Have these indicators been the result of root cause corrective actions? Are they recurring?
  • Have there been changes in process, equipment, personnel, or management?
  • Has the area or department been restructured or reorganized?

When scheduling internal audits, consider other important aspects such as:

  • What’s been the past performance history?
  • Are there any new employees, equipment, or management personnel?
  • How effective is the training system?
  • What do past audit results indicate?
  • How critical is that area? (risk or customer touch point).

When you build your company audit plan on status and importance your focus is process oriented, not checklist mandated. Truly effective audits don’t just concentrate on process weakness, but on process potential.

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