SECTION - 3

AUDITING SKILLS

Process
Inter-relationship between different convert an input into out put.
Controls Inputs Outputs

activities

to

Process

Resources

Audit A systematic and documented process of objectively obtaining and evaluating the extent of compliance to the documented system. Functional Audit Verification of activities related to a function Process Audit Verification of activities and their inter- relationship related to a process

Auditor One who has the knowledge, skill and competence to conduct the audit.

Auditee One whose is being audited.

Types of Audits
Adequacy Audit : This is conducted through review of the documentation to ensure that all the standard requirements are addressed in the documented system. Compliance Audit: Conducted to check the extent of compliance to the documented system

Types of audits related to compliance audits :

1st Party Audit:

Audit conducted with-in the organization by the employees of the organization Internal Audit
2nd Party Audit:

Audit conducted suppliers

3rd Party Audit:

by

an

organization

on

their

Audit conducted by an out side agency who has no interest in the organization or its suppliers. This type of audit normally leads to certification.

Scope of Audit Documentation which is relevant to the Process / Area being audited Audit Evidence Records, statements, reports etc., of facts or any other information, which is relevant to the audit scope and can be verifiable.

Audit Principles :
Ethical Conduct: Trust, Integrity, Confidentiality and Discretion Fair Presentation: The obligation to report truthfully and accurately Professional Care: The Application of Diligence and Judgment in Auditing Independence: Impartiality of the audit and objectivity of audit conclusions. Evidence: The rational method for reaching reliable and reproducible audit conclusions in a systematic audit approach.

Personal Qualities of Good Auditor :

Ethical- Truthful, Sincere, Honest, Discreet Open Minded- Respect to others ideas Diplomatic Tactful in dealing with people Observant Actively aware of the physical surroundings Perceptive- Instinctively aware of and able to understand situations Tenacious- Focused targets/goals. on achieving the objectives/

Decisive- Conclude in-time based on logical reasoning

Self-Reliant Acts independently while interacting effectively with others

Source of Information :

Interview with employees / management Observation of work activities

Verification of documents & records

Legal , statutory, safety rules & regulations

Fact Finding :

Use Checklists
Select Sample Size Reading the records

Questioning and Listening

Body Language

To and Fro Checking

Communication through :
7% Verbal

38% Verification
55% Body Language

Principles of Communication :
Seek to clarify your ideas before communicating to them Examine the true purpose of communication Consider total human and physical setting both before and during communication Consult with others, communicating where appropriate, before

Whilst communicating be aware of your expression and any overtones as well as your basic message

Collection of Audit Evidence :

Admissible Statements Document reference number, revision no. and date Identifiers Departments Positions Names of Auditees, audit participants

Control of Audit :

Check list is a servant not a master

Investigate to the depth necessary Once the sample colleted is satisfactory then move- on to next Problem; do not panic

Audit Process :

Audit must be positive

Audit should help to improve the systems Non-Conformities are the opportunities for improvement Dont look for blame but look for solutions/ improvements

Writing the Non-Conformity Reports :

Observation : What is the nonconformity [ what]

Explanation: Objective evidence Substantiate the non-conformity[where] to

Attribution: Reference to the documented system [why]

Auditor Qualifications :

Basic Education
Work Experience Knowledge and Experience in relation to the area being audited Skill / Training in Auditing Auditing experience

Auditor Evaluation :

Evaluation is based on :
Time Management Effective collection of audit evidences

Writing the non-conformity reports

Effective closure of non-conformity reports

THANK YOU