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Actual for You - Energizing Your Internal Audit Program
I would like to say that, the biggest room in the world is the room for improvement. I believe everyone wants to constantly improve. I believe each one of us is created as perfection; however, the results we create are excellent, so there is lots of room for improvement in what we do. The associates I hired in my bicycle and lawnmower shop like myself, were never perfect; however, they were excellent. Working with them as they improved taught me new ways to show forgiveness, understanding, and patience.My first employee was in a wheelchair from an auto accident that happened when he was sixteen. I hired him to answer the telephone and talk to customers who came into the store. My second employee had one arm. Word spread that I hired people with physical challenges. The placement officer at a local community college with a rehabilitation school called on my business about hiring people with physical and mental limitations. One day the placement officer asked me to interview a young man who was having trouble finding a job. He told me that David was a little shy, did not talk much and was afraid to go on interviews. He requested that I grant David an interview just for practice. He plainly told David that I had no positions open at the time and the interview was just for practice.When David came in for the interview, he hardly said a word. I told him what we do at the bicycle Shop and showed him around. When the interview was over I told him I would keep his application on file. Then I took a few minutes to coach David on how to apply for a job. I told David to keep showing up (figuratively) because the number one thing an employer wants in an associate is dependability.David was very quiet (he was evaluated as a slow learner in school). Every ten days or so, for weeks after the interview, David walked into the bicycle shop and stood by the front door. He never said a word, just stood by the door. I would tell him kindly, "I really do not have any posi
Resources:
These are the items used or consumed in the process activity. It could be people’s time, machine time or money. For our example, the resources would be the buyer or purchasing agent, money, the representative for the company supplying the product or service and possibly other support functions who have input for the purchase. Additional resources are in the form of computers, material planning software, phones, fax, office space, etc.
Customer:
The customer is the group that takes the output and uses it. It is most likely used as an input to another process or as a resource.
Feedback Loop:
This is the mechanism used to monitor the process. What metric is used to tell the process owner how the process is performing and when action needs to be taken to correct it. For a purchasing process it could be supplier performance, dollars spent, on-time delivery or receiving inspection information.
2. Identify the Interfaces to the Standard
The interface
Don't let anyone talk you into going to college when all you really want to do is be a chef or tear apart a car engine.Some times our society pushes the wrong thing on us. You have to say no way! If you really want to learn a trade instead of college, just do it.Many people make a great living working with their hands in some kind of trade. Are you a good problem solver? Then maybe being an automotive tech or electrician would work for you.Or you are creative and really know how to put color and form together into something beautiful. Try design or graphic arts or drafting or even landscaping.Getting trained in a trade will give you confidence and allow you to find a great job. Employers want trained people. Give them what they want and you'll get want you want. Having a skill set is like having money in your wallet, you can lose!So many people are stuck in boring jobs because they didn't take the time to find out what is out there. They just fell into some job and all of a sudden that's their career. You're going to spend at least one third of your life working. You need to take time and consider what you want to do.Do some research and see if there is a perfect career fit for you. Don't you want to go through life loving your occupation instead of dreading the job?
The key to an effective, thorough and value added internal audit is in the preparation. If internal auditors are spending one to two hours preparing for an internal audit, it is not enough time. To properly prepare for an audit, it should take twice to three times that. If the actual audit time will take an hour, there should be at between two and three hours spent in preparation. A good rule of thumb to spend about two and half times as much time in preparation as the audit will take. Often times, auditors plan for a two hour internal audit and spend 1 hour preparing which leads to them running out of questions about 30 minutes into the audit. I can’t stress this enough if you want to be a successful internal auditor or manage a successful internal audit program then make certain you spend adequate time in preparation for the audit.
This sounds easy, but it is actually very difficult. The major obstacles to allocating enough time for preparation are time restrictions placed on the internal auditors. Chances are they have other responsibilities aside from internal auditing that compete for their precious time. One method to help remove that obstacle is to have as many trained internal auditors as possible to spread the work load.
Effective planning for an internal audit requires following a few simple steps that are listed below.
1. Learn the process (turtle diagram)
2. Identify the interfaces with the standard
3. Document review (compliance to standard)
4. Identify process interfaces
5. Identify potential process failure modes (pFMEA)
6. Value stream map process to breakdown activities
7. Review old audits
8. Develop audit questions
9. Develop audit plan.
1. Learn the process
Before you can audit a process you must become familiar with it. You need to learn how it is supposed to work, what it supposed to do, what are the inputs, outputs, activities, resources and controls. The first step would be to create a turtle diagram of the process (This may have already been done by the organization as part of their documentation, or in previous audits). A turtle diagram looks at the suppliers, inputs, activities, controls, resources, outputs, and customers. A turtle diagram is laid out such that the process activity is a box in the middle, the inputs come in from the left and outputs exit from the right of the box. The supplier is listed in the upper left hand corner and the customer is listed in the upper right hand corner. The controls are above the process activity and the resources are below the process activity. The feedback loop is an arrow from the output to the input. Let’s do an example of a turtle diagram for a process. For this example, the process will be one that applies to about every business in some way and that’s purchasing.
Inputs:
This is what the process needs for the activity. It can be in the form of information or a product. For this example the inputs are: Demand (what is driving the purchase), Quantity, Type, Specifications and Requirements, Due date and Budget (how much can be spent).
Supplier:
This is who is supplying the inputs to the process. The supplier can supply information or a material product. For our example the supplier would be whoever is specifying what to purchase, when to purchase and how many to purchase.
Process Activity:
This is the process. There are a number of associated tasks contributing to the process. For our example the process activity is purchasing
Outputs:
This is the result of the process. It can be information, energy or material. In our example the output of the purchasing process is the desired product or service delivered when needed. For our example it could be a product like a computer or piece of test equipment. It could be information such as a failure analysis, training materials, book or manual. It could also be a service such as mowing the grass, doing the laundry or processing payroll.
Controls:
These are the items that regulate the rate at which inputs are converted to outputs. Without controls, the process would operate continuously generating the output. The controls for our example could be the material requirements planning software, the purchase requisition approval process and inventory analysis.
Resources:
These are the items used or consumed in the process activity. It could be people’s time, machine time or money. For our example, the resources would be the buyer or purchasing agent, money, the representative for the company supplying the product or service and possibly other support functions who have input for the purchase. Additional resources are in the form of computers, material planning software, phones, fax, office space, etc.
Customer:
The customer is the group that takes the output and uses it. It is most likely used as an input to another process or as a resource.
Feedback Loop:
This is the mechanism used to monitor the process. What metric is used to tell the process owner how the process is performing and when action needs to be taken to correct it. For a purchasing process it could be supplier performance, dollars spent, on-time delivery or receiving inspection information.
2. Identify the Interfaces to the Standard
The interfaces
If you are going to become a small business entrepreneur, you are on your way to rapid wealth. Congratulations on your decision. There is a ton of excess intrinsic value to be found in small businesses and people can be negotiated with very effectively.Not unlike the main character in "Pretty Woman" Richard Gere (And Julia Roberts) He is portrayed as a heartless take over pirate, stripping a businesses assets for fast millions. Yes, John was a small business entrepreneur. On the scale you may be currently operating, the similarity pales a little. But earning over $1 million within a year is nothing to be turned down.An associate of mine is an opportunity investor as I am and his specialization is small businesses and in his first year he stripped and sold over $10 million in assets. The reason why Adrian does so well for himself is because an armed entrepreneur (with information) easily dominates the players in the transaction-the business broker and the small business vendor.This is hard core. Its of course legal and ethical but it is certainly not a path for everyone. There certainly needs to be a little bit of indifference to feelings and a strong bias against emotional plea's present. People who are drawn to being a small business entrepreneur are generally "alpha type personalities" They love a challenge and love the thrust and parry of the typical small business transaction.Adrian typically begins his proposed take over and strip by becoming a customer or client of the target business. Incognito so to speak. He assesses and makes the decision of whether the business has any immediate problems that can be easily and rapidly fixed so cash flow instantly rises (Believe me, this is a very common occurrence) In this case he would spend more time on it and build up the cash flow for a very fat ripe final re-sale price.On the other hand if the business has too many complicated problems that cannot be resolved with simple measures, then he t
Effective planning for an internal audit requires following a few simple steps that are listed below.
1. Learn the process (turtle diagram)
2. Identify the interfaces with the standard
3. Document review (compliance to standard)
4. Identify process interfaces
5. Identify potential process failure modes (pFMEA)
6. Value stream map process to breakdown activities
7. Review old audits
8. Develop audit questions
9. Develop audit plan.
1. Learn the process
Before you can audit a process you must become familiar with it. You need to learn how it is supposed to work, what it supposed to do, what are the inputs, outputs, activities, resources and controls. The first step would be to create a turtle diagram of the process (This may have already been done by the organization as part of their documentation, or in previous audits). A turtle diagram looks at the suppliers, inputs, activities, controls, resources, outputs, and customers. A turtle diagram is laid out such that the process activity is a box in the middle, the inputs come in from the left and outputs exit from the right of the box. The supplier is listed in the upper left hand corner and the customer is listed in the upper right hand corner. The controls are above the process activity and the resources are below the process activity. The feedback loop is an arrow from the output to the input. Let’s do an example of a turtle diagram for a process. For this example, the process will be one that applies to about every business in some way and that’s purchasing.
Inputs:
This is what the process needs for the activity. It can be in the form of information or a product. For this example the inputs are: Demand (what is driving the purchase), Quantity, Type, Specifications and Requirements, Due date and Budget (how much can be spent).
Supplier:
This is who is supplying the inputs to the process. The supplier can supply information or a material product. For our example the supplier would be whoever is specifying what to purchase, when to purchase and how many to purchase.
Process Activity:
This is the process. There are a number of associated tasks contributing to the process. For our example the process activity is purchasing
Outputs:
This is the result of the process. It can be information, energy or material. In our example the output of the purchasing process is the desired product or service delivered when needed. For our example it could be a product like a computer or piece of test equipment. It could be information such as a failure analysis, training materials, book or manual. It could also be a service such as mowing the grass, doing the laundry or processing payroll.
Controls:
These are the items that regulate the rate at which inputs are converted to outputs. Without controls, the process would operate continuously generating the output. The controls for our example could be the material requirements planning software, the purchase requisition approval process and inventory analysis.
Resources:
These are the items used or consumed in the process activity. It could be people’s time, machine time or money. For our example, the resources would be the buyer or purchasing agent, money, the representative for the company supplying the product or service and possibly other support functions who have input for the purchase. Additional resources are in the form of computers, material planning software, phones, fax, office space, etc.
Customer:
The customer is the group that takes the output and uses it. It is most likely used as an input to another process or as a resource.
Feedback Loop:
This is the mechanism used to monitor the process. What metric is used to tell the process owner how the process is performing and when action needs to be taken to correct it. For a purchasing process it could be supplier performance, dollars spent, on-time delivery or receiving inspection information.
2. Identify the Interfaces to the Standard
The interface
Going to the local shopping or outlet mall has proven in these past years to be a favorite pastime for many. Often, people will buy what they need, what they must have, or simply dream about purchasing items through what is known as window shopping.In addition, like most things, there has been a continual change in ways that shoppers can shop. This metamorphosis has seen the shopper go from bustling downtown shops to enclosed malls.Now, through modern technology, the shopper can simply log onto the internet and shop countless stores for that particular item and at the right price. With the click of the computer mouse that product can be delivered without the person ever having to leave the comfort of their home.With this convenient way of purchasing products that are available it was only a matter of time that this process would be transferred to the non-profit world. This system of supporting a charity is through the use of an online fundraising business. If wishing to support charitable work in this way it is important to know what is an online fundraising business and what are the associated benefits.What Is An Online Fundraising Business?An online fundraising business is an internet based business that enters into agreements with schools, charities, service clubs and other organizations. Through an online fundraising business the efforts of the fundraising group are streamlined and become more productive.For example, a school wishes to sell greeting cards to help raise money for band uniforms. The agreement is entered into with the music department and the online fundraising business. Once the agreement is entered into, the fundraising effort is announced along with the address of the website. Those wishing to support this cause simply access the internet site, view the products available, order their greeting cards, pay for the transaction and wait for their product to be delivered.BenefitsThere are many benefits
Inputs:
This is what the process needs for the activity. It can be in the form of information or a product. For this example the inputs are: Demand (what is driving the purchase), Quantity, Type, Specifications and Requirements, Due date and Budget (how much can be spent).
Supplier:
This is who is supplying the inputs to the process. The supplier can supply information or a material product. For our example the supplier would be whoever is specifying what to purchase, when to purchase and how many to purchase.
Process Activity:
This is the process. There are a number of associated tasks contributing to the process. For our example the process activity is purchasing
Outputs:
This is the result of the process. It can be information, energy or material. In our example the output of the purchasing process is the desired product or service delivered when needed. For our example it could be a product like a computer or piece of test equipment. It could be information such as a failure analysis, training materials, book or manual. It could also be a service such as mowing the grass, doing the laundry or processing payroll.
Controls:
These are the items that regulate the rate at which inputs are converted to outputs. Without controls, the process would operate continuously generating the output. The controls for our example could be the material requirements planning software, the purchase requisition approval process and inventory analysis.
Resources:
These are the items used or consumed in the process activity. It could be people’s time, machine time or money. For our example, the resources would be the buyer or purchasing agent, money, the representative for the company supplying the product or service and possibly other support functions who have input for the purchase. Additional resources are in the form of computers, material planning software, phones, fax, office space, etc.
Customer:
The customer is the group that takes the output and uses it. It is most likely used as an input to another process or as a resource.
Feedback Loop:
This is the mechanism used to monitor the process. What metric is used to tell the process owner how the process is performing and when action needs to be taken to correct it. For a purchasing process it could be supplier performance, dollars spent, on-time delivery or receiving inspection information.
2. Identify the Interfaces to the Standard
The interface
Typical methods of advertising-newspapers, radio and television are effective if used properly, but there are other, less expensive ways to get your company's name out. Local or cable television is an inexpensive alternative to the traditional forms of advertising. Even if you have no experience advertising in this medium, there are companies who specialize in lending a helping hand. Even if finances are a concern (as they are for most of us), you'll be surprised to discover a 30 second spot television ad can cost as little as a few hundred dollars. Many areas have public auctions on local stations that will advertise your product, if you donate up to a certain dollar amount. The number of advertising spots will depend on how much you donate. Remember also to send press releases to your local television and radio stations. Many times they will come out and do a story on you, if it is of interest to the public. We volunteered to do resumes for people out of work and sent releases to all the radio and television stations. One of the three major networks in our area, sent someone out to interview us, and we were on the 6 and 11 o'clock news. As for radio advertising, check your local stations for rates. You'll be surprised at how low some of them are. Again, if you send press releases to the stations, sometimes they will call you as an expert in your area, or for an interview. We sent releases to all the stations in our area when we started our support group, and this generated three times the number of people we expected for our first meeting. Since most major newspapers are expensive to advertise in, check with the smaller local papers. You can advertise in many of these for as little as $25 a month. You could also offer to write a column for these publications, as an expert in the area, if appropriate. We all need to advertise in one way or another. Which medium you choose will depend on your particular business.
Process Activity:
This is the process. There are a number of associated tasks contributing to the process. For our example the process activity is purchasing
Outputs:
This is the result of the process. It can be information, energy or material. In our example the output of the purchasing process is the desired product or service delivered when needed. For our example it could be a product like a computer or piece of test equipment. It could be information such as a failure analysis, training materials, book or manual. It could also be a service such as mowing the grass, doing the laundry or processing payroll.
Controls:
These are the items that regulate the rate at which inputs are converted to outputs. Without controls, the process would operate continuously generating the output. The controls for our example could be the material requirements planning software, the purchase requisition approval process and inventory analysis.
Resources:
These are the items used or consumed in the process activity. It could be people’s time, machine time or money. For our example, the resources would be the buyer or purchasing agent, money, the representative for the company supplying the product or service and possibly other support functions who have input for the purchase. Additional resources are in the form of computers, material planning software, phones, fax, office space, etc.
Customer:
The customer is the group that takes the output and uses it. It is most likely used as an input to another process or as a resource.
Feedback Loop:
This is the mechanism used to monitor the process. What metric is used to tell the process owner how the process is performing and when action needs to be taken to correct it. For a purchasing process it could be supplier performance, dollars spent, on-time delivery or receiving inspection information.
2. Identify the Interfaces to the Standard
The interface
Getting into law school is a piece of cake.Getting into a good law school - good being defined as whatever the popular law school rankings consider good this week - isn't such a big deal either. That's what my book, Covert Tactics for Getting Into the Law School of Your Choice is all about. But getting into law school is just the first step in a very long road. Once you accept that offer of admission you have committed yourself to spend three years and, potentially, hundreds of thousands of dollars educating yourself so that you will be qualified to practice law. Of course, these costs don't even include the potential income you are sacrificing during your additional studies.Then, unless you are one of the few fortunate law school students who manage to land a job with a big firm paying top dollar, you will likely be surprised to find yourself making less as a new lawyer than you would have been making if you'd skipped law school and instead pursued that career in pharmaceutical sales.That's ok, if you are willing to take the long view, because getting your first job after law school is just the next step in a very long road. Getting into law school is simply the first step along that road.After you've worked that first job for a while, perhaps a few months or even a few years, you will start to see what you like and what you hate about practicing law. If you really hate what you are doing, start looking for something else right away.Practicing real estate law is very different from prosecuting criminals. Once you have too much experience in a narrow field it can become very difficult to switch gears. You won't feel comfortable doing something else and employers won't be interested in training you to do something entirely new, pa
Resources:
These are the items used or consumed in the process activity. It could be people’s time, machine time or money. For our example, the resources would be the buyer or purchasing agent, money, the representative for the company supplying the product or service and possibly other support functions who have input for the purchase. Additional resources are in the form of computers, material planning software, phones, fax, office space, etc.
Customer:
The customer is the group that takes the output and uses it. It is most likely used as an input to another process or as a resource.
Feedback Loop:
This is the mechanism used to monitor the process. What metric is used to tell the process owner how the process is performing and when action needs to be taken to correct it. For a purchasing process it could be supplier performance, dollars spent, on-time delivery or receiving inspection information.
2. Identify the Interfaces to the Standard
The interfaces are the points where the process intersects the standard. In simple terms it is where the requirements of the ISO 9001:2000 standard are applicable to the process being audited. The easiest way to accomplish this is to use a matrix with the elements of the standard on one axis and the process name on the other.
To better discern the interfaces of the process to the standard you could break the elements down into the sub elements. For example, 7.2 Customer Related Processes is comprised of 7.2.1 Determination of requirements related to the product, 7.2.2 Review of requirements related to the product and 7.2.3 Customer communication. The left side of the matrix would become larger, but you would have a more definitive intersection of the process and standard. This activity provides you with the understanding of what areas of the standard apply to the process. You will be developing questions to ensure compliance to the standard and this tells you what areas of the standard to focus on.
3. Document Review
The document review section requires reading and understanding the associated documentation for the process you are auditing. Start with the level 1 document, the quality manual. The quality manual should provide an overview of the process and should describe how the process fits into the overall quality system. The quality manual will explain what processes feed the process you are auditing and what processes are supported by it. It will describe the interaction and interrelationship of processes within the quality system.
The main output from the review of the quality manual will be an understanding of all the processes that make up the quality system and how they interact. The quality manual should provide a good description of how the processes work.
Next, review the level 2 documentation or procedures. Procedures should describe the process in more detail than the quality manual. There could be many procedures outlining the quality system, or there could be the minimum required by the ISO 9001:2000 standard, six. The six required procedures are:
Control of documents
Control of records
Internal Audits
Control of nonconforming product
Corrective action
Preventive action
Since the ISO 9001:2000 standard requires less documentation than previous versions of ISO 9000, there may not be as many procedures to evaluate. In this case the document review portion will be reduced. During the document review of the manual and procedures your are trying to understand the process and the system and ensure the requirements of the standard are met.
4. Identify Process Interfaces
Process interfaces are the “hand off” points from one process to another. This is where the previous process in providing an input to the audited process and the audited process is providing input to another process. How are process interfaces different from inputs and outputs? An input is the deliverable the process uses and the process interface describes how and when the deliverable is achieved. For example, an input into the purchasing process is the requirements of the purchased item. Looking at the process interface we want to understand how are the requirements delivered to the purchasing process, when are they delivered and by whom? In essence we are not looking at do the requirements exist, but are they clearly defined and understood by the process using them. We want to investigate are the requirements delivered on time and are they accurate?
On the output side, we will look at those things the purchasing process provides to other processes. Clearly one output is the purchased item on time, to specification and in the correct quantity. Another consideration is how is it moved from purchasing to receiving and inventory. There are other outputs of the purchasing process used by other processes. One could be supplier selection for the item purchased. Engineering or Quality may need to interface with the supplier and if the selection process is delayed, it could affect the design, or ability to qualify the product.
Understanding the process interfaces can lead to some audit questions concerning how smooth the hand off is between processes.
5. Identify Potential Process
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