TWO AUDIT INSTRUMENTS: PLANNING AND CHECKLIST 2

(Part 1)

There are many reasons why goals are not always accomplished. One common reason is that a lot of time is spent planning an activity, but often the plans are not executed as intended. This is a typical problem for auditors, who sometimes rely too much on inflexible audit approaches and standardized audit programs during the execution phase of their audits.

The use of audit programs tailored to specific audit circumstances, coupled with thorough audit planning, will help the auditor carry out the objectives of an audit.

Every facet of an audit requires professional judgment and individual initiative. After an audit has been selected for implementation, decisions need to be made about:

• what and how much to audit;
• the audit objectives;
• what audit approaches, methodology and technology to employ to assess performance related to the integrity of the appointment process;
• what skills, disciplines and experience to assign to the audit

Proper planning helps to ensure that auditors and management share the same agenda and that each engagement adds value to the client.
New comers to the profession often don't fully understand the value of audit planning. "Why not just do it?" they ask. "Why don't we just walk in the door and start ticking?"
Unfortunately, no audit department has enough time or resources to do everything that could be done, which means that we must predetermine what is most important and what steps will be most likely to ensure success.

Macro-level planning, a process that is usually conducted by audit management, identifies the audits that will be performed within the organization, while micro-level planning focuses on how to plan an individual audit.
The importance of macro planning and its implications are relatively obvious. In this instance, we'll examine micro-level planning: how to scope the audit, acquire management cooperation, and ensure that the right skills are available.

Both audit and management objectives should be integrated into the audit scope.
In most cases, the audit planning process includes meetings with management, identification of applicable audit programs, and other steps to mitigate the risks related to the objectives. During the planning process, the auditor must ask management for their objectives and compare them to the audit scope to be sure that the audit work helps management to meet their objectives.
An audit that does not include management's objectives from the beginning will not generally produce information on which management will act.

The second essential instrument for a good audit is an effective checklist.
An easy-to-use checklist will include evaluation criteria, questions to be answered, information to be verified, reference sources for requirements or audit points, and space for recording objective evidence.

Over the years a common failure of most audit checklist has been the style of the question being asked. Typically, the majority of questions can be answered with a simple yes or no. Such answer can be gained from sitting in someone’s office without getting out on the shop floor, where the action and objective evidence are found.
A more effective style, particulary for inexperienced auditors, is to phrase the question or audit point so that a narrative response is required. By using words and phrases such as “describe”, “what”, “how”, “who”, “where”, “when”, much more information can be obtained than by asking yes-no questions.

Here are some examples of how to change traditional yes-no questions into the narrative style:

• traditional: are the quality policy and supporting procedures known and understood by staff at all levels? Narrative: interview personnel at all levels and determine wheter the quality policy is known and understood
• Are records maineined for qualified processes, equipment and personnel? Narrative: what evidence shows that records for qualified processes, equipment and personell are on file?

The checklist provides working papers upon which the data collected by the audit team are documented.
It contains a list of specific questions pertaining to areas being evaluated during the audit.

Auditors can’t build checklists unless they know what questions to ask. Those questions relate to the requirements, inputs, outputs and practices reflected in process documentation – not just documentation required for conformance to the standard in question.

One of the greatest benefits of a checklist is hat it can help structure the audit.
An audit plan provides a macrostructure by identifying the broad areas to be examinated and allocating time for each area.
A good checklist should provide a structure for each individual area or process to be examinated. A good audit checklist can help auditors ensure they haven’t missed anything important if they need to jump around a little during an audit.

The best audit checklist not only include the questions to ask and space to document the findings, but they also provide areas for comments and information about samples selected and documents reviewed.

Fortunately, developing an audit checklist is not difficult, assuming the auditor has taken the time to review the procedures and understand the audit areas assigned.
Keep in mind that while developing a checklist is nt difficult, it takes some practice. A checklist is a somewhat personal tool. It should be seen as a guide and aid to the auditor, not a instruction.

The first page of every audit checklist should be used as a planning tool. This page, which can be standardized, is especially helpful to new auditors and can be used as a mechanism to ensure consistent audit planning is conducted.

There are three steps in checklist preparation:

• review the procedures, suppliers, inputs, process, outputs and customers diagrams and other information
• populate the checklist: start with a blank checklist template. Auditors should consider each requirements or topic they want to verify and put the requirement n the checklist in the form of a question
• add space for objective evidence. Auditors should consider what records, lists or other objective evidence they will want to see to verify the requirement is being met. Focusing only on the questions to ask provides little assurance the process is being maintained, while skipping verification or asking the auditee for examples violates one of the most basic rules of auditing: never let the auditee pick the samples

Checklists, if developed for a specific audit and used correctly, can:

• act as a sampling plan and time manager
• be used as an information base for planning future audits
• ensure a consistent audit approach
• ensure that adequate evidence is obtained
• ensure that the audit scope is being followed
• help an auditor to perform better during the audit process
• help to ensure that an audit is consucted in a systematic and comprehensive manner
• provide a means of communication and a place to record data for use for future reference
• provide a repository for notes collected during the audit process
• provide a record that QMS was examinated
• provide structure and continuity to an audit
• serve as a memory aid

There are a lot of advantages in using a good audit checklists a detailed audit plan. They depend on many factors, including customer needs, time and cost restraints, auditor experience and sector scheme requirements. Auditors should assess the value of the checklist and of the plan as two aids in audit process and consider their use as a functional tool.