1. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 Audit and its classifications Mar-2016 Internal Auditor Training

2. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 2 Internal Auditing INDEX TABLE -What is Audit ? -Why Audits ? -Audit Types

3. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 3 Audit and Audit Types What is Audit ? An audit is a systematic, independent, and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which audit criteria are fulfilled. Audits are structured and formal evaluations. The term systematic means the company must plan and document its system for auditing. It must have management support and resources behind it.

4. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 4 Audit and Audit Types Why Audit? It helps organizations achieve their stated objectives. It improves accountability, ethical and professional practices. It improves the quality of output, support decision making and performance tracking. Frequent internal auditing measure compliance with the institution policies and procedures. The findings and recommendations highlight the areas were corrective action and improvement are needed.

5. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 5 Audit and Audit Types Why Audit? (Cont..) It can cover more than one topic at the organization or concentrate one aspect assess the efficiency and reliability of different processes. It provides opportunity to observe the changes in action and suggest further refinements to staff-mentoring and coaching. It can be used to examine and evaluate activities, as a service to the organization promoting effective control at a reasonable cost.

6. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 6 Audit and Audit Types Audit Types Audits can be broadly classified as Financial audits, Compliance audits, Operational audits, Information systems audits, Internal control reviews, department reviews, Integrated Audits, Investigative audits and follow-up audits. Operational audits which are based on QMS is classified as, i)System audit: A quality audit conducted on a QMS would be called a system audit. It can be described as a documented activity performed to verify, by examination and evaluation of objective evidence, that applicable elements of the QMS are appropriate and effective. ii)Adequacy audit: Is an review to verify the sufficiency of documentation for defining work and of records as evidence of satisfactory work completion.

7. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 7 Audit and Audit Types Audit Types (Cont..) iii) Product audit: Is an examination of a particular product (i.e. hardware, processed material, software or service) to evaluate whether it conforms to requirements. iv)Process audit: Is performed to verify that processes are working established limits. A process quality audit examines an activity to verify that the inputs, actions, and outputs are in accordance with defined requirements. v) Compliance audit: Is an audit to ensure you're in compliance with relevant specifications, contract, or regulation.

8. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 8 Audit and Audit Types Basic Audit Types Audits can be further sub-divided according to different emphases and objectives. The two types are internal audits and external audits. 1)Internal Audit / First Party Audits are carried out by an organization on itself to confirm to management that their documented quality management system is working effectively. An organization’s own defined and documented system forms the basis for this audit. Reasons for a first party audit: 1. ISO 9001 clause 8.2.2 requires it 2. Control and feedback mechanism for management 3. Correction of nonconformities before external bodies find them 4. Systematic improvement of the organization.

9. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 9 Audit and Audit Types Basic Audit Types (Cont..) 2)External Audits are audits done outside one's own organization and there are at least two distinct types of external audit, 1. Second party 2. Third Party

10. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 10 Audit and Audit Types Basic Audit Types (Cont..) Second Party Audits are carried out by one company on another, originally came from the idea of an organization auditing its suppliers. There are a number of reasons why an organization may wish to audit its suppliers. 1. One method to satisfy clause 7.4.1 of the Standard 2. Input to selecting, grading, and approving suppliers 3. Help to improve supplier Quality Management Systems 4. Mutual understanding of quality requirements.

11. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 11 Audit and Audit Types Basic Audit Types (Cont..) Third Party Audits (ISO 9001) are conducted by independent parties (parties other than supplier and customer). It is carried out to certify the organization of ISO 9001 and as surveillance visits (usually once or twice a year) to ensure that the system continues to work. The ISO 9000 series standards are used mainly for Second and Third party audits.

12. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 THANK YOU About Mphasis Mphasis (an HP Company) enables chosen customers to meet the demands of an evolving market place. Mphasis fuels this by combining superior human capital with cutting edge solutions in hyper-specialized areas. Contact with us on www.mphasis.comwww.mphasis.com Presentation by E-mail : ITO_SDE@mphasis.comITO_SDE@mphasis.com © 2012 MphasiS The information contained herein is subjected to change without notice. Sanjay Gour Head – Audit & Compliance (ITO & BPO) Service Delivery Excellence Team

13. 28 June 2016 | Proprietary and confidential information. © Mphasis 2013 13 Revision History CR # (Optional) Document Version# Approval Date Modified By Section, Page(s) and Text Revised Approved by -1.028-Aug-2014Sanjay GaurInitial releaseAudit Head BEOPS-25581.118-Mar-2016 Sudha Jayachandran Revised to new Power point template PDI Leader