2Quality auditingQuality auditing is the process of examining the effectiveness of management control programs, the purpose of which is to prevent problems. Quality audits are undertaken to identify problems. Quality audit which forms an important part of a quality management system, is an independent review conducted to compare the given aspects of quality performance with a standard for that performance. It is one of the key management tools for achieving the objectives set out by the organisation. It is an activity of gathering information for the improvement or corrective action.
3Cont…Audits whether internal or external, are carried out to verify that the individual elements within a quality system are effective, sufficient and suitable in achieving stated quality objectives. Quality system audits also provide objective evidence concerning the need for reduction, elimination and prevention of non-conformities. The results of these audits can be used by the management for improving the performance of the organisation. The auditing process has to be carried out in a systematic and organised manner. The success of an audit will depend on adequate planning, expertise of auditors in assessing the system objectively, totally unbiased attitude of auditors free from any influence or clear reporting to enable the auditee to take corrective actions.
4Cont…In any quality audit, three parties are involved. The party that requests the audit is known as the client, the party that conducts the audit is the auditor and the party that is being audited is the auditee. Auditors can be either internal or external auditors. An internal auditor is an employee of the auditee whereas external auditors are not.
5Types of quality audits Suitability quality audit deals with an indepth evaluation of the quality program against a reference standard, usually pre- determined by the client. Reference standards are set by organisations such as International Standards Organisation, American Society for Quality Control and British Standard Institute etc. The entire organisation or specific processes, products or services may be audited.
6Cont…Conformity quality audit deals with a thorough evaluation of the operations and activities within the quality system and the degree to which they conform to the defined quality policies and procedures.
7Cont…System audit (also known as corporate audit) which entails an evaluation of the quality program documentation (including policies, objectives, performance, procedures, operating instructions, defined accountabilities and responsibilities to achieve the quality function) with a reference standard. It also includes an evaluation of the activities and operations that are implemented to accomplish the desired quality objectives. Such audits explore conformance of quality management standards and their implementation to specified norms. They encompass the evaluation of the phase of planning, implementation, evaluation and comparison.
8Cont….Process Audit: It is an indepth evaluation of one or more processes in the organisation. All relevant elements of the identified process are examined and compared to specified standards. Process audit is more focussed and less costly and takes less time to conduct as compared to a system audit. A process audit is an effective means of verifying compliance and suggesting plans for improvement.
9Cont….Product audit is an assessment of a final product or service on its ability to meet or exceed customer expectations. This audit may involve conducting periodic tests on the product or obtaining information from the customer on a particular service. The objective of a product audit is to determine the effectiveness of the management control system.
10Audit qualityQuality of audit or audit quality is heavily influenced by the independence and objectivity of the auditor. For the audit to be effective, the auditor must be independent of the activities being examined. Thus, whether the auditor is internal or external may have an influence on audit quality. For example, for the assessment of an organisation's quality documents (suitability audit), external auditors are more suitable than internal auditors. System audits are also normally conducted by external auditors, Process and product audits can be done by internal or external auditors. An example of internal audit is a 'dock' audit where the product is inspected before shipment. Product audits conducted at the end of a process line are also usually internal audits: Product audits conducted at the customer site are typically external audits.
11Approaches for conducting quality audit There are two approaches or methods for conducting quality audit. Qne approach is to conduct an evaluation of all quality system activities at a particular location or operation within an organisation. This is known as location-oriented quality audit. This audit examines the actions and interactions of the elements in the quality program at the particular location and may be used to interpret differences between locations .
12Cont…The second approach to quality audit is to examine and evaluate activities relating to a particular element or function within a quality program at all locations when if, applies before moving on to the next function in the program. This is known as function oriented quality audit. Successive visits to each location is necessary to complete the function oriented quality audit.
13Utility of quality audit A quality audit is useful only when remedial actions in deficient areas, exposed by the quality audit, are undertaken by company management. A quality audit does not necessarily prescribe actions for improvement, it typically identifies areas that do not conform to prescribed standards and therefore need attention. If several areas are deficient, a company may prioritise those that require immediate attention. Only on implementation of the remedial action will a company improve its competitive position. Some of the tools that help identify critical areas, find root causes to problems and propose solutions that include cause-and-effect diagram, flow charts and Pareto charts.
14Stages in the quality audit work There are four stages in the auditing work namely1. Audit initiation,2. Audit preparation,3. Audit execution and4. Audit report
15Audit initiationAudit initiation comprises determining the scope and frequency of audit. Scope of the audit is based on a company's needs and requirements of audit with reference to quality system elements and the activities of the organisation. Some of the reasons for initiating quality audit are:
16Cont..(a) To verify by examination and evaluation of objective evidence that the applicable elements of the quality system under review have been developed and documented and are effectively implemented in accordance with the specified requirements.(b) To identify quality system non-conformities and deficiencies to ensure timely corrective actions.(c) To verify and ensure that the supplier's quality system continues to meet specified requirements and is being maintained and(d) To evaluate an organisation's quality system against a quality standard.
17Cont…The frequency of audits may be decided by taking into account specified or regulatory requirements, its organisations, corporate policies or technology in use that could affect the quality system.
18Audit preparation There are three steps in audit preparation: (a) To review the auditee's documented quality system. This service is commonly known as adequacy audit or desk top review.(b) Working out of an audit plan which should be designed to be flexible enough to permit changes based on the information gathered during the audit and permit effective use of the available resources.The audit plan includes the following:
19(i) The scope and objectives of the audit. (ii) Identification of persons for the audit activities.(iii) Identification of the audit team members.(iv)Time and place for carrying out the audit.(v)Identification of the organisational units to be audited.(vi) The expected time and duration for each major audit activity. (vii) The schedule of meetings to be held with the auditee.(viii) Confidentiality requirements.(ix) Audit report distribution and(x) Language of audit and translations if required.
20Cont…(c) Preparation of the working documents required for the conduct of the audit.These may include:(i) Checklists used for evaluation of quality system elements.(ii) Form for reporting audit observations and(iii) Form for documenting supporting evidence for the conclusions reached by the auditors.
21Audit executionFor having a uniform approach in conducting an audit, a structured audit needs to be conducted by having:(a)An opening meeting,(b) Examination and evaluation,(c) A closing meeting and(d) Preparation of an audit report. These steps are discussed in detail below:
22a) Opening meeting: An opening meeting is arranged between the auditor or lead manager and the auditee's representatives who have sufficient authority to implement any corrective action. The purpose of this meeting is to briefly explain how the audit is to be conducted and discuss administrative aspects of the audit. This meeting also establishes an official channel of communication between the auditor and the management of auditee.
23(b) Examination and evaluation: Each department or functional group of the organisation is audited separately against relevant requirements of the quality systems standards and the auditee's documented quality system in an objective manner. Sample of current document and records are examined together with the work-in-program and the auditor satisfies himself that the procedure and instructions are being followed. This examination involves the collection of objective evidence and this is where the skill of the auditor plays an important role. After the completion of the department or function, the auditor will discuss his findings with the auditee's representative to confirm non-conformities before completing the formal non- conformity reports. During the audit, intermediate meetings are usually held between the auditors to review progress, confirm non-conformities and to ensure that the audit is carried out according to the plan.
24(c) Closing meeting: At the end of an audit, a closing meeting is held between the auditors and the auditee management. The purpose of the meeting is to advise the management of the findings of the audit and to highlight any major aspects of the quality system which are found unsatisfactory and call for close and immediate attention. In this meeting, the non- conformities observed during the audit are discussed and a formal report is presented to the auditee's management. Also, normally, the corrective actions to be carried out are discussed in this meeting.
25(d) Audit report: It is an open type report prepared by the lead manager after the non-conformity reports are signed by the auditors and auditee's representatives after the completion of the audit. The contents of the audit reports are (i) detail of the audit plan (ii) a summary of the observations and non-conformities and (iii) the final recommendations.
26Corrective actionThe auditee management is responsible for determining and initiating corrective actions needed to correct a non- conformity or to correct the cause of a non-conformity. The auditor is also responsible for identifying the non- conformities. The auditor has to establish documents and maintain necessary procedures followed for investigating the cause of non-conformities and the corrective action needed to prevent recurrence. This may necessitate the analysis of all processes and procedures to detect and eliminate the potential causes of non-conformities. Controls have to be devised or improved and applied to ensure that corrective actions are taken and are effective. Taking corrective actions may involve making changes in procedures and such changes will have to be recorded and implemented.