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Auditing Fundamentals Auditing Fundamentals
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A. Basic terms and concepts A. Basic terms and concepts
Auditing
Quality
Quality Assurance
Quality Control
Non-conformity
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Auditing Auditing
³systematic, independent and documented process for
obtaining audit evidence and evaluating it objectively to
determine the extent to which audit criteria are fulfilled´
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Q uality Q uality
³degree to which a set of inherent characteristic fulfils
requirements´
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Q uality AssuranceQ uality Assurance
³part of quality management focused on providing
confidence that quality requirements will be fulfilled ´
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Q uality Control Q uality Control
³part of quality management focused on fulfilling quality
requirements´
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N onN on- -conformity conformity
³non-fulfilment of a requirements ´
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P urpose of auditing P urpose of auditing
to determine conformity
to determine the effectiveness to provide opportunity to improve
to meet regulatory requirements
for certification
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R easons to conduct an audit R easons to conduct an audit
new supplier
regular review of suppliers
contractual requirement
changes in the system
increased orders
quality problems
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BenefitsBenefits
Give the management confidence
Gain market and customer confidence
Gain confidence of employees
Observe operational problems
Provide opportunity for improvement
Provide feedback for corrective and preventive actions
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Classification of audits (Internal/ External)Classification of audits (Internal/ External)
Internal auditInternal audit ± Performed within an organization to
measure its own performance
ExternalExternal audit- by an organization on an outside party (e.g.
supplier)
± Or the audit of an organization by an outside party (e.g.
Client or ISO 9001 certification body)
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Classification of audits (based on auditing party)Classification of audits (based on auditing party)
First PartyFirst Party - by an organisation on itself for their own
purposes (Internal)
Second party auditSecond party audit - by an organisation on another
organisation e.g. by customer on the supplier (External)
Third party auditThird party audit - by an independent organisation typically
for certification. (External)
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Classification of audits (based on scope)Classification of audits (based on scope)
System auditSystem audit ± concentrates on
overall quality system
Process auditProcess audit ± concentrates on
process
Product auditProduct audit ± concentrates on
one or more products or services
System audit
Process audit
Product audit
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S ystem Audit S ystem Audit
Can be most extensive audit
May break overall system audit into small system audits
May investigate the effect of system on the product or
service
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P rocess Audit P rocess Audit
Is less extensive than system audit
Needs less planning than the system audit
Focuses on specific process element
Generally requires lesser auditing effort than the system
audit
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P roduct Audit P roduct Audit
Assessment of final product or service against the
requirements or the purpose
Generally requires lesser auditing effort than System or Process audits.
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S ome other type of auditsS ome other type of audits
Assessment Assessment ± less formal and limited in scope
Compliance AuditsCompliance Audits-- to audit compliance to contractual
agreements, procedures or standards. PrePre--Award Surveys Award Surveys-- conducted prior to awarding a contract
Desk auditDesk audit ± Review of quality documents to ensure compliance
to higher level documents, and to familiarize auditor with the
auditee¶s quality system (generally prior to an audit)
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Audit Criteria Audit Criteria
Auditing Standards Auditing Standards ± ISO 19011
Industry Specific StandardsIndustry Specific Standards --
Automobile industry ISO 16949 Aerospace industry AS 9100
Petroleum, Petrochemicals and Natural gas Industry ± ISO 29001
Medical Devices ± ISO 13485
Testing and Calibration Laboratories ± ISO 17025
Telecommunication ± TL 9000
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Audit P articipants Audit P articipants
Lead Auditor
Auditors
Client
Auditee
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Audit Independent and Objectivity Audit Independent and Objectivity
IndependenceIndependence ± auditors are independent when they
render impartial and unbiased judgment in the conduct of
their engagement. Independence is established by the organizational and
reporting structure.
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Audit Independent and Objectivity Audit Independent and Objectivity
ObjectivityObjectivity ± auditors should have no personal or
professional involvement with the area being audited; and
should maintain an un-biased and impartial mindset inregard to all engagements.
Objectivity is a mental attitude which internal auditors
should maintain while performing engagements.
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