What's different about internal audits when it comes to the on-site activities?
Previously I’ve talked about the difference with internal audits when it comes to the planning and preparation of the audit – check that article out Internal Audit Planning and Preparation so you get the complete picture.
Now I’m going to talk about the internal audit on-site activities and what’s special or unique about them.
The first activity we conduct as part of our audit activities (on-site) is the Opening Meeting.
These can be quite formal normally, like a boardroom setting with a mix of different managers in the room.
It doesn't need to be like this – I’ve conducted opening meetings in the middle of a paddock at the back of a ute! For internal audits, opening meetings could be less formal.
You could conduct the meeting at the desk with the auditee or if there is a team of people you may go through it in their work area or meeting room still.
The difference here for internal auditors is that you are conducting the audit within your own business and with people that you work with every day and in a familiar environment.
Remember that the opening meeting is the first point of communication for the audit (face-to-face) and it is the opportunity for you as the auditor to explain the process of how the audit will be conducted.
It’s also an opportunity for the auditee or any other representatives to ask any questions. As long as you can facilitate this wherever you might conduct the opening meeting is the goal.
We even talk about doing a mini opening meeting when you move from this more ‘formal’ opening meeting to your first auditee.
The mini opening meeting is about making them feel comfortable. It's about explaining why you're there and that you will be taking notes. And it doesn't mean that if you're taking notes, it's a bad thing. It could be a good thing as well!
You can see it's just important to communicate why you're there and what the process is. It’s all about making them feel comfortable with the process.
Once you’ve completed the opening meeting you are now ready for the audit interview which is all about asking your questions and gathering evidence, taking notes, and getting them to show you how things are done.
The difference with an internal audit interview is that they may actually be a little more challenging. I say this because you are interviewing work colleagues - people that you work with every day. We know as an auditor, there's always a potential for conflict and we have to be diplomatic in our approach and how we ask our questions.
With internal audits, we need to be even more aware of this as you have a day-to-day relationship to manage outside of these audits.
For me, as an external auditor, I don't have this day-to-day relationship with my clients and auditees. I have professional relationships with my auditees, and I only see them once a year where I pop in, conduct the audit and then leave. I don't have to come back the next day and then maintain a different relationship with our ‘normal’ jobs. As an external party, I'm quite separated from this.
As an internal auditor, you need to be a little bit more aware of that existing relationship that you do have with work colleagues. I think you need to nurture this relationship a little bit more and really be aware of it as it can be work to your advantage.
The advantage might be that with an existing working relationship with your auditees you have an understanding of their personalities and how they operate before you go into the audit, so you have a head start knowing how to communicate with them.
Whereas myself, for instance, if I'm just coming into an organization as an external auditor and I’ve just met the person, it can take me some time to figure out their style, how they respond and how I can change my questioning to get the most out of the process and to make them feel comfortable. If you're an internal auditor, you might already have this insight.
Now, of course, the disadvantage might be if there are any findings the auditee may not respond well (use your great auditing personal behaviors to manage this of course) this can also spill over into the workplace. This is where I urge you to always promote the positive aspect of raising any findings (nonconformances, observations, or improvement opportunities).
I recently stepped back into the auditing role and one of the staff said to me “Nonconformances are the biggest teacher”.
Now that is a positive attitude!
Once you have conducted all of the audit interviews for your internal audit, you are ready to start preparing for the closing meeting. You will do this in what is commonly referred to as a team meeting.
Now, remember if you're an independent, principal auditor and you're working on your own, you still need this team meeting. The team meeting is essentially to review your notes, have a look at what you've written down, and put together your findings. This is all in preparation to present your findings at the closing meeting.
As an internal auditor, you still need to prepare for the closing meeting by reviewing your notes and writing up your findings. These findings (nonconformances, observations or improvement opportunities) are what you will present at the closing meeting.
The only difference I can see for you as an internal auditor is that you would use your own language or that of the business or industry you work in. You might not call findings a nonconformance either. I do go to some businesses that call everything an opportunity for improvement or an observation.
Remember that anything that you write up to present at the closing meeting should have already been discussed verbally during the audit interviews. There shouldn’t be any surprises!
Once you have your findings collected and written up you are ready for the closing meeting.
As an internal auditor, you would more than likely complete this in the same way you conducted the opening meeting. If this was at the desk of the auditee or in the work area of the team or even in a meeting room then this is what’s right for the closing meeting too.
The closing meeting may not be as formal as an external audit, however, the intent is still about presenting your findings and confirming what the next steps are which includes the audit report.
The last part of the audit process is the audit report.
As an internal auditor no doubt your business will have its own template. It's the same for me as an external auditor, we have an audit report template, so then the next job is to go through and update your own template with the findings.
You would also normally have an overall summary of the audit, scope, criteria, locations, and don’t forget any positives of the audit.
We do tend to focus on the findings of the audit, when in actual fact the majority in most cases is conforming and satisfactory. It's always great to acknowledge the good work that people are doing with their systems.
The difference here is that you will use your own (or the business) audit report template. Your audit reports may not be as onerous as an external audit report. Keep them simple and easy to understand.
And that’s a great way to finish up actually – keeping things simple and easy to understand. This is very important to consider throughout your internal audit and all of the processes.
If you have any questions or comments please let me know as I’d love to help or contact us now!