Internal auditing is most important quality management system component that ensures the quality of the product by reviewing the facilities, processes and documents. It remains in more attention by regulatory agencies such as, FDA. This paper describes about the objective of the internal auditing and also it describe about the general procedure for the internal auditing in organization. Also it has mentioned about the Quality management system model on the basis of customer need and requirements. It covers brief description about the techniques for improving internal auditing quality that is very useful for organization to improve the effectiveness of the internal auditing. Most important topic that mentioned in this paper is the auditing the internal auditing effectiveness that provides assurance about the effectiveness and efficiency of internal auditing that is conducted in the organization.
2.0 Introduction :
Internal audit is an independent and objective assurance of quality system management designed to add value and improve the operation of organizations. It is conducted to audit the internal control of company to check the efficiency and effectiveness of the quality management system. It is company's preventive action that detects the problem early. It should perform by professionals to check the process that is performing as per regulation and they have to maintain the record for audit and have to submit to the executive management for the conformance or non-conformance of effectiveness of the quality management system. So, by reviewing this report management can take necessary action for the effective quality management system.
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For the effective quality management system, executive management must comply with their responsibility for maintaining quality policy, goals, processes and measuring the efficiency and effectiveness of the quality system by internal auditing.
3.0 Objectives of Internal Auditing :
Main objective of internal auditing is to assurance of effective quality management system. Internal auditing helps to organization's member in performing their work effectively and efficiently by analyzing, recommendation and information related to process. Main objective of internal auditing in pharmaceuticals is to evaluate the process that is working as specified and also compliance with cGMP regulations. Another purpose of internal objective is to review the problems whether they are corrected or not, those were previously occurred and also check the documentation for assurance of quality product.
4.1 Quality Management System (QMS) :
Quality Management system is a set of co-ordinate activities to control the organization in order to improve the effectiveness and efficiency of the all functions.
Main benefits of QMS is that it define the process, that provides the assurance of a quality product, rather than detecting defects of products or services after production. Fully documented QMS will ensure the customer requirements and organization requirements.
- Customer's requirements: assurance of the quality of product as per customer needs and expectations.
- Organization's requirements: optimum product cost with efficient use of company's resources such as, human, equipments, technology etc.
QMS enables an organization to achieve the goals by providing the quality plan and strategies. It provides best tool to control the quality and achieve the customer satisfaction by defining the processes. Figure: 1 shows the progress of business by using QMS.
Figure 1: Graph of Process Vs. Time of organization by using QMS
ISO set the standard for quality management system are,
- ISO/FDIS 9000:2000 - Quality management systems - Fundamentals and vocabulary
- ISO/FDIS 9001:2000 - Quality management systems - requirements
- ISO/FDIS 9004:2000 - Guidelines for performance improvement
ISO 9001:2000 divides the QMS into three different areas: general requirements, documentation requirements and quality management principles. ISO 9001 specifies the requirements for a QMS that may be used by the organization for internal application.
This QMS model (Figure 2) shows that the customer plays a significant role in defining the inputs and monitors the process to evaluate the quality of the product.
Figure 2: Quality Management System (QMS) model
4.2 Requirements and Guidance for Internal Auditing :
Organizations are conducting internal auditing that is varying in purpose, size, and structure and by person that are from inside or outside of organization. There are many requirements and guidance published by ISO. But, main purpose of standard is to improve the organizational functions and operation by providing the frame work for the value-added internal auditing process. Also it represents the basis principle for internal auditing and establish basis for the evaluation of internal auditing performance.
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ISO 9001 clause 8.2.2 state as follows:
“An audit programme shall be planned, taking into consideration the status and importance of the processes and areas to be audited, as well as the results of previous audits”.
This requirement is focus on those areas where problems were occurred or those are most likely to occur. Special attention must require on those areas during internal auditing where high level risk is influenced by factors such as,
- Process of facilities affects the quality of product.
- Dissatisfaction of customer
- Non-compliance with regulatory requirements
ISO 9004:2000 clause 184.108.40.206
“Top management should ensure the establishment of an effective and efficient internal audit process to assess the strengths and weaknesses of the quality management system. The internal audit process acts as a management tool for independent assessment of any designated process or activity. The internal audit process provides an independent tool for use in obtaining objective evidence that the existing requirements are fulfilled, since the internal audit evaluates the effectiveness and efficiency of the organization”.
This guidance stresses on the efficient use of resources when conducting internal auditing. Top management is responsible for use of quality management system tool and ensure effective and efficient internal auditing process. And they have to provide all facilities for conducting internal auditing for the assurance of the quality of the product.
4.3 Internal Audit Process :
4.3.1 Audit Schedule:
Field Quality Manager (FQM) develops and maintains an audit schedule every year. This schedule mainly focuses on the operation, previous problems and necessary corrective action requests. Special additional audit may be schedule upon special request from management.
4.3.2 Audit Team:
FQM make a team for internal audit in organization and make a one team leader who has a responsibility to make plan for audit.
Audit team will prepare a plan that include,
- The audit objective
- The audit scope
- The audit criteria
- Date and place where audit will be conducted
- Expected duration of audit
- Responsibility of each team member
Team leader has to submit the audit plan to FQM.
4.3.3 Audit Tracking:
Each audit is uniquely identified by tracking number and start from IA for internal audit and followed by sevens digit number. The first four digits represent the calendar year and last three digits begin with 001 and increase with number of audit.
For example, IA2009-001
4.3.4 Conducting an Audit:
Internal audit includes the examination of documents and records, observation of process, facilities and equipments. The audit team will be responsible for making the checklist that includes all the facilities and processes being audited. After the audit is conducted, there is a meeting between all auditors, FQM and management to discuss about the non-conformances, necessary suggestions for improvement.
Team leader will make the final report of whole audit within 30 days after completion of audit and submit to FQM. And FQM will submit this report to the management with suggestion of necessary action to be taken.
4.3.5 Preventive and Corrective action:
Corrective action must take for non-conformance of process or facility and preventive action must take for process or facility which is not non conformance but still action required for quality improvement. FQM will monitor both processes and conduct re-audit of those process and facility for the conformance of the effective quality management system.
Records must be maintained by the FQM with all implementation.
Record includes schedule, plan, audit, corrective and preventive action and also quality improvement records.
4.4 Techniques to improve internal auditing quality :
The Purpose of the internal auditing is to ensure effectiveness and efficiency of the company's quality management and provide the tool for control management.
Effectiveness + Efficiency = Internal Auditing Quality
Internal auditing quality is not simply relying on the effectiveness and efficiency of control management but, it also depends on the added value of auditing, provided by the auditor.
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There are seven techniques (Figure 3) to improve the internal auditing quality. By proper understanding and using these tools we can eliminate the non-value added activity in company and can increase the efficiency and effectiveness of the internal auditing quality.
Figure 3: Seven techniques for improving internal auditing quality.
4.4.1 Revise auditing structure:
This is the best way to increase the internal auditing quality by revising the auditing plans and techniques. This will depend on the auditor's knowledge and prior training.
Internal auditor's professional must have proper education, training, technique skill and should aware of new technique for internal auditing.
4.4.2 Improve auditing techniques:
Auditing department should have to practice self-controlled assessment and have to make new concept to make internal auditing effective. They have to work on five basis task that include: control environment, monitoring, information, risk evaluation, control activities and communication.
4.4.3 Make sound auditing plans:
Proper plan on schedule, techniques and strategies can make internal auditing more effective.
4.4.4 Computerize auditing procedure:
Use of computerized software for the data mining in internal auditing instead of traditional techniques, that makes internal auditing more efficient. It adds value in the internal auditing quality.
4.4.5 Implement value-added suggestions:
Auditor plays an important role in the internal auditing quality and business process by submitting final auditing report. This report should include not only detection and fraud but it also includes innovative suggestions for defects that include both proactive and preventive actions.
4.4.6 Coordinate external auditors:
The internal auditors and external auditors have to do their own assigned function. But, they have to work with coordination to avoid overlapping of assigned functions.
4.4.7 Comply with legal requirements:
Legal requirement is one of the ways to improve the efficiency and effectiveness of internal auditing quality. Australia and Canada passed the legislation to regulate internal auditing. They establish internal auditing criteria, training programs, allocating resources and expanding auditing area. Also management has to issue the internal control statement along with auditing report and publish it in the annual report to government. By this way, efficiency of internal auditing quality will be improved by controlling internal auditing procedure and auditor's attitude.
4.5 Auditing the Internal auditing Effectiveness :
Organizations are seeking an adequate, suitable and effective quality management to conduct an internal auditing to ensure the effectiveness and efficiency of quality management system. It is necessary to check the effectiveness of the internal auditing activity.
Third party auditors examine the internal auditing processes. They needs to,
- Evaluate the organization's approach to identify critical areas as well as other parameters such as validation process done by organization and also monitoring of process and calibration of instruments done by company. Third party auditors have to evaluate the process where problems were occurred or where problems are more likely to occur. Also they have to check the qualified personnel need for specific process.
- Evaluate the ability of the internal auditors and audit team:
- Evaluate the planning of audits:
- Assurance of implemented an effective internal audit programme:
Third party auditors have to check the ability of the internal auditors and audit team. Internal auditor must have provided proper training and he/she should acquire adequate knowledge of the process or equipment that have to be audited. Internal auditors and audit team should have ability to monitor the performance. Also internal auditors should understand the inherent risk of the out come of audit process if they fail to follow the pre-established audit plan or procedure.
Organization should have to adopt the risk based approach to the planning of the internal audits in order to maximize use of available resources during the conduct of internal auditing activities. It minimizes the inherent risk of audit failure in the audit process.
Third party auditors have to examine the effectiveness of implemented internal auditing process and to check the any improvements to QMS.
Internal auditing is a systemic and independent procedure to evaluate the intent, implementation and effectiveness of the selected facilities or processes of organization. The main purpose o the internal auditing is to evaluate the effectiveness and efficiency of the quality management system. Internal auditor plays an important role for successful internal auditing by giving information and suggestion about the problems. Every company should use the quality management system tool- internal auditing, to evaluate the process for cGMP compliance and also early finding of problems.
Company should practice quality management system (QMS) that is set of co-ordinate activities to control the organization in order to improve the effectiveness and efficiency by providing the quality plan and strategies. It ensures the customer needs and organization needs. ISO set the standard for QMS.
Many requirements and guidance published by the ISO to improve the organizational function and operation by providing the frame work for internal auditing processes. For effective internal auditing process, organization can use several techniques to improve internal auditing quality.
The main and effective task is auditing the internal auditing effectiveness. It is necessary to evaluate the ability of the internal auditor and audit team and their planning. And also it provides assurance of implemented an effective internal auditing program.
- http://www.facilitatedcontrols.com/internal-auditing/ia-is.shtml, Introduction and objective of Internal auditing, as of 11/14/2009.
- http://www.businessballs.com/dtiresources/quality_management_systems_QMS.pdf, Over view of Quality Management System, as of 11/21/2009.
- http://www.epa.gov/Region4/sesd/fbqstp/Internal-Audits.pdf, Process of internal auditing, as of 11/14/2009.
- http://www.theaccountingjournal.org/21st_files/Barnesmanuscriptwebpage.htm, Techniques for improving internal auditing quality, as of 11/14/2009.
- http://isotc.iso.org/livelink/livelink/fetch/2000/2122/138402/138403/3541460/customview.html?func=ll&objId=3541460&objAction=browse&sort=name, Auditing the effectiveness of internal auditing, as of 11/21/2009.