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Audit Finance/Account Department - What/How to audit a Finance/Account Dept?

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Old 8th May 2005, 10:16 PM

Posts: 10
Please Help! Audit Finance/Account Department - What/How to audit a Finance/Account Dept?

What/How to audit a Finance/Account Dept?

Please share your experience and knowledge.

Thank you.

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Old 9th May 2005, 06:27 AM
Randy's Avatar

Posts: 8,246
Audit them like you would anyone else.

Do they have requirements to meet?

Are they meeting them?
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Old 9th May 2005, 09:26 AM
IEGeek - 2006's Avatar
IEGeek - 2006

Posts: 197
In Reply to Parent Post by MichaelWah

What/How to audit a Finance/Account Dept?

Please share your experience and knowledge.

Thank you.
I can only assume you meant in regards to a quality system and not a full blown financial audit. If we are infact talking about a Quality System audit, then proceed as Randy directed. They are no different from manufacturing, welding, assembly, etc. They should have a defined SOP, they should have defined quality objectives, they should have defined targets and goals. They also should have a list of aspects and impacts (for ISO14K)

Just because they are a bunch of paper pushers does not exempt them from the auditing process.

Our accounting department (6 people) thought they were exempt and our Purchasing Manager fought tooth and nail to not have to do anything in regards to our system (I truly thought he woke up in the mornings and thought of ways to not comply) I ended up auditing their department the way I would any department and identified several "Opportunities for Improvement" as well as some "Minor N/Cs" . We created some Quality objectives, we created an SOP and then set some targets. Lo and behold we reduced our number of accounts that were 90+ past due to almost zero, and showed great reduction in our Over 60 and Over 30 categories as well. turns out it was not our true our customers were deadbeats, our accounting department was not following up. (Money always makes people notice)

On the other hand, if you are looking for a full blown financial audit, might I recommend or suggest KPMG, PriceWaterHouse Coopers or Arthur Anderson (oops maybe not them) but the others are ok.

Good luck.
Old 9th May 2005, 09:29 AM
BadgerMan's Avatar

Posts: 698
Whatever requirements they are subject to (regulatory requirements such as Sarbanes-Oxley, flowed down corporate requirements, etc.) should be the basis for and focus of your internal auditing efforts.
Old 10th May 2005, 05:45 AM

Posts: 10
Thanks for the replies.

Well, the reason I ask was that they only have the Job Function documented. They don't have the SOP. All these while, they are exempted from the internal audit.

My MR says that we could audit them on the 6.0 Resources clause.

What/How to go about this?
Old 10th May 2005, 06:08 AM

Posts: 33
Do you have any inputs/outputs from your Finance dept that are quality affecting? For example, our Sales people have to ask our Accounts people to credit check new customers befre any order can be placed. As one of the things on our scope of accrediation is sale, this becomes a quality affecting activity.
Old 10th May 2005, 04:47 PM
RCBeyette's Avatar

Posts: 2,825
I look at Finance like this...they are a process. So, what (sub)elements of the standard are linked to them and how does this link related to their inputs, outputs, etc.

Take Records Control as a perfect example. They are not responsible for the development of the company procedure on this, but are their records maintained in accordance with the procedure? This is something you could audit them on.

Document Control...they are not responsible for the company method, but are they in adherence with it?


And so on...
Old 11th May 2005, 10:13 AM
IEGeek - 2006's Avatar
IEGeek - 2006

Posts: 197
For some real fun and adventure in the finance department try this:

ISO and TS state you must be continually improve. Well should that not include the paper pushing, pocket protector wearing bean counters? YES

In an effort to continually improve, I have tasked our Finance Dept. to reduce overall spending, including capital expenditures in FY2005, broken out by quarter. They have been given a total 8.2% target reduction in all GL accounts. You can impagine all the heated debates that ensued.

They have Project Detail Tracking Sheets and have created some enterprising ways to meet that goal. They are on track to actually reduce spending by 9.1% should they continue down the same trend path.

This is also part of what they are audited on.

"I love it when a plan comes together." B.A. Baracus

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