Your Internal Audit Team: Internal or Hired External? Outsourcing Internal Audits

Internal audit: in-house or outsource?


  • Total voters
    63

Crusader

Trusted Information Resource
Not sure if this would make a good poll or not but here goes:
How many of us use our own internal auditor team? and How many of us actually hire an external source to perform internal audits?
How many of us switched from internal to external and found it to be better / worse?
-jus curious...:bigwave:
 

Sidney Vianna

Post Responsibly
Leader
Admin
The insider vs. the outsider

I think this is a great question. In principle, the organization's employees should be able to perform a much better assessment of the QMS than any external person/outsider. However, the reality is: due to ineffective qualification and training, poor selection, workload, intimidation, and a few other reasons, many internal audits done by the company's own employees are, many times, superficial, ineffective, confrontational, opinion-based, etc. and actually lead to a lot of internal friction. So, outsourcing of the internal audits might be a good option for some organizations.
I think Lee forgot to develop the actual poll, but I am interested in the feedback.
 

bpritts

Involved - Posts
I too am interested in the answers ... as a consultant, I do the ongoing
internal audits for several clients. I would agree with Sidney's comments
that all too often the "internal" internal audits just aren't very well done.
Further, with TS16949, the auto companies have raised the bar for
internal auditors (especially with Ford, who has tough customer specific
requirements for internal auditor qualifications.) It would be hard for most
companies to cost justify this amount of training investment.

Another benefit of the use of outside resources is additional independence,
particularly for smaller companies.

I will say that some of the better internal audits I've seen by employees
are those done by multi-plant companies, where staff from the plants
audit each other. If you are in this situation, it can work quite well.
You get the benefit of specific experience in the company, a greater degree
of independence, and a little bit of competitive juice.

In the TS16949 model, a good option is to use a wide range of employees
for the manufacturing process and product audits, and use the consultant
for system audits.

Regards,
Brad
 

Howard Atkins

Forum Administrator
Leader
Admin
I have added the options of both outsourced and "internal".
There are companies that I know that do both.
The outsourced audits do have the advantage of not being locked into "fixed conceptions" due to "joint history" and a tendency to relate more seriously as they are "external".
Another good model is to audit neighbours, my company will audit you and vice versa.
The real question is whether the management see the audit process as a benefit or a waste of time?
 

Wes Bucey

Prophet of Profit
I added the poll. Howard added some good questions. Send either of us a PM if you'd like the questions altered - I wasn't sure exactly what you were aiming for.

I voted "in-house & love it" because I always found the cross-functional audit teams a great way to keep everyone focused on the concept that the entire organization must work TOGETHER!

As I wrote in my ASQ Profile:

My entire career has been centered on the concept "Quality should be involved in every aspect of a company - including executive planning, administration, marketing, purchasing, design, production, shipping, and service."

This concept holds true whether the company is a manufacturer or service company (banking, insurance, communications, transportation, construction, janitorial, etc.) The major emphasis is on pleasing or delighting the customer while maintaining or increasing organizational profitability. (In the case of non-profits, does the organization's performance delight both recipients and the contributors? If so, the organization will continue to thrive.)

I put more emphasis on "big picture" and "company culture" than on metrics. If all the members of the organization are indeed working together, metrics are a natural function of identifying areas to improve. If the organization is NOT working together, the imposition of metrics can be draconian and serve to divide the culture even more.
 
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Yes, the question is interesting, and the answer may be different due to how your IA's are set up. Ok, here goes:

Generally speaking, I want an internal team for internal audits. It is great for spreading knowledge and good ideas around. That said, we sometimes "trade" audits with sister companies in our group, much for the same reason: To spread knowledge and good ideas.

Our internal auditors also serve (unofficially) as a kind of quality ambassadeurs in their ordinary roles, thanks to their knowledge.

/Claes
 

Crusader

Trusted Information Resource
Thanks for setting up the poll. I failed to see how to set one up. (never done that) I read something somewhere in the Cove about someone who chose to out-source audits and it made me wonder if it could be the start of a growing trend.

Right now, we are strictly in-house auditing. Love is a strong description though - I would say we like/prefer it only because we save money by not out-sourcing it. Plus, the flexibility to change the schedule due to unexpected conflicts is easier if audits are done by us. The idea has crossed our minds about external auditors though.
 

Wes Bucey

Prophet of Profit
I can see lots of reasons to have INTERNAL staff perform INTERNAL audit. I fail to be convinced about EXTERNAL staff performing INTERNAL audit.

I can see adding some outsiders (neighbors as part of free swap) or even some paid professionals to give each team a cross-functional character or to help in on-the-job training for the audit team, but I still maintain the team should have mostly in-house personnel.

Those of you who advocate 100% outsiders to perform INTERNAL audit should take this opportunity to help me understand your point of view.

I should warn in advance that I will be very hard to convince if you claim "employees are too busy" since it is management's chore to schedule things so there is sufficient time to do everything, even if it means increasing staffing or granting overtime pay. I will be similarly resistant to claims that employees are "incompetent" since it is management's task to provide training and opportunities to take such training to eliminate "incompetence" as an excuse.
 
C

cncmarine

It all depends on the size of the company. Under 100 people, I would say that you do not have the resources to run an effective internal audit system. The majority of the managers position over lap each other, its tough to find some one not involved in the a project to audit.

As quality manager It’s my belief that having an external internal audit system is much more effective and meaningful to the quality system.
 

Jim Wynne

Leader
Admin
Wes Bucey said:
II should warn in advance that I will be very hard to convince if you claim "employees are too busy" since it is management's chore to schedule things so there is sufficient time to do everything, even if it means increasing staffing or granting overtime pay. I will be similarly resistant to claims that employees are "incompetent" since it is management's task to provide training and opportunities to take such training to eliminate "incompetence" as an excuse.

This reminds me of a Monty Python bit:
Alan: Well last week, we showed you how to become a gynecologist. And this week on "How to Do It" we're going to show you how to play the flute, how to split an atom, how to construct a box girder bridge, how to irrigate the Sahara Desert and make vast new areas of land cultivatable, but first, here's Jackie to tell you all how to rid the world of all known diseases.
Jackie: Hello, Alan.
Alan: Hello, Jackie.
Jackie: Well, first of all, become a doctor and discover a marvelous cure for something, and then, when the medical profession really starts to take notice of you, you can jolly well tell them what to do and make sure they get everything right so there'll never be any diseases ever again.
Alan: Thanks, Jackie, great idea. How to play the flute.
[produces a flute]
Alan: Well here we are. You blow there and you move your fingers up and down here.
Noel: Great, great, Alan. Well, next week we'll be showing you how black and white people can live together in peace and harmony, and Alan will be over in Moscow showing us how to reconcile the Russians and the Chinese. So until next week, cheerio!
All: Bye!

It all seems so simple: management does everything management is supposed to do, and we never have to worry about anything going wrong ever again. With regard to the question at hand, there really isn't a one-size-fits-all answer. Sometimes it's best to have internal people do the auditing, but in other cases, where the best chance for competence and objectivity lies elsewhere, then it makes good sense to have outside auditors do the job.
 
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