Accounting Department and Internal Auditing

[RoxaneB]

Hello colleagues,

I wanted to to get your perspectives and notes of best practice or case studies regarding internally auditing the accounting department.

There has been difficulty scheduling an internal audit with the accounting department. There has been pushback from accounting leadership and a point of rationale to opt out of regular internal audit scheduling is that there are other external entities performing routine/annual audits on the accounting functions.

Would like to know your thoughts.

Thank you,

VQCA

So I may be in the minority, but I successfully pushed for accounting and finance to be part of our internal audit. My logic was that we were auditing as part of our BUSINESS Management System, not just Quality, not just Financial but the business as a whole. We didn't delve into finances, but it was more about processes and records and training. We did this because our nonconformance, corrective action, and other "QMS" processes were developed to apply and include all teams/departments so that we spoke one language across the organization, with one set of tools. A tad "Lord of the Rings" but this helped us to create a common, organizational culture and not silos or pockets of systems.

They were excluded from ISO 9001, 14001 external audits.

 

[ChrisM]

One of the jobs I had my boss was a bit of a control freak so Finance was included in the QMS/BMS audit schedule.
The first couple of audits I carried out - there was always some issue in trying to agree the audit date/scope etc until I asked why - turns out it was scheduled very close to the company's financial year end. A suggestion to move the audit back a couple of months went down well and made the audits "easier" (no idea why my predecessor hadn't found that out). Whilst it is true that these audits are not required under ISO9001, they did raise a few interesting things regarding processes, I forget the specifics now but one finding concerned how a customer's credit limit was set, reviewed and amended. Changes were made as a result of the audit report.

 

[normzone]

Twice, in the last 25 years, I have followed a root cause trail regarding supplier issues that ended up in the accounting arena.

The first one was a discrepancy to the tune of nearly 100K USD of materials that could not be accounted for. That one was great fun - gentleman's agreements regarding the supplier working without a purchase order and informal transactions in and out of the building of materials requiring modifications. It was just an inventory issue until the cost of the inventory was realized, and the supplier demanded payment.

The second was the absence of auditable documented information indicating any due diligence regarding initial supplier evaluation. The only record generated from the supplier baptism was the document used to add them to the payment system

So while accounting usually claims "Out of bounds! SOX!" they are not immune to being asked to participate.