Client requires to witness an Internal Audit of our Sub-Contractor

[alex_pmt25]

Dear Experts,

I am an internal auditor of a company. One of our prestigious client requires to witness an internal audit of one of our sub-contractor by us.

We are basically into engineering design and consultancy (oil and gas). We have outsourced a part of the design project i.e. instrumentation and mechanical to a sub-contractor.

I am a novice as far as auditing is concerned. Can anyone guide me.
What are the things I should look into?
What are the questions I should ask our sub-contractor?
What are the records I should check with our sub-contractor.
Regarding document…what needed to be checked?

Please guide and advise

Alex

 

[Phil Fields]

Dear Experts,

I am an internal auditor of a company. One of our prestigious client requires to witness an internal audit of one of our sub-contractor by us.

We are basically into engineering design and consultancy (oil and gas). We have outsourced a part of the design project i.e. instrumentation and mechanical to a sub-contractor.

I am a novice as far as auditing is concerned. Can anyone guide me.
What are the things I should look into?
What are the questions I should ask our sub-contractor?
What are the records I should check with our sub-contractor.
Regarding document…what needed to be checked?

Please guide and advise

Alex

Your post brings several questions:
• Is it really an audit that the customer needs to witness?
• How was the supplier picked and added to the approved supplier list?
• Is there a contract with stated deliverables for the outsourcing?
• Are these outsourcing activities directly involved with the customer's project?

Without more details it is hard to give advice, but it sounds like a project review might be appropriate.

Phil

 

[AndyN]

Dear Experts,

I am an internal auditor of a company. One of our prestigious client requires to witness an internal audit of one of our sub-contractor by us.

We are basically into engineering design and consultancy (oil and gas). We have outsourced a part of the design project i.e. instrumentation and mechanical to a sub-contractor.

I am a novice as far as auditing is concerned. Can anyone guide me.
What are the things I should look into?
What are the questions I should ask our sub-contractor?
What are the records I should check with our sub-contractor.
Regarding document…what needed to be checked?

Please guide and advise

Alex

Firstly, an audit of your sub-contractor isn't, by any definition, an 'internal audit'. That audit, if done by yourself, is a second party or supplier audit. Does your client want to visit the sub-contractor to see you audit them?

The skills of an internal auditor aren't too different from a supplier auditor. You say you're an internal auditor, so don't you have any experience or training?

 

[jkuil]

If you are a novice as far as auditing is concerned, I would recommend that your client would lead the audit rather than you.

To collect your questions you can:

• assess the contract between you and the design contractor
• assess the design project file available at your compagny Especially the information provided for design review meetings might be a rich source for questions.
• interview the project manager and QA representative in the design team (what are their major concerns or identified risks related to the outsourced process; what is their experience with the subcontractor)

 

[somashekar]

Dear Experts,

I am an internal auditor of a company. One of our prestigious client requires to witness an internal audit of one of our sub-contractor by us.

We are basically into engineering design and consultancy (oil and gas). We have outsourced a part of the design project i.e. instrumentation and mechanical to a sub-contractor.

I am a novice as far as auditing is concerned. Can anyone guide me.
What are the things I should look into?
What are the questions I should ask our sub-contractor?
What are the records I should check with our sub-contractor.
Regarding document…what needed to be checked?

Please guide and advise

Alex

Hi Alex.
Welcome here .....
This is a three party deal and if you show some surprise here, then I feel you have not assessed your clients requirements and translated into outsourced control requirements.
As a part of your control exercised on your design project out sourcing, your periodic auditing needs to be listed & communicated to the service provider (Design services agreements) and it must also have the permission from them for your client to audit / witness this source included.
If this is a new and surprise request from your client, then you have to take the necessary time to establish this new request with your out sourced agency also, before he welcomes them along with you.
These are matters of company policies and must be dealt with before you agree with your client and out-sourcing agencies about your business process.
I would suggest that someone trained in internal auditing and familier with the proceses that you expect at the out-sourcing agency lead this audit.