Independent Auditor - Conflict of interest question

rstocum

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#1
This matter has gotten me in a bit of trouble with a boss above my boss. I don't manage the internal audit program here, but I am considered an internal audit 'guru' because I managed the internal audit program at my last company which is much larger than the current company.

One of the internal auditors here says she cannot complete the Management Review Process Audit because she inputs data into the Management System that is used for evaluation of supplier performance & quality. She believes that her input into a subject that is reviewed in management review is a conflict of interest.

She has gotten this 'big boss' to agree. His comment is that she knows everything about supplier performance & quality evaluation and therefore cannot ask open minded questions about the management review of supplier performance & quality because she already 'knows it all'.

My take is that she enters data and prints reports that are used by the people who do the management review. Why can't she ask open minded questions about how that information is used in management review? She doesn't review supplier performance & quality - she enters the data and prints the reports for someone else to review.

Would the 'official' ISO9001 policy be that an auditor has to be completely untainted by any contact with a process in order to be considered independent enough to audit it? This place is less than 100 people and has 6 auditors. None of them are likely to be independent under those circumstances.

Now the guy who schedules the audits wants me to finish it. Unfortunately I attend the Management Review meetings, am involved in decisions, and manage the documentation of the process. I am less independent of that process than the assigned auditor. The big boss is pissed at me because I disagreed with him. Am I wrong?:frust:
 
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Coury Ferguson

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#2
Let's look at this: The Auditor performs work that is part of the Management Review process. The standard states (paraphrasing) "can not audit their own work."

Is this really auditing their own work? Maybe. However your auditing the process itself; and your looking at how the process works, the results of the process, and does it meet it's intended purpose, and company's objectives. You are not auditing the work specifically you are auditing the results.

My opinion for an answer: I don't see any conflict of interest in the situation.
 

Jen Kirley

Quality and Auditing Expert
Staff member
Admin
#3
My take on this is that she is effect an admin, taking info and putting it into electronic format for saving as management review tools and records.

If that is the case, it does not sound as though she is a stakeholder in the process. However, there is more than one type of conflict.

1) Owning or having influence on the outcomes of a process

2) Being beholden to the people responsible for the process (as in performance reviews or hire/fire authority). That is, if the person, or one of the people responsible for the process is her manager, a conflict of interest could be suspected or even unintentionally introduced.

The purpose of avoiding conflict of interest is to prevent undue influence; it can be either tangible or intangible.
:2cents:
 
C

curryassassin

#4
I don't agree. She is inputting data for supplier monitoring which is part of the information reviewed by management. She is not responsible or taking part in the management review. Therefore, she is independent and can audit the management review process. I think she could even ask questions about whether the supplier performance information is reviewed by management and whether decisions are made based on the outcome of the review.
 

Coury Ferguson

Moderator here to help
Staff member
Super Moderator
#5
My take on this is that she is effect an admin, taking info and putting it into electronic format for saving as management review tools and records.

If that is the case, it does not sound as though she is a stakeholder in the process. However, there is more than one type of conflict.

1) Owning or having influence on the outcomes of a process

2) Being beholden to the people responsible for the process (as in performance reviews or hire/fire authority). That is, if the person, or one of the people responsible for the process is her manager, a conflict of interest could be suspected or even unintentionally introduced.

The purpose of avoiding conflict of interest is to prevent undue influence; it can be either tangible or intangible.
:2cents:

Good points Jennifer.

Could influence be used to change the outcome? I don't see that as a possibility. She is providing data only, and a very small part of the Management Review process. There is a lot more input than Supplier data.

Where I would think a conflict would manifest itself would be someone in Top Management reviewing the process. That would be a conflict of interest, and the Top management Representative could influence the outcome, in my opinion.
 
Last edited:

Jen Kirley

Quality and Auditing Expert
Staff member
Admin
#6
In a well functioning system, the question of who is her boss shouldn't matter. In this case it's impossible to know her true motivation, so I just raise the possibility - this being a Dilbert world and all.
 

Coury Ferguson

Moderator here to help
Staff member
Super Moderator
#7
In a well functioning system, the question of who is her boss shouldn't matter. In this case it's impossible to know her true motivation, so I just raise the possibility - this being a Dilbert world and all.
You are correct. There could be a hidden agenda by the IA (Internal Auditor) that would need to be considered.

How true about a Dilbert world.
 

Coury Ferguson

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Staff member
Super Moderator
#8
I have moved these posts to this forum since it is about Internal Audits/Auditor. Another Moderator may move this to a different forum.
 
P

Phil Fields

#9
In our company there are three Quality Engineers with responsibility for:
• Supplier Quality
• In-house Quality
• Warranty
The information/data analysis provided by the three engineers are input to the management review process

All three of us (yes I am one of the three) are all internal Auditors, and we have all had the privilege audit the Management Review process. We are all providing input to the management review process. We are not part of the management review process, this is executive level only.

I have audited the purchasing process, with a disclaimer that supplier qualification/audit was not part of the scope of the audit so that there would not be a conflict.

Phil
 
R

ralphsulser

#10
If you have less than 100 people and have 6 auditors, then don't assign her any audits she is not comfortable with performing. I have some who don't want to audit certain areas so I don't schedule them there. If necessary, I'll just do it myself. Not a problem. Nowhere is it stated who has to audit and everyone trained does not have to audit at all if they prefer not to audit.
You are not going to win any disagreements with the big boss, so say you will review it for improvement next time and assign someone else. We have never had any issues with the registrar auditors about our scheduling of auditors.
 
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