Internal Audit Questions - Accounting - ISO 9001

J

jackweed13

#1
The scope of my internal audit was based on the scope of the management system. One of our departments in our scope (Accounting) was involved in the internal audit as a supporting process. We touched on several of their processes but a complete document review was not completed. Is this required prior to our certification audit? Must you perform a complete document review of all groups in the scope? We audited to the standard not the department. IS this a mistake?
 
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Ron Rompen

Trusted Information Resource
#2
Re: Internal Audit Questions

You didn't mention which standard you were being audited to, but I will assume (for the moment) that you are pursuing either TS16949 or ISO9001.

In my past experience, Accounting/Finance is generally not included in the scope of a certification audit; the requirements for this are generally specified in other legislation, and are audited separately from the management system.

With that being said, it never hurts to perform your own review of the documentation process, to see where it interfaces with the rest of your system, and to ensure that it conforms to the same sort of standards that the rest of your processes do. One of the biggest inconsistencies that I have found over the years is the documentation system; Finance/Accounting always seems to have their own system, which never seems to match up to the rest of the company.
 
J

jackweed13

#3
Re: Internal Audit Questions - ISO 9001

Hi Ron. Thanks for the quick reply. We are being audited to the ISO9001:2008 Standard. As you probably know, Accounting is subject to many internal audits for many different reasons. We selected the processes with could effect the product and/or customer. Our external audit is next week. During the management review this question came into play. There was no specific audit of this group alone. They were only involved from a supporting role. Will that be good enough for the auditor? Could he fail us based on the fact that group did not receive an internal audit on their systems alone?
 

qusys

Trusted Information Resource
#4
Re: Internal Audit Questions - ISO 9001

This is a matter of your internal audit plan and your related internal procedure.
If you have not selected the process or the management gave no input about it , you are in compliance.
On the contrary, if there have been some problem ( non conformities) in the support process to other core processes ( whose root cause has been addressed to accounting process) , you should have audited it as well.
I assume that you are not impacted by this issues.
However, the Registrar audit will assume the process of documentation control and record retention and could be also interview and check for evidence the Accounting process as well.
Remember that the audit will be based on process approach, so all the organization will be affected in a cross over manner.
To respond to your question , it is not important to have internally audit the accounting department, but to have assessed how it contribute to the compliance to standard of the organization, fo rexample in management of their documentation control or their records, based upon your internal procedure and compliance to the requirements of the Customers.
Hope this helps


Hi Ron. Thanks for the quick reply. We are being audited to the ISO9001:2008 Standard. As you probably know, Accounting is subject to many internal audits for many different reasons. We selected the processes with could effect the product and/or customer. Our external audit is next week. During the management review this question came into play. There was no specific audit of this group alone. They were only involved from a supporting role. Will that be good enough for the auditor? Could he fail us based on the fact that group did not receive an internal audit on their systems alone?
 

somashekar

Staff member
Super Moderator
#5
The scope of my internal audit was based on the scope of the management system. One of our departments in our scope (Accounting) was involved in the internal audit as a supporting process. We touched on several of their processes but a complete document review was not completed. Is this required prior to our certification audit? Must you perform a complete document review of all groups in the scope? We audited to the standard not the department. IS this a mistake?
It is not a mistake but is maturity to involve the accounting as a supporting function in the QMS. How accounting comes in and performs certain activities to close loop of the various interdependent activities is the matter you are concerned with. You do not need to make or touch upon documents that accounting may have. Neither will the certification audit be keen on them. On the contrary the audit report should mention about accounting identified as a support function as one of your strong aspect.
 
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S

samsung

#6
It is not a mistake but is maturity to involve the accounting as a supporting function in the QMS. How accounting comes in and performs certain activities to close loop of the various interdependent activities is the matter you are concerned with. You do not need to make or touch upon documents that accounting may have. Neither will the certification audit will be keen on them. On the contrary the audit report should mention about accounting identified as a support function as one of your strong aspect.
Why not ? just curious to know when accounting is identified and being managed as a process like any other process within the QMS, why not the process documentation of accounting be looked into? And if this aspect is ignored, will the intention of the management to include it as a (supporting) process within the QMS be fully realized ?
 

somashekar

Staff member
Super Moderator
#7
Why not ? just curious to know when accounting is identified and being managed as a process like any other process within the QMS, why not the process documentation of accounting be looked into? And if this aspect is ignored, will the intention of the management to include it as a (supporting) process within the QMS be fully realized ?
I would be keen to know and understand what the " process documentation of accounting " is as mentioned here. Is it about the principle of accounting and the double entry system of book keeping ?
If it is this, then the independent financial auditor, bankers and other financial institutions will be involved on a regular basis, being a statutory requirement.
 
S

somerqc

#8
We have accounting as a critical aspect of our QMS.

Why?

1. Are you able to service your customers if you don't have cashflow? (re: not invoicing in a manner that ensures consistent cashflow)

2. Are you able to obtain necessary materials if you don't pay your bills? (re: accounting not paying bills as required?)

3. Are you able to not overpay for invoices if accounting does do what they should related to returned product? (re: debit/credit the vendor's account accordingly)

I guess I may have been around the block too many times to not include accounting in any QMS I create going forward.

When auditing accounting I do not worry about looking at the G/L etc. I look at the processes that accounting controls that may affect our ability to service our customers.
 
S

samsung

#9
I would be keen to know and understand what the " process documentation of accounting " is as mentioned here. Is it about the principle of accounting and the double entry system of book keeping ?
If it is this, then the independent financial auditor, bankers and other financial institutions will be involved on a regular basis, being a statutory requirement.
Any accounts process owner would certainly not prefer to have 'Principles of accounting' as part of his process documentation in the same way as a maintenance process owner wouldn't wish to have a document on 'principles of mechanical or electrical engineering' in their documents' list unless it's absolutely required by the QMS and I don't think it does.

As part of process documents they may have documented 'accounting policies', a documented process plan, quality plan, work instructions on how to carry out certain key activities, responsibilities/ authorities, record management & control, process objectives and many more like any other process documentation.

If it is this, then the independent financial auditor, bankers and other financial institutions will be involved on a regular basis, being a statutory requirement.
Yes, they must be doing 'financial audits' at regular intervals and the management must be well aware of it while deciding to include this function within their QMS.
 
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Z

zekeQA

#10
Hi,

I have to agree with somerqc. I have been involved in many companies...in positions both inside and outside of the accounting office.

It seems to me that many times the accountants do not understand the processes that they are supposed to be accounting for. At the same time the operations people often do not speak "fluent accounting". This often leads to errors.

I heard of one company recently that was doing monthy or weekly cycle counts. (This is usually triggered by an auditor finding problems in the inventory numbers.) The cycle counts did not seem to include the parts that were showing in inventory, but were being staged to be shipped to customers. Unfortunatly, the individual who described the situation to me (now working for a different company) had it associated with "lean" management methods.

I think if you leave the G/L entries out and monitor the procedures you are doing great!
 
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