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Re: Internal Audit Questions - ISO 9001
First of all, I believe that you have taken the smart and logical approach to auditing by incorporating the Accounting process. As a 3rd party and internal auditor I almost always included Accounting in my audits. There is astill a great debate whether Accounting should be audited, but I say YES and here is why:
- A/P (aka Accounts Payable): as part of the business process the organization needs to know when and how to pay their suppliers. Failure to pay a supplier as agreed on terms can result in the supplier not delivering materials and components when needed or even stopping to conduct business with you. In today's economy, this holds truer than ever as more and more suppliers want to be paid on time before they deliver again. Anyone who does not believe this is a fool.
- A/R (aka Accounts Receivable): as part of the business process the organization needs to be paid on time as agreed on terms. Anyone with some business sense can attest to the importance of cash flow, specially steady cash flow. Failure to get paid on time can put the organization in situations where they are not able to pay their employees, their suppliers or keep the doors open. It also can put the organization at high risk if the customer files for bankruptcy. It has happened many times where a suppleir shut down because they had too much money tied with a bankrupt customer.
(Note: I never got into the financial details of any organization, looked strictly at the process and how it interracts with the other processes)
These are my main reasons to support my position. As one can see and deduce, a failure in A/P and/or A/R can ultimately have a negative effect on the organization;s ability to satisfy customer's requirements. Isn't this one of the main points of a QMS?!?
I believe that you will be just fine in your audit. There are no specific documentation requirements applicable to the Accounting department other than as required by laws. The record retention is also often dictated by laws. The only area that could be questioned is the performance indicators and the actual performance of the Accounting department. I have seen A/R departments that monitor the accuracy of their invoices (customer disputes = payment delays), the past-due balance by number of days for example and/or the time between shipping and invoice submittal. Also A/P departments monitored outstanding invoices by numebr of days and/or invoice accuracy vs. receiving records (and sometimes fed supplier's performance into the overall supplier monitoring parameters).
As some of the postes have indicated, Accounting is one of the fuzzy areas that many 3rd party auditors avoid. Therefore it is a good chance that the process will not get audited. What I am trying to say is not to worry too much about this. It is great if you can pass a registration audit without any findings, but it is not unusual for 3-4 findings. Once you get part 10 findings then you need to take a serious second look at your QMS. 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?
First of all, I believe that you have taken the smart and logical approach to auditing by incorporating the Accounting process. As a 3rd party and internal auditor I almost always included Accounting in my audits. There is astill a great debate whether Accounting should be audited, but I say YES and here is why:- A/P (aka Accounts Payable): as part of the business process the organization needs to know when and how to pay their suppliers. Failure to pay a supplier as agreed on terms can result in the supplier not delivering materials and components when needed or even stopping to conduct business with you. In today's economy, this holds truer than ever as more and more suppliers want to be paid on time before they deliver again. Anyone who does not believe this is a fool.
- A/R (aka Accounts Receivable): as part of the business process the organization needs to be paid on time as agreed on terms. Anyone with some business sense can attest to the importance of cash flow, specially steady cash flow. Failure to get paid on time can put the organization in situations where they are not able to pay their employees, their suppliers or keep the doors open. It also can put the organization at high risk if the customer files for bankruptcy. It has happened many times where a suppleir shut down because they had too much money tied with a bankrupt customer.
(Note: I never got into the financial details of any organization, looked strictly at the process and how it interracts with the other processes)
These are my main reasons to support my position. As one can see and deduce, a failure in A/P and/or A/R can ultimately have a negative effect on the organization;s ability to satisfy customer's requirements. Isn't this one of the main points of a QMS?!?
I believe that you will be just fine in your audit. There are no specific documentation requirements applicable to the Accounting department other than as required by laws. The record retention is also often dictated by laws. The only area that could be questioned is the performance indicators and the actual performance of the Accounting department. I have seen A/R departments that monitor the accuracy of their invoices (customer disputes = payment delays), the past-due balance by number of days for example and/or the time between shipping and invoice submittal. Also A/P departments monitored outstanding invoices by numebr of days and/or invoice accuracy vs. receiving records (and sometimes fed supplier's performance into the overall supplier monitoring parameters).
As some of the postes have indicated, Accounting is one of the fuzzy areas that many 3rd party auditors avoid. Therefore it is a good chance that the process will not get audited. What I am trying to say is not to worry too much about this. It is great if you can pass a registration audit without any findings, but it is not unusual for 3-4 findings. Once you get part 10 findings then you need to take a serious second look at your QMS. Hope this helps.

