Internal Auditor Productivity Metric?

S

split-cane

#1
Howdy y'all.

I'm trying to develop an overall productivity metric for internal auditing. It's intended as a barometer, not a super-precise, dictatorial, gotta-meet-the numbers metric. And, I don't want any auditors auditing "to hit the numbers". Productivity to me means something like: ouput / resources (or cost). Doing more with the same resources or doing the same with fewer resources. And I don't want anything like # of findings or recommendations per audit. I'm talking about AUDIT PROGRAM productivity, not results of audits. There's a bit of a wrench thrown in due to audit variability, the planning of audit time, the fact that all of the auditors are part-time, etc., i.e. sometimes output changes correlates directly with input change. Any kind of ROI analysis would be done separately at this time. Our schedule is planned around audits assigned per quarter. Get it done in a quarter and you are good to go.

Any ideas welcomed!

Thanks!
 
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Marc

Hunkered Down for the Duration with a Mask on...
Staff member
Admin
#2
Are you wanting metrics for the system or the individual auditors?

You might want to look through these existing threads in Internal Auditor Metrics to start out.

The only metric I have used is are audits performed on time, but that's more of a system metric than a metric to use to 'rate' an individual.
 
S

split-cane

#3
Hi Marc.

Thanks. System. The problem with productivity and audits, though, is most of the things that make auditors more productive (a) are really tough to quantify and (b) seem like inputs that would correlate directly to outputs and therefore a change in the inputs would change the outputs and make it very difficult if not impossible to measure any improvement on it's own terms. If productivity is outputs/resources, the problem is I determine the resources and they are predetermined. Same for the outputs. Since I don't have them full time, nor for a set amount of time each quarter, I couldn't really ask them to do more audits than what is on the schedule. Since every audit is planned out, I can't say, Wow! You guys interviewed an extra 4 people...look at that productivity! Know what I mean?

Thanks for the thread link. I'll have a look.
 
S

split-cane

#5
Sorry. The annual internal audit plan/schedule (all the audits, some scheduled, some "pull" audits from Mgmt) plus the docs, templates, methods, team, etc. Kit and kaboodle.
 

Sidney Vianna

Post Responsibly
Staff member
Admin
#6
I'm talking about AUDIT PROGRAM productivity, not results of audits. ...SNIP ... Any ideas welcomed!
Can you dissociate the two? In my experience, when it comes to internal audits, people will do the least possible effort that "passes" the scrutiny of a verifier, e.g., a CB auditor. Most organizations do not care about "audit productivity" nor audit results because they see internal audits as a non-value added exercise.

I am not sure how you can really measure audit productivity, dissociated from audit results.

You can assign 4 morons competence-challenged internal auditors to perform an internal audit of a highly dysfunctional process and they will not find anything of significance to report, after 2 hours of "investigation". And you can assign one experienced and competent auditor to assess the same dysfunctional process and s/he will come back with a meaningful report of where in the process weaknesses exist and a laundry list of opportunities for improvement, after 3 hours of interviews and observations. Which one is more "productive"?

In my mind, you can't separate audit results from productivity. They go hand in hand.
 
S

split-cane

#7
Right. I hear what you are saying and it seems right on. But, I don't want the audit team nitpicking or finding non-value add issues just to make the metric happy, if you know what I mean. Obviously, I wouldn't choose people that would be likely to do so, but ...

My intent is to create an audit program that works and is focused on adding as much value as possible while satisfying audit requirements.

Thanks!
 

Stijloor

Staff member
Super Moderator
#8
Right. I hear what you are saying and it seems right on. But, I don't want the audit team nitpicking or finding non-value add issues just to make the metric happy, if you know what I mean. Obviously, I wouldn't choose people that would be likely to do so, but ...

My intent is to create an audit program that works and is focused on adding as much value as possible while satisfying audit requirements.

Thanks!
The most effective way to add value to an audit process is encourage the auditors to look for potential problems in the various processes that make up the quality management system. Where and in what manner are the processes at risk? What can possibly go wrong? Now, this approach requires you to have auditors that know how processes work. They must understand the Process Approach. If you put some metric in place based on some hope or estimation; trust me, the numbers will be there..

Stijloor.
 
A

Anton Javier

#9
Right. I hear what you are saying and it seems right on. But, I don't want the audit team nitpicking or finding non-value add issues just to make the metric happy, if you know what I mean. Obviously, I wouldn't choose people that would be likely to do so, but ...

My intent is to create an audit program that works and is focused on adding as much value as possible while satisfying audit requirements.

Thanks!

A metric that you can take a look at could be:

1 % completion of non-conformity close-outs
2 # of repeat non-conformances
3 TAT of minor/major non-conformances

Well, just my 3 cents worth...

Anton Javier
AIG Business Processing Services
 
S

split-cane

#10
Thanks, y'all, for the responses so far. Keep 'em coming.

Anton, I'm using something similar to #1 for cycle time, but average closure time rather than % closed.

#2 I would probably assign to some sort of corrective action metric in our quality group.

#3 Sorry to be obtuse, but what is TAT?

Thanks!
 
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