KPI (Key Performance Indicators) for the Audit Process

[QAMTY]

Hi
Does anybody could share thoughts about KPI for the auditing process?
I have defined 2.

1 compliment of the scheduled audits.
2 Quantity of findings in each process maximum = 2.

But it seems for me that 2nd KPI, it is not too much useful for the Auditing process, since nc's belong to the audited process, not to the auditing process.

Any Idea on this issue?
what KPI's do you manage?

Thanks

 

[kmyers]

Re: KPI for audit process?

Why do you need a kpi for the auditing process? If anything I may place a kpi to the corrective actions if any as a result of the findings. Meaning were they handled correctly, were actual changes made, was the corrective action verified.

 

[hogheavenfarm]

Re: KPI for audit process?

Remember for KPI's, "You get what you measure".
Measuring "findings" as a KPI will drive that number, probably not the best idea.
How about "findings corrected"?

 

[QAMTY]

Re: KPI for audit process?

But I think what I need to measure it is how the auditing process is working.,If I measure the corrected findings I m measuring the audited process.

 

[Candi1024]

Re: KPI for audit process?

Ok, if I wanted a KPI for an audit process, I guess I would ask what I want the audit process to do. I want it to cover all assigned areas. I want them done as scheduled or by a deadline, I would want the report distributed properly, maybe proper follow-up or communication?

Do you have a process for auditing? Have someone audit you to see if you are following the process, then use that as a KPI.

 

[Project Man]

Re: KPI for audit process?

If the purpose of the audit is to, "add value and improve an organization's operations", then the KPI should help you measure this.
An audit should, "evaluate and improve the effectiveness of risk management, control, and governance processes."
You should measure two things:
1. Did you do the audit and did you follow your schedule?
2. Did you add value and improve anything? This is measured in the corrective actions

BTW - Neither of those are quantified with "number of findings".

 

[Andrej]

Maybe you can get some useful information about KPI at http://kpilibrary.com/?aref=biweekly
KPI Library is a crowd-sourced repository of Key Performance Indicator Definitions
It is free to join.

 

[Steve Prevette]

I do metrics on assessments and audits at several nuclear facilities. All of these are designed to be used in conjunction with SPC so you can tell if things are significantly increasing or decreasing.

1. Number of audits conducted per time interval (month / quarter / year depending upon scope of program). Mostly looking for a stable, continual process. Alternately, measure number of line items (lines of inquiry) if scopes of audits vary.

2. Percent of audits completed on schedule.

3. Percent of audits resulting in findings / opportunities for improvement (whatever your terminology is).

4. Percent of all corrective actions that are a result of audits (versus self identified by the line management)

5. Percent of audit findings that are "repeat" (this can be hard to define).

6. Cycle time for correction of audit findings.

7. Effectiveness of corrective actions on audit findings (usually a result of an effectiveness review).

 

[Jen Kirley]

I have struggled with what KPIs would be appropriate for the internal audit process. Steve's examples are very good, but I would like to suggest we separate the corrective action, as that is another opportunity for KPI - especially as CARs can be issued for various reasons.

If we must make a KPI for a support process like auditing, it makes sense to ask ourselves what the KPI is telling us.

- If resourcing is the issue (let us remember the term issue is often thought of in negative connotation, but it could be positive), "Audits completed as compared to audits scheduled" seems to make sense. Let us keep in mind the result could be indicating more than one thing. For example:

--- The Internal Audit Team members' availability, if the duties are not their primary responsibility. This could reflect on management support of the program.

--- The accuracy in scheduling, particularly when concerning complex audits and the fact that a good process audit can require more time than the typical gap analysis approach used to do; especially if the process audit reveals audit trails to pursue until the issue is researched and understood adequately to determine effectiveness.

 

[x-files]

There are several web resources on that:

"Performance indicators may include reducing the number of – late or delayed audits, incomplete audits, incomplete audit records and late reports, auditor errors, auditee complaints, and use of untrained auditors, etc."

(just google few keywords, maybe you would like KPIs' for other processes)

My favourite is "auditee complaints..."