ASQ CQA – 2. Audit Process Part 3

16. 2C1 Audit report development and content

In audit process. So far we have talked about section two A and that was audit preparation and planning. There we talked about the planning part of audit. Then we looked at section two B which was related to audit performance. In audit performance, we talked about the opening meeting, the audit interviews and closing meeting, et cetera. Now coming to section two C which is audit reporting. Once you have completed the onsite part of the audit and have already completed the closing meeting, the next step as an auditor is to issue an audit report. In the closing meeting, you have already informed the audit about the audit findings, whatever you have found in the audit.

But still you need to provide a formal audit report to audit. And this is what we will be covering in section two C which is audit reporting. In audit reporting we will be talking about three things. The first one is report development and content. Here we will be talking about what all goes into an audit report which we will be covering in this video. And then in the next video I will be talking about effective audit reports. And the last part in this is the final audit report steps.

What all needs to be done as a part of final audit report? Let’s start with report development and content. In report development and content, first I will be talking about generating audit report. What are the things related to audit reports and then I will be talking about the actual contents which go in an audit report. So here are a few general things related to audit reporting. So the first bullet on this slide is that a formal audit report needs to be provided to the audit which we have already talked about. Even though we have conducted a closing meeting, even though we have given a draft report or a handwritten report or in whatever form, we have given some findings to the audit.

But still there is a need to have a formal audit report which needs to be submitted to audit because based on that the audit will take necessary actions. In some cases, the audit report might need some approval. This approval might be from the client who has ordered or requested this audit, or this approval could be from the auditor management. So the audit team leader needs to be aware of the approval requirements related to audit report. Another important thing in audit report is that audit report needs to be sent to audit well in time, whatever time frame has been agreed in exit meeting, the auditor should get that report in that time frame only.

So let’s say as an audit team leader, you have agreed with auditing that you will be issuing formal report within a week. Then make sure that you stick to that timeline. Now who all get this audit report? That audit report distribution is decided by the client or the auditor management. Most of the organizations have their own audit process and procedures which tell who all this report will go to. So as an audit team leader, be aware of the distribution. So these were a few things related to generating an audit report. Now let’s come to the content of an audit report, what all goes into an audit report. So here I have a big list of items. Not all audit reports will have all these components. Depending on the organization’s processes, you will have some or many of these items in your audit report. So let’s look at the list of items which go into an audit report. So, the first item here is the auditing organization, the organization which was audited, you need to put the name of that organization and then the purpose, scope and the audit criteria which were agreed and which were provided by the client.

These things also go in the audit report. Then identification of audit client that who has ordered, who has requested this audit, that also becomes a part of the audit report. So let’s quickly look at other items in the audit report. These are date, time and location of audit, audit team members who all were part of the audit team opening and closing meeting participants. And earlier also when I was talking about opening and closing meeting, I said that make sure that you list down the name of people who have attended opening and closing meeting because you might have to put that in the audit report. So that list also might go into the audit report then who all were interviewed, who all were talked to, that also goes in the audit report.

The reference of documents reviewed that also could be listed in the audit report. Let’s look at a few more items here on this next slide. These are audit observations versus requirements. So what all you observed against what was the requirement, so requirement was this, but actually you observed something else. So that also goes as a part of the audit report. Audit evidences, whatever you collected, these evidences could be in the form of interviews, these evidences could be in the form of documents which you have collected. Then areas not covered if any. So let’s say if you have planned for an audit and some of the areas could not be covered because of some reason, those also needs to be listed in the audit report, that this is what you have seen as an auditor and these are the areas, these are the things which you have not seen. Then audit Findings and Classification so whatever audit findings come in the form of nonconformity that are recorded in the audit report with the classification and when I say classification, this means whether this non conformity is the minor nonconformity or the major nonconformity.

And then as a part of summary, the audit report includes the conclusion about the audit which includes the statement on the degree to which the audit criteria has been fulfilled. This basically tells to what level the organization which is being audited is meeting the audit criteria. And also if there are some unresolved diverging opinion between the audit team and audit that also needs to be recorded. So let’s say auditor or the audit team says something which audit does not agree to, that also gets listed in the audit report. Another important thing which goes in the audit report is a statement. A statement which tells that this audit was done based on sampling. Because whatever audit you do, you do based on sampling. So whatever is the conclusion of the audit report is based on whatever samples were selected during the audit. Let’s look at a few more items which are typical elements of audit report, which includes the obstacle observed during audit, which could reduce the audit reliability. Let’s say if you were not given access to some area because of something, another example could be, let’s say a particular department manager or the team leader in auditing organization was not available during the audit period.

So you could not, let’s say, look at the design part. So that also needs to be recorded. That what all could not be covered, what all were obstacles which will reduce the audit reliability and then make sure that whatever good things you have observed, whatever best practices you have observed in the organization, that also should be recorded. So the audit should not just focus on the negative aspect of the organization of the audit, but also should look at the positive aspects of the audit as well. So those also need to be recorded in the audit report that what all were good or what all were the best practices being implemented in the organization. Now coming to the next item, which is the action plan to resolve finding this may be included, may not be included, it all depends upon the agreement. Generally the audit report lists down the non conformities, they don’t list down the action plan. Action plan is developed by the audit later on and we will talk about that later in this course.

But generally in the audit report you just list down the problems of the nonconformities. But if it is in the scope of the audit to list down the action plan, agree with the action plan, that also could be included in the audit report. Audit report generally should include confidentiality statement. And this is more important when you are having a third party audit or a second party audit that should tell auditi that whatever information has been collected during the audit will be kept confidential. Previously also I have talked the purpose of an audit could be compliance or the purpose of an audit could be improvement. Let’s say if you are doing an audit, the purpose of which is compliance, then what you are looking at is compliance to a standard or compliance to a set of rules.

But then you can also list down the areas of improvement. If that is in the scope of the audit or the audit objective includes to identify the improvement areas as well, then only you list down the opportunities for improvement. But if that is not the case then you just list down that what all was observed against the requirement and if there is any nonconformity that only gets listed so you don’t list down opportunities for improvement. If the purpose was just to see the compliance to a status.

17. 2C2 Effective reports

Here I have a list, which is the list of components of an effective audit report. The first item here is that report needs to be accurate. This has to be based on facts, it has to be objective rather than subjective rather than opinion. This has to be objective based on facts and figures. The report needs to be clear, the report needs to be concise. You don’t want big storage worries in the report. This needs to be crisp, this needs to be fact based. The report needs to be constructive. Rather than criticizing the audit, the report needs to help audit in achieving the objective. And report needs to be complete and timely. So these are some of the components of a good or an effective audit report. Now, there are a few writing tips which you need to understand that whenever you are writing, make sure that the sentences have clarity when you are listing down the nonconformity or the finding. That finding should clearly state that what was required, what was actually observed and what is wrong. So these three components should be there when you are writing a nonconformity.

So another thing in the report is right with readability and conciseness, the sentences should be short so that the reader can make sense out of that. Another important aspect of an effective audit report is that all the findings are listed down in a chronological order. And what does this mean? Is that how things flow? You list down the findings in that way. Let’s say your first finding was related to sales. So you list down the sales finding first. Then after sales, let’s say you move to the design part. Then you list down all the findings are related to design, and then all the findings are related to production.

Then all the findings are related to dispatch so that there is an order to these findings. This is one way of writing report. Another way of writing this report could be group these based on the functions or group. So there could be, let’s say, three findings related to sales. So club them together. Then there are, let’s say two findings related to design. Make them together so that the design group look at those findings, production group could look at the findings related to production and so on. So make sure that there is appropriate grouping of findings. Any findings which you list down in the audit report should have specific references. So let’s say if you looked at a specific piece, piece number, let’s say 3470 or something, item number 3470, if you look at that list on that that you picked item number 3470, in that the dimension was not matching the drawing. So that if someone wants to go back and look at that finding, it should be easy for that person to find out that problem. Let’s say if you look at a drawing, drawing number ABC zero. So list down the whole drawing number and the revision number so that people can go back and look at that particular drawing and that particular revision number. So list down the references properly when you are listing down the findings. Another important thing which you can do in the audit report is use graphical and analytical tools to highlight the key message. Let’s say if your key message was related to the repair rate going high with time, then if you have a graph there which tells that this is month by month trend of the repair rate and which is going up, that gives a very clear message that with time the repair rate is going up. So this is something which you can use in the audit report. Use graphs, charts, tables so that your message is conveyed clearly. We will be talking about the graphical tools and analytical tools later on in section five A and five C of this course. So previously we talked about some of the things which you should do when you’re writing an audit report. Then here are some of the things which you should avoid. You should avoid using too many acronyms.

Acronyms such as CA for Corrective Action, PA for preventive Actions and then if you go to any organization, there are hundreds or thousands of acronyms each organization will have. So when you are talking to some people, some people might understand, other person who is not working in that organization might not understand those acronyms. So make sure that either you explain those acronyms when you use them first time in the audit report or if possible, avoid having too many acronyms in the audit report because these audit reports are read by people who are not part of the organization as well.

Another thing which you need to avoid is technical jargon and too complicated language. So make sure that you use simple language in your audit report previously. Also, we talked about timely issue of the report. So you should issue the report in the time period which you have agreed in the exit meeting. So if you issue the report late, that really doesn’t help auditing to take appropriate actions in time. Also, don’t forget to include some positive aspects which you have seen in.