In the lecture, Dr Simon talked about two types of quality audits, the major audit performed by an outside agency, it could be the FDA or ISO and the internal audit performed by the company itself. The internal audits can find issues in the quality system that maybe a major audit did not even found. Therefore, the quality employee has to take it seriously and find a corrective action to resolve it. What do you think are the advantages and disadvantages of conducting an internal audit?
Pros to internal audits
When an internal audit is performed you can be sure that a proper accounting system is going to be introduced into your company. If you have never worked in an accounting office or seen what goes on in there then you will not appreciate the fact that if things are set up wrong, everything can go wrong. There is a huge need within companies to have an orderly arrangement of personnel, procedures, forms, etc. in order to achieve a positive outcome. With in internal audit businesses are better able to handle business concern. An auditor can tell you where your weaknesses are and what you can do to improve them.
Management can review progress through internal audits. In fact management should rely heavily on internal audits for best results. Internal audits are helpful to have control over all business activities, which is a management function. Through an internal audit a manager can remove difficulties and look forward to much smoother working.
Internal audits can eliminated or at least reduce the chances of fraud happening within your company. Internal auditors are often times appointed by the company to keep a watchful eye on staff members such as clerks and certain accounts so that fraud does not happen. Accounts are audited on a continual basis and that's why there is less chance of fraud happening.
An internal audit can also help cut down on the external auditing for the company.
Internal auditors can be appointed any time by any company; they can make things a lot easier for the whole company.
Cons to internal audits
Internal auditing can sometimes fail to check planned frauds. Management can play many tricks in order to manipulate accounts to conceal inefficiencies. These types of frauds are not disclosed and the audited accounts will not always show a true and fair view. If the information from management is false then there is room for fraud and therefore internal audits can sometimes yield undesirable results.
Auditing can fail to disclose the correct information of what's happening. Background entries may not be totally clear to audit staff and management may be vague on their clarifications. Whether or not these things happen, an auditor still has to give his report.
Another disadvantage to audits is that they don't always show the true picture. An auditor's purpose fails when they don't see the real business affairs; the view of the audit is altered.
As the person above me went into great detail about the pros and cons of internal audits. I will add that it depends on the company you are working with. Some companies may play tricks to hide any inefficiencies while others will audit in great lengths. Here is the benefit of doing a fair unbiased internal audit. In the long run, the company will not run into major issues on their quality system. If a company hides something in the internal audit and after two years FDA or ISO do a complete audit of their quality system, it will do more damage than the minor inefficiencies that were hidden from an internal audit. In addition, at the end of the day its a business and companies that are way ahead of everyone else make sure their internal audits are unbiased and point out any inefficiencies which may create a loss for the company's business in the long run.
So its the matter of where a company sees itself in the future when it comes to internal audits. I rather have the internal audit point out flaws than an outsider which will result in major loss of business.
I would agree with the points made above and believe that they highlight the main pros and cons. I would also agree that it is largely up to the company to decide how they would like to conduct internal audits as it can have a great impact on their future. Internal audits can be a great benefit to allow companies to plan for full audits and be fully prepared before they occur. However if they fail to recognize the key areas that will be audited, and believe all will be well they can be setting themselves up for failure.
Great question, neb2.
I’ve been a part of an internal audit once before and the main advantage that I saw as a result was that it introduced to everyone what an external audit would be like and it trained multiple employees on how to handle audit questions and answers. As Dr. Simon said in the lecture, external audits can carry on for quite some time, even days. Employees need to be trained on how to answer questions when asked about a topic, and where to quickly find the documentation that the auditor asks for. Someone needs to be responsible for being a “runner” to retrieve the proper documents; someone is a secretary, and sometimes even a back up secretary; someone in charge to act as a liaison, etc. The time to learn these responsibilities is not when the FDA officer walks through the door and an internal audit is useful for that. Additionally, it gives your company a chance to catch major problems before a governmental authority does.
The only disadvantage that I have seen with internal audits, as Dr. Simon mentioned, is bias or unwillingness to speak up about a problem prior to the audit. For example, if QA is conducting the audit and they notice problems prior to the internal audit but do not voice them until the audit, it can create tension among coworkers. Concerning bias, QA can overlook something that they previously misconducted and either do not want to get themselves in trouble or honestly believe that it was not a mistake the first time but continue to miss the same issue a second time. Overall, an internal audit can help to catch minor problems before they become major ones or they can save you a bigger problem when conducting an external audit with the FDA later.
From my experience with dealing with internal audits, the purpose of it is to prepare the company from a major audit that would occur by the FDA. It allows the company to do a thorough search to find potential holes and gives the company time to address any issues. So when the FDA rolls around the company would pass their audit. For example, recently the company I work at conducted an audit on our DHF. During that they noticed, that software verifications of requirements were done on different iterations of software because as new software is released there are new functionalities to verify against requirements. So the justification or design review of notifying why it was acceptable to have verifications on older SW iterations, was not enough. More in depth analysis of the code to show that the functionality that was tested on older software was not touched as newer versions of software was released would be required to be proven.
We are actually doing an internal Audit either next week or the following. The biggest advantage about the internal audit is that potential issues can be addressed early before the outside auditor arrives. A corrective action can be initiated to address these problems early, thus when the external auditor arrives they are aware that actions are taken to address underlying issues that were discovered within the internal audit. I would assume that the biggest con would be bias towards inspection because unlike an external auditor and internal one is more familiar with most areas of inspection and company procedures which could indirectly effect the results of the audit.
Great question! Gh56 goes into wonderful detail about the pros and cons of conducting an internal audit and I’m sure all students can agree with his response. From the time that I started working at the medical device company that I am currently employed at, I have been fortunate enough to be a part of two external audits and one internal audit conducted by QA. Although quality is quite familiar with the R&D lab, he still made a thorough and efficient run through the equipment and asked detailed questions when he was unsure about what the equipment actually does and when it was last calibrated/how often it goes out for calibration. The audit was completely unbiased and it greatly impacts the future of the company in beneficial ways because it helps us prepare for external audits and helps us focus on lab procedures, documentation, and equipment that might be questioned. It helped all employees prepare for upcoming questions asked by other audits that are critical to the success of the company. However, I can see how internal audits can be a problem in different companies because the process can be bias and whoever is conducting the audit can be unwilling to voice their opinion and point out major or minor flaws.
I've also been at a company, where they would do internal audits, but would bring in auditors from another location as to make it seem it was an external audit. It proved to better results, and honesty from the workers.
I think that internal audits can help streamline a business and find problems that perhaps a lax enviornment has perpetuated. Internal audits are more effeicient and can help spot problems in application of SOPs, safety hazards or even documentation control.
Internal audits are a great opportunity for a company to learn and grom It can evaluate processes and ensure that company is meeting quality standard The goal is to gather information about the effectiveness of the quality system . Internal audits allow to compare the day to day practices of quality management processes against documented policies objectives procedures It ensures that you are doing what to do to manage quality and to satisfy the regulatory requirement Internal audit points the area of improvement and yield cost effective solution Conducting an internal audits causes an extra cost to the company which is considered as burden There are chances that auditors may not reveal errors or frauds that effect the company Also revealing the error in the company can have a big impact to company It can be a reason why company will be decline Proper training preparation and execution of audit can prevent the result from being biased which is also a drawback of internal audits
I agree with previous comments about internal audits and would like to sum up and expand the pros and cons for this type of audits.
1. It helps compare your practices and processes against proposed prodecures and make corrections
2. It reduces the risks/chances of frauds
3. It ensures that accounting staff keep records up to date and are vigilant
1. I don't agree with @gh56 about the cons for internal audits. Any type of actions/audits can fall to planned fraud, not just internal audits. But I agree that internal audits are not full proof that it can catch all the frauds.
2. Internal audit are mostly hired from outside of the company, therefore, they may not work for the betterment of the company, but just for profit.
3. Internal audits mean additional costs for the company.
Internal audits are essential to medical device companies because this creates a controlled environment in which the company can comprehensively evaluate how they are doing in terms of their Quality System. Internal audits are less variable than one from a private company or the FDA or ISO. I have taken part in an internal audit, and we had a day prior to the real audit to practice. During this mock audit we made sure the system was running smoothly and every participant could perform their role efficiently. An internal audit would reveal to the company its own weaknesses and where there are holes or improvements to be made. This is important for a company to understand before undergoing an unannounced external audit.
An internal audit may find issues in the quality system that the major audit may not have found. However, it would seem that this might not be effective. With an internal audit, the audit is completed by the quality employee working at the company itself. One factor to consider is the fact that the auditor might not be completely honest with their findings because they work at the same company and they do not want to make the company look bad. In addition, when a person who works at the company is reviewing their own work, they might overlook certain aspects because they have seen it before. With a major audit, it is an outside person reviewing the work, so they will look in more detail at the company.
Pros of internal audit:
1. Improve efficiency in operations
2. Ensure compliance with laws and statutory regulations
3. Risk assessment
4. Provides observations and recommendations to improve processes and controls
5. Identifying gaps, also known as “trouble spots,” where procedures and controls are not properly designed
6. Ability to correct issues before an outside audit takes place
7. Saves company money
Cons of internal audit:
1. Can’t catch all errors