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In this blog we’re going to cover a critical question from an auditor’s perspective - how do I know I have enough evidence to be able to draw a factual findings of either conformance or non-conformance?
In a previous blog we talked about our sources of audit evidence. These included seeking out records, interviewing people, making observations of the work task actually happening, or we might look at some related documentation.
Using the same example from the previous video, of a crew performing roadworks on a street near you. The main questions you may now be asking are;
How many records do I need to request?
How many people do I need to interview?
How many observations do I need to make before I can draw a factual finding?
This is something that requires a bit of professional judgement. There’s no hard and fast statistical technique to give you an answer to say well if there is 100 people on site it’s going to be the square root of 100 therefore I need to look at 10 records or something like that.
It requires some professional judgement and after you have made that judgement, you can ask for a certain number of records, do interviews and make observations.
There can quite often be cases where you may have to adjust and ask for additional records and interviews (over and above your initial estimate of an appropriate sample size).
Roadworks Crew Example:
So, let’s deal with our roadworks crew and go back to an example from a previous blog where we talked about having all the staff complete the safety induction before they commence work. On occasions, if there is only a small number of staff, you could probably look at 100% of records.
Most often when auditing though, if there is 100 people on site, you are going to have to take a sample.
You don’t have time to look at 100 records, interview a 100 people and observe what they are doing 365 days a year, 24 hours a day.
It is important to understand, that in auditing you’re usually looking at a subset of the available evidence, not a 100% of the evidence.
A basic rule of thumb:
If we request an initial sample of induction records for 10 people, interview 3 people and you observe 3 staff putting out the traffic management barriers.
At the end of that first sample, sometimes you will have a very clear audit finding that can be supported with facts.
It might be that clear that all the evidence is 100% complete and accurate and show that people have been inducted and they know what they’re doing.
Time Management
One thing we have to do in an audit is manage time. So, if you’re very clear you have a finding of conformance and you can support that with facts, make that finding and move on to the next audit requirement.
At the other end of the scale, perhaps it is very clear already that something is a non-conformance. If the person being audited is saying “what do you mean safety induction? We don’t even do it” and there are no records, then clearly that is a non-conformance.
That’s at either end of the scale. Quite often though, we are a little bit caught in the middle or in a grey-area.
Out of that first sample of evidence, broadly it does look like they are conforming. They have 10 records, 9 of which are spot on but the 10th one is incomplete (half the induction form hasn’t been filled out).
This may leave you stuck in a bit of man’s land. You need to decide if this is a minor exception, and really there is evidence of conformance, or is this a repeating issue and perhaps it is actually a non-conformance?
If you are stuck in this grey area and can’t make a clear factual finding of conformance or non-conformance yet, a simple rule of thumb is to ask for more evidence. So you need to ask for more records, conduct more interviews and make more observations until you can make a factual finding.
If you ask for 5 more induction records and they are all spot on, well perhaps that is indicating conformance.
Not every system is perfect every day. If there was one incomplete record that’s fine - it’s still conforming, or if it is a repeat issue then perhaps it is a non-conformance.
Out of your first sample if you can’t make a clear finding of conformance or non-conformance you must ask for more evidence.
In our next blog we are going to look at an interesting situation that can occur occasionally, what you do if the auditee is not comfortable or is threatened with the audit process.
RESOURCE:
Download the ‘Internal Audit Training – Simple’ Document template from our Resources Page under the training section at the bottom of the page.
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