Embedding Quality

Successful organisations clearly understand what value looks like to their customers and stakeholders. They strive to meet quality expectations by measuring performance and look for opportunities to continuously improve processes and products.

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Internal auditors are perfectly positioned to embrace quality processes to improve their internal audit function. They should clearly understand the organisation’s strategic priorities, providing them with insight into the areas where they could add maximum value to the organisation. In addition, internal auditors should strive to meet stakeholder expectations by embedding performance measurement processes focused on the most efficient and effective use of limited resources.

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Pitt Group worked with the Australian-based internal audit team of a Japanese manufacturing company to develop a quality program for their internal audit function. The company had long embraced the Japanese quality approach of kaizen (literally, change for good) that focused on quality, cost and delivery and the philosophy that solutions often exist at the ground level, on the factory floor and amongst workers. 

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The chief audit executive (CAE) wanted to adopt the kaizen philosophy in two ways: ensuring quality was built into each internal audit deliverable and engaging the audit team to identify improvement opportunities.

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Pitt Group worked with the company to review its procedures and methodologies, identifying opportunities to better align elements with the Institute of Internal Auditors Standards. They also held workshops with the internal audit team to identify areas requiring improvement and strategies for enhancing processes.  

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Working collaboratively with the CAE and audit team, Pitt Group produced the following:

• a formalised quality assurance and improvement plan

• a revised methodology and procedure manual, fully aligned with the Standards

• revised audit templates, including a preliminary risk assessment, engagement terms of reference, work program/risk and control matrix and reporting templates

• an audit moderation processes

• engagement quality checklists

• a quality self-assessment process.

 

The CAE was keen to measure the extent to which the revised processes were embedded and re-engaged Pitt Group after twelve months to assess whether the new processes met stakeholder needs and delivered value.