Conducting regular audits can help the line managers identify problems as well as areas of improvement for efficiency, quality, accuracy, speed, compliance & safety. The heart of any operational audit is the checklist, which determines the effectiveness of the audit in unearthing the gaps & opportunities.
A checklist can be a simple yet powerful tool that can be used to stay focused and ensure the entire scope of the audit is covered. A superficial & high level checklist just looks at the tip of the iceberg and address the problems that have already surfaced. The real purpose of the operational audits is to proactively identify and nip the problems in the bud, before these start harming the business.
So, how do we design a checklist that not only digs deeper but also provides a 360 degree view of the operations. Preparing audit checklist and the rating criteria are very important part of the audit preparation.
Tips for Smart Audit Checklists:
- Align with the objectives and the scope of the audit: For example, the objective could be either identify the root cause of certain pain points or ensuring compliance to a standard. The checklist should accordingly cover those questions or points that are relevant for the audit as well as cover the entire scope.
- Apply PPT framework: PPT (Processes, People & Technology) are the key drivers of operational effectiveness. Each aspect of the audit should be evaluated from all the 3 angles of PPT. For example, the check point related to batch control in the warehouse should cover
- – Process of batch-wise storage including checks & controls
- – IT system to record the batch-level inventory
- – Training people on batch control procedures
- Refer to appropriate standards or documents: The sources of information for the checklist could be:
- – ISO standards
- – Internal controls document
- – Risk assessment document
- – Previous audit observations
- – Key pain points & reported issues
- Keep the check points manageable: A very long list of questions could dilute the focus from the core areas. Also, a long checklist may consume lot of time without adding much incremental value. Also the questions must be categorized under logical categories, so that results could be analyzed at the category or sub-category levels and not just an overall rating.
- Sequence the questions in logical order: