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Audit

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Pre-aquisition or conveyance audits. Regulatory compliance audits ... Pre-aquisition or conveyance audits. to determine liability of new acquisitions ... – PowerPoint PPT presentation

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Title: Audit


1
Audit
  • Audit, Oxford English Dictionary
  • To make an official systematic examination of
    (accounts), so as to ascertain their accuracy.

2
Audit
  • An environmental audit consists of collecting and
    assessing audit evidence in order to determine
    whether or not the audit subject matter conforms
    with the audit criteria.
  • It is a tool that is used to check whether a
    company is doing what it should be doing.

3
Audit
  • There are many reasons to conduct an audit and
    they will be reflected in the scope and
    objectives of the audit.
  • Pre-aquisition or conveyance audits
  • Regulatory compliance audits
  • Environmental management system audits
  • Total environmental risk audits
  • Green audits
  • Specific topic audits

4
Audit
  • Pre-aquisition or conveyance audits
  • to determine liability of new acquisitions
  • Regulatory compliance audits
  • to determine compliance with laws and regulations

5
Audit
  • Environmental management system audits
  • to evaluate environmental performance and
    conformance with environmental management system

6
Audit
  • Total environmental risk audits
  • all the above to give an overview of historical,
    current and future environmental performance
  • Green audits
  • all the above plus such organizational aspects
    such as life cycle assessment
  • Specific topic audits

7
Audit
  • Qualities needed in an auditor
  • Independence
  • Impartiality
  • Inquisitiveness
  • Integrity

8
Audit
  • The parties involved in an audit
  • Auditee - the organization to be audited
  • Audit team - the group of auditors, or a single
    auditor designated to perform a given audit. The
    leader of the team is known as the lead auditor
  • Client - the organization commissioning the audit

9
EMS Audit
  • ISO14001 - The organisation shall establish and
    maintain (a) programme(s) and procedures for
    periodic environmental management system audits
    to be carried out.

10
EMS Audit
  • to determine whether or not the system
  • conforms to planned arrangements for
    environmental management including the
    requirements of this International Standard and
  • has been properly implemented and maintained and
  • to provide information on the results of audits
    to management

11
EMS Audit
  • The organisations audit programme, including any
    schedule, shall be based on the environmental
    importance of the activity concerned and the
    results of previous audits. In order to be
    comprehensive, the audit procedures shall cover
    the audit scope, frequency and methodologies, as
    well as the responsibilities and requirements for
    conducting audits and reporting results.

12
EMS audit process
  1. initiating the audit
  2. preparing the audit
  3. executing the audit
  4. audit reports and records

13
Initiating the audit
  • Define audit objectives
  • Appoint the lead auditor
  • Preliminary document review
  • Appointing the audit team

14
Initiating the audit
  • Define audit objectivesThe first step in the
    auditing process is to define the objectives of
    the audit.
  • According to ISO 14011 it is the responsibility
    of the client (i.e. the organization
    commissioning the audit) to set the audit
    objectives.

15
Initiating the audit
  • Appoint the lead auditorThe lead auditor will
    either be an external auditor or an employee who
    has been trained to fulfil this role (in many
    companies this is the environmental manager).

16
Initiating the audit
  • Preliminary document reviewThe lead auditor
    needs to review the companys EMS documentation -
    e.g. environmental policy statements, programmes,
    records and manuals in order to assess whether or
    not there is sufficient and appropriate
    information about the EMS to undertake the audit.

17
Initiating the audit
  • Appointing the audit teamHaving decided that the
    audit can go ahead, the lead auditor should, if
    they are needed, appoint other auditors to assist
    in carrying out the audit. Depending on your
    companys approach, the audit team will consist
    of either external auditors or staff members that
    have received the necessary auditing training.

18
Preparing the audit
  • Audit plan
  • Audit team assignments
  • Working documents

19
Preparing the audit
  • Audit planThe plan should include, if applicable
  • the audit objectives and scope
  • the audit criteria
  • identification of the organizational units to be
    audited
  • identification of those elements of the EMS that
    are of high audit priority

20
Preparing the audit
  • the audit procedures to be used
  • identification of reference documents
  • the expected time and duration for major audit
    activities
  • the dates and places where the audit is to be
    conducted
  • identification of audit team members

21
Preparing the audit
  • the schedule of meetings to be held with
    management
  • confidentiality requirements
  • content, format, structure, expected date of
    issue and distribution of the audit report
  • document retention requirements

22
Preparing the audit
  • Audit team assignmentsThe lead auditor, in
    consultation with audit team, should assign the
    various members to specific EMS elements or
    activities and instruct them on the audit
    procedures to be followed.

23
Preparing the audit
  • Working documentsThe lead auditor needs to
    coordinate the preparation of the working
    documents required to undertake the audit
  • forms for documenting supporting evidence and
    audit findings
  • procedures and checklists used for evaluating EMS
    elements
  • records of meetings

24
Executing the audit
  • Opening meeting
  • Collecting evidence
  • Auditing findings
  • Closing meeting

25
Executing the audit
  • Opening meetingThe purpose of the opening
    meeting is to
  • introduce the members of the audit team to your
    companys management
  • review the scope, objectives and audit plan and
    agree on an audit timetable
  • provide a short summary of the methods and
    procedures to be used to conduct the audit

26
Executing the audit
  • establish the official communication links
    between the audit team and your MD
  • confirm that the resources and facilities needed
    by the audit team are available
  • confirm the time and date for the closing
    meeting
  • promote the active participation of company staff
    in the audit
  • review relevant site, safety and emergency
    procedures for the audit team.

27
Executing the audit
  • Collecting evidenceSufficient audit evidence
    should be collected to be able to determine
    whether or not your EMS conforms to the EMS audit
    criteria through
  • interviews
  • examination of documents
  • observation of activities and conditions

28
Executing the audit
  • Information gathered through interviews should be
    verified by acquiring supporting information from
    independent sources, such as observations,
    records and results of existing measurements.
  • Non verifiable information should be identified
    as such.
  • Indications of non-conformity with any EMS audit
    criteria should be recorded.

29
Executing the audit
  • Auditing findingsHaving collected the audit
    evidence, the audit team needs to review it in
    order to determine instances where the EMS does
    not conform to the audit criteria.
  • Non-conformities should be documented in a clear,
    concise manner and supported by audit evidence.

30
Executing the audit
  • The audit findings should be reviewed with the
    person responsible for the EMS with a view to
    obtaining acknowledgement from him/her of the
    factual basis of all findings of non-conformity.

31
Executing the audit
  • Findings of conformity can also be documented, if
    within the agreed scope of the audit. However
    care needs to be taken that no absolute assurance
    of conformity is given or implied.

32
Executing the audit
  • Closing meetingPrior to preparing the audit
    report, the audit team should hold a meeting with
    those responsible for the functions audited.

33
Executing the audit
  • The main purpose of this meeting is for the team
    to present the audit findings with a view to
    ensuring that they are fully understood and to
    obtaining an acknowledgement of the factual basis
    of the findings.

34
Executing the audit
  • The closing meeting is an opportunity to resolve
    any disagreements between the auditing team and
    the MD. The final decision on the significance
    and description of the findings rests with the
    lead auditor.

35
Audit reports and records
  • Audit report preparation
  • Report distribution
  • Audit completion

36
Audit reports and records
  • Audit report preparationThe audit report is
    prepared under the direction of the lead author,
    who is responsible for its accuracy and
    completeness.
  • The topics to be addressed in the report should
    be those determined in the audit plan.

37
Audit reports and records
  • Any changes to these topics which are desired at
    the time of preparation of the report should be
    agreed by the all the parties concerned.
  • The audit report should contain the audit
    findings (or a summary of these findings) with
    reference to supporting evidence.

38
Audit reports and records
  • Subject to agreement between the lead auditor and
    your MD, the audit report may also include the
    following
  • the identification of the organization audited
    and of the client
  • the agreed objectives, scope and plan of the
    audit

39
Audit reports and records
  • the agreed audit criteria including a list of
    reference documents against which the audit was
    conducted
  • the period covered by the audit and the date(s)
    the audit was conducted
  • the identification of the audit team members

40
Audit reports and records
  • a statement of the confidential nature of the
    report contents
  • the distribution list for the audit report
  • a summary of the audit process including any
    obstacles encountered

41
Audit reports and records
  • audit conclusion i.e. EMS fully conforms/does not
    fully conform with audit criteria and has/has not
    been properly implemented and maintained.
  • The audit report should be dated and signed by
    the lead auditor.

42
Audit reports and records
  • Report distributionThe audit report should be
    sent to the MD by the lead author. Distribution
    of the audit report should be determined by the
    the MD in accordance with the audit plan.
  • Audit reports are the sole property of the
    company and confidentiality should be respected
    and appropriately safeguarded by the auditors and
    all recipients of the report.

43
Audit reports and records
  • The audit report should be issued within the
    agreed time period in accordance with the audit
    plan. If this is not possible, the reasons for
    the delay should be formally communicated to the
    MD and a revised issue date established.
  • All working documents, and draft and final
    reports pertaining to the audit should be
    retained by agreement between the the MD, the
    lead auditor and in accordance with any
    applicable requirements.

44
Audit completion
  • The audit is completed once all activities
    defined in the audit plan have been concluded.

45
EMS Audit Components
  1. Objectives and scope
  2. Objectivity, independence and scope
  3. Due profession care
  4. Systematic procedures
  5. Audit criteria, evidence and findings
  6. Reliability of audit findings and conclusions
  7. Audit report

46
Objectives and scope
  • An audit should be based on objectives defined by
    the client. The scope of the audit (i.e. its
    extent and boundaries) is determined by the lead
    auditor and must be adequate to meet the audit
    objectives. The objectives and scope of the audit
    should be communicated to the auditee prior to
    the audit.

47
Objectivity, independence and scope
  • An environmental audit should be as objective as
    is possible. In order to ensure this, the members
    of the audit team should be independent of the
    activities they are to audit. If an internal
    audit is being performed (i.e. the audit team
    consists of employees of the company being
    audited) then none of the audit team members
    should be accountable to those directly
    responsible for the subject matter being audited.

48
Objectivity, independence and scope
  • The audit team members should, of course, have
    the knowledge, skills and experience necessary to
    carry out the audit. Guidance on these matters is
    provided in ISO 14012, the international standard
    on qualification criteria for environmental
    auditors.

49
Due profession care
  • When conducting an audit, auditors should
    exercise the care, diligence, skill and judgement
    expected of any auditor in similar circumstances.

50
Due profession care
  • The audit team/client relationship should be one
    of confidentiality and discretion. Unless
    required to do so by law, the audit team should
    not disclose information/documents obtained
    during the audit or the final audit report to any
    third party without the approval of the client.
  • The audit team should follow procedures that
    provide for quality assurance.

51
Systematic procedures
  • To enhance consistency and reliability, an
    environmental audit should be conducted according
    to documented and well-defined methodologies and
    systematic procedures. It should be carried out
    it accordance with any guidelines developed for
    that particular type of environmental audit. (For
    example ISO have published guidelines for
    conducting environmental management system audits
    - ISO 14011.)

52
Audit criteria, evidence and findings
  • Audit criteria should be determined at an early
    stage of the audit process. They should be agreed
    between the lead auditor and the client and
    communicated to the auditee. Audit evidence
    should then be collected and evaluated in order
    to determine whether the audit criteria have been
    met.

53
Reliability of audit findings and conclusions
  • The audit evidence collected during an
    environmental audit will inevitably only be a
    sample of the information available, as audits
    are conducted over a limited period of time and
    with limited resources.

54
Reliability of audit findings and conclusions
  • There will therefore be an element of uncertainty
    inherent in all audits and the users of the
    results of environmental audits should be aware
    of this uncertainty. The auditing process should
    be designed to provide the client with the
    desired level of confidence in the reliability of
    the audit findings.

55
Audit report
  • The client should be provided with a written
    report of the audit findings (and/or a summary
    thereof). Unless the client states otherwise, the
    auditee should also receive a copy of the report.

56
Audit report information
  • the identification of the organization audited
    and of the client
  • the agreed objectives and scope of the audit
  • the agreed criteria against which the audit was
    conducted
  • the period covered by the audit and the date(s)
    the audit was conducted

57
Audit report information
  • the identification of the audit-team
  • the identification of the auditees
    representatives participating in the audit
  • a statement of the confidentiality
  • the distribution list
  • a summary of the audit process including any
    obstacles encountered
  • the audit conclusions

58
Audit report information
  • The lead auditor, in consultation with the
    client, should determine which of these items,
    together with any additional items, should be
    included in the report. Normally it is the
    responsibility of the auditee to determine any
    corrective action need in the light of the audit
    findings. However the auditor may provide
    recommendations when there has been prior
    agreement to do so with the client.
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