Many organizations like to measure their compliance level against certain standards even without any legal obligation. This process is known as pre-assessment audit, which is used by many organizations as a tool for evaluation and learning to help in the improvement of the management systems. Through this process, the management will identify all the areas that need improvement. Organizations are also required to carry out pre-assessment audit before they can receive the credential of certification.
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Pre-assessment audit is part of internal audit where organizations are required to evaluate their management systems as a way of ensuring that there is good corporate governance. This paper will analyze procedures for pre-assessment audit and internal audit using the case of National Bank of Abu Dhabi (NBAD). The bank is ranked the best financial institution in the Middle East and it was awarded standards for quality management ISO 9001-2008.
Procedures for pre-assessment audit
Pre-assessment audit involves a number of steps which organization ought to follow for a successful process and certification by the registrar. These steps include
Commitment of the top management
The success of the entire process starts with the commitment of the top managers who play the critical role in the audit. Top managers need to be convinced that pre-assessment audit is necessary and successful certification and registration will benefit the organization by showing its commitment to quality for its customers. The management needs to be in the forefront for successful pre-assessment audit; nevertheless, this will only happen if the managers realize that good management systems will improve the efficiency of the business by minimizing duplication of the management systems that are wasteful. In the case of NBAD, the top management of the bank is committed to improve the quality of its services and systems to meet the needs of its customers. This commitment drove the managers in 2008 to carry a successful pre-assessment test required before ISO certification.
Establishing a team for implementation
Pre-assessment audit needs a committed team of staff for its successful implementation. After having a committed top management team, the plan must be made known to all the employees of the organization for them to own and support it. The quality assurance department ought to select a capable team that will spearhead the implementation process. As Asare, Davidson, and Gramling argue, an audit committee may be established to help in this process of auditing (181).
The team may consist one of the member from the top management who will oversee and plan the implementation process together with the other people who are appointed from all the departments of the organization. These departments may include planning, marketing, quality control, and production among others. The representative of the management will motivate and direct all the other managers towards the implementation of the pre-assessment audit. In the NBAD, the quality assurance department, led by its manager, spearheaded the 2008 pre-assessment audit.
Start awareness program
The purpose of the awareness program is to inform all the stakeholders of the intended audit to incorporate them in the process. Awareness program may involve sensitizing the customers and employees on the benefits of the process. NBAD carried out several awareness programs to sensitize its employees and customers on the benefits they will gain from improved quality systems of the bank before its certification in 2008.
Internal quality audit will affect all the personnel and departments in the organization. It is therefore important to come up with training programs to prepare all the staffs for any change that may come with quality assurance certification. Many procedures and systems of the organization are affected hence the need to train staff for these changes.
Conduct a survey for initial status
This will involve carrying out a simple survey in the whole organization just to give an idea of what is expected during the audit process. It may require visiting several units or departments, a process that NBAD accomplished.
Steps for internal auditing
Internal quality auditing involves a number of steps, which are necessary for a successful process. The steps include scheduling, planning, conducting, recording, and reporting.
Scheduling involves the process of coming with an annual schedule that will be used for quality audit. Quality assurance department has a duty to come up with the said schedule that will run for a whole year. This schedule ensures that there is proper timing of the activities involved in the process. After preparing the schedule, it is forwarded to the management team for any amendment and approval. As Dacey indicates, an audit manual provided by the Government System Control Department may be used when planning for the audit (1).
Planning process involves preparation of the documents necessary for the audit taking into consideration the specific procedures that will be used in each unit or division. Quality assurance team also informs all the department of the audit schedule to enable them to prepare in advance.
The audit is carried out using a checklist where auditors compare what is in the list with what is already happening in the organization. At this step, the auditor will note the findings on the checklist, which will then be used to assess the position of the organization.
In this step, the findings of the audit are recorded in preparation for reporting and implementation. The recording shows what has been observed during the auditing process and what is expected to be happening. It shows where there is variation with laid down requirements. If necessary, a follow up audit may be planned at this stage before giving the final report.
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At this step, the findings of the internal quality audit are reported to the top management for action. The findings will show the present position of the organization in relation to the laid down requirements and the expected position in accordance with these rules. Many governments have laid down all the audit requirements that should be followed by all organization (Franzel 1). From this report, the management may now come up with an action plan to implement the recommendations if they are not satisfied with current position of the organization.
Pre-assessment audit and internal audit are important processes for assessing quality compliance of any organization. All the organizations are required to undertake audit process before quality certification by the registrar. NBAD carried a successful audit before its certification in 2008 as a way of improving quality of its services and systems. Pre-assessment audit will involve initial preparations before the actual quality audit is conducted. Actual audit may involve scheduling, planning, conducting, recording, and reporting.
Asare, Stephen, Davidson, Ronald, and Gramling, Audrey. “Internal Auditors’ Evaluation of Fraud Factors in Planning an Audit: The Importance of Audit Committee Quality and Management Incentives.” International Journal of Auditing 12.3 (2008): 181-203.
Dacey, Robert. “Federal Information System Controls Audit Manual (FISCAM): Exposure Draft.” GAO Reports, 2008: 1-611.
Franzel, Jeanette. “To audit officials and others interested in: government auditing standards.” GAO Reports, 2010: 1-192.