Your Internal Audit Team: Internal or Hired External? Outsourcing Internal Audits

Not having had the time (sorry) to read this post thru. I would love to have a team of 'external' internal auditors to come in and audit my systems and processes. It would alleviate the issue of having to recruit from the shop floor or have full time internal adutiors that eventually (IMO) stagnate. I have thought in the past of setting up a group of auidtors locally and hriing us out. I have had some positive feedback from companies that would like the 'third person' approoach. Have you ever had someone come in a give an idea or suggestion to management and they have acted on it....when you know that you have given them the same idea/suggestion and they have done nothing about it???? Often outsiders are listened to more than the internal workforce..go figure.

Greg B said:

Not having had the time (sorry) to read this post thru. I would love to have a team of 'external' internal auditors to come in and audit my systems and processes. ...

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I think a team of 'external' internal auditors can be compliant, but is a two edged sword. On the one hand, perhaps they would be more effective at first, if they have more professional skills. This would be very beneficial. However, over time it may become limiting. An internal audit is intended to be a micro level review of the "forest," going tree by tree, over time.

The external third party audit, tends to be a higher level view of the forest. Taken together, this is a great 3 dimensional review of the forest and the trees.

The risk is with external auditors over time, that you end of with two macro reviews, but no micro level. However, I have seen it work, particularly when resources are tight.

It would alleviate the issue of having to recruit from the shop floor or have full time internal adutiors that eventually (IMO) stagnate.

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My main concern is that internal auditors should WANT to do this extra work, be given GOOD training to really understand what the objectives are, and given the resources and time to do it well. When I have seen these three factors come together (as the standards expect), it works very well and does not become stagnant.

We don't pay you enough to listen to you.

Greg B said:

Have you ever had someone come in a give an idea or suggestion to management and they have acted on it....when you know that you have given them the same idea/suggestion and they have done nothing about it???? Often outsiders are listened to more than the internal workforce..go figure.

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That's why I ended up being a consultant.

We had a "famous" group of consultants who came in, interviewed the key staff, and then wrote it up as their recommendations!

The comments about the "micro" level were interesting. As an external consultant doing internal audits I prefer to do them with my client's staff who will usually pick up on the technical issues before I do.

There is a difference between internal and external auditing and auditors

Better late than never

Sorry I missed this first time.

hjilling said:

An internal audit is intended to be a micro level review of the "forest," going tree by tree, over time.

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That is the first time I have heard it described like that. Any audit is an attempt to discover what is going on. With internal audits you tend to get more of them and therefore there is an opportunity to take a bigger sample of the organization's activities. That is the only difference I can see.

hjilling said:

The external third party audit, tends to be a higher level view of the forest. Taken together, this is a great 3 dimensional review of the forest and the trees.

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Either the internal audit isn't doing it right or the external audit isn't. The audit programmes should cover the same scope and go to the same depth. The sample size (as earlier) may be different.

hjilling said:

The risk is with external auditors over time, that you end of with two macro reviews, but no micro level. However, I have seen it work, particularly when resources are tight.

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See points above. What I find with "external" internal auditors is that you get audits that mirror the style of the third party audits - whether that is good or bad I have no comment.

hjilling said:

My main concern is that internal auditors should WANT to do this extra work, be given GOOD training to really understand what the objectives are, and given the resources and time to do it well. When I have seen these three factors come together (as the standards expect), it works very well and does not become stagnant.

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Having been asked to come in and do internal audits as an external consultant the main reason I am called in is because people either don't enjoy audits / can't fit them in or their bosses don't like them taking time out of the "proper" job. There are rare exceptions where people enjoy it and are given the time but it is a minority.

All part of a general malaise and dumbing down of ISO and quality in general - still I can get off my soap box now.

MikeL said:

We had a "famous" group of consultants who came in, interviewed the key staff, and then wrote it up as their recommendations!

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This is the old "A consultant is a person who borrows your watch, tells you what time it is, pockets the watch, and sends you a bill for it." - to be fair the only reason this works is they pick up on things that the workforce knows and may even be trying to tell the management team but (to mix my metaphors) they are more prepared to listen to (highly paid) consultants rather then the "prophet in their own land."

Actually, comparing your comments to mine, I think we are actually saying similar things, just in different terms. The sample size certainly tends to be different. But, most external auditors also don't see the nuances and shades as clearly as a good internal guy. But often, the internal auditor doesn't see the big picture as well, unless he tends to be fairly high up in management. I think that is what I mean by my use of micro/macro...

Paul Simpson said:

...This is the old "A consultant is a person who borrows your watch... ...they are more prepared to listen to (highly paid) consultants rather then the "prophet in their own land."

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As long as they listen and do, the organization has benefitted. That's a good thing, no?

...got a watch...?

Re: Your Audit Team: internal or hire external? Outsourcing Internal Audits?

Some of my internal auditors were "gung-ho" to be internal auditors in the beginning and now they really do not want to participate anymore.

Re: Your Audit Team: internal or hire external? Outsourcing Internal Audits?

Crusader said:

Some of my internal auditors were "gung-ho" to be internal auditors in the beginning and now they really do not want to participate anymore.

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That is a commn problem. Some of it is normal attrition, and sometimes they get burned out because they don't feel they are accomplishing what they hoped they would. That is where really good training, and a well organized audit program can often help a lot.

Re: Your Audit Team: internal or hire external? Outsourcing Internal Audits?

Another factor is initially it sounds like it will be fun - A change of pace. The reality is their every day responsibilities do not go away so they end up having added a responsibility (read More Time) to their agenda.

Re: Your Audit Team: internal or hire external? Outsourcing Internal Audits?

hjilling said:

That is a common problem.

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Indeed it is. Last June, I gave a presentation to the Orange County ASQ Chapter about the top 10 reasons why internal audits are ineffective. The material I used for my presentation is available as an attachment in this post: (broken link removed). It might be of interest to some people following this discussion.

Re: Your Internal Audit Team: Internal or Hire External? Outsourcing Internal Audits?

Crusader,

Cool poll! It would interesting to know how and why they voted a certain way (resources, time, etc.). I voted for "Outsource and love it" mainly because I am the only quality manager here and we have a very small company. We can't afford to take any one person off the machines or their daily work without some hardship.

Where I used to work, I managed a 11-member team, which I really enjoyed. They got a lot out of it and so did the auditees. I do miss that energy and teamwork.



Thanks for the poll!