Contribution of Internal Auditing to TQM
Gupta and Ray (1995), in their research into total quality and internal auditing, also saw internal auditors as “quality champions”:
“Internal auditors, by virtue of their role, are in a unique position to lead and proactively support the quality movement in their organizations. The internal auditing function does not need to be a bystander and wait to get on the quality bandwagon only when someone else in the organization sounds the quality horn. If the internal auditing function so desires there is ample opportunity to lead and support the total quality movement in an organization.”
Such a championing role should never be far from any internal audit engagement—be it assurance, consulting, or teaching.
Whatever the role internal auditing follows to implement TQM principles in its own function, it is clear that the challenge of quality cannot be left out of audit planning and risk assessment in those systems and functions which it reviews in others. All internal audit engagements should:
-
provide advice on all quality programs in their organization;
-
link all quality policy requirements to risk management;
-
benchmark TQM principles to all governance practices.
Making It Happen
-
Starting a TQM program requires an inspiring vision that will motivate everyone to a commitment to “total quality” in all processes and services which they provide.
-
Define and agree what you mean by “quality” in relation to yourselves, your customers, and all your stakeholders.
-
Publish a quality policy that requires continuous assurance of its implementation and effectiveness.
-
Establish quality systems for all your processes.
-
Respond immediately to customer and stakeholder complaints.
-
Agree your key quality performance indicators and measure against these on a regular basis; publish the results to all your staff, customers, and stakeholders.
-
Implement internal quality auditing and independent external quality assessment.
-
Reward success in implementing or raising quality.
-
Correct all failures so that they do not happen again.
-
Aim to be right first time.
-
Continuously improve—quality is a journey, not a destination.
Case Study
Internal Auditing in 1975, Today and Tomorrow1
In 1975, at my inaugural address as president of the then United Kingdom Chapter of the Institute of Internal Auditors, Inc., I said the following:
“We live in times of high economic risk and important social and business decisions. Every day we are reminded at work, in newspapers and by television of the opportunities that can be taken to develop ourselves and the profession we have chosen. The apparent insoluble problems of the present economic situation; the controversial discussions caused by exposure drafts and new accounting practices; involvement in the European Community; a new awareness of social responsibilities; higher health and safety standards; the now clearly recognised need for more efficient manpower planning and training; the urgency of energy saving; the complexity of advanced computer technology are all changes that management cannot ignore, and neither can we as internal auditors. To be successful we must be sensitive to the problems of each day. All can have an impact on our professional activities far beyond the changes we may foresee at the present time.”
I have repeated this many times since as a commentary on the environment in which internal auditing operates across all sectors, both nationally and internationally. It is still a challenging statement, requiring a high level of quality in all internal auditing activities. Consider the quality needs of your customers for each of these challenges and how they are being managed. Measure the quality of your own internal auditing and how it meets these challenges. That is what TQM is all about.
- Page 5 of 6
- Previous section TQM in Internal Auditing
- Next section Notes
www.qfinance.com