1Safety management and audit Table of Contents Answer to question 1:......................................................................................................................2 Answer to question 2:......................................................................................................................5 Answer to question 3:......................................................................................................................8 Answer to question 4:....................................................................................................................12 Answer to question 5:....................................................................................................................16
2Safety management and audit Answer to question 1: 1.Basic difference between the internal audit and external audit are following: Basic definition: internal audit can be considered as a set to calculate and analyze firm’s control that includes the corporate governance and accounting process. The auditors ensures that they are following all the guidelines, laws and regulations so that they can post the financial statements on-time. Whereas, the external audit is done for the purpose of recognizing that the company is provided complete, real and true representation of their financial position maintaining their bank balance, bookkeeping records and financial transactions or not (Inspired Pharma Training., 2020). Objectives: the objectives of internal auditors is to routine review the process and activities in the company which provides a scope of improvement and maintain the financial statements as well (Auditnet.org., 2020). Whereas, the main objective of the external audit is to analyze prepared financial statements of company and verify whether it shows true figure or not. Who conductsthe audit program: internal audit is conducted by selectedinternal employees of the organization known as internal audit department and the external audit is conducted by any third party for that company. Reporting responsibilities: the reporting responsibility of internal audit can be directly to the company’s board of directors of that company because they are independent and they are not answerable for it to the management. Whereas, the external audit has to inform the shareholders in the Private sector companies and in Public sector companies they havetoinformthelegislativebodylikeParliament.However,theyarealsonot answerable to the management (Pcaobus.org., 2020).
3Safety management and audit Users: management of the company is the user of internal audit and the users of external audit are mainly the members, shareholders, the public at large and etc. 2.While preparing the list for audit team, the audit leader have to keep in mind about the knowledge each team member possess. There has to be one director of that team and that person can be the audit team leader (RCV Academy., 2020). Three auditors has to be chosen form the company who are seniors in that team. However, they have to be from different fields. So one member each from Chemical manufacturing department, research department and quality assurance department. It is important that every member must have some knowledge regarding the audit or auditing process. One of those members must be capable of understanding the language of that country so one of the member must be selected who is the native resident of that country (Aabri.com., 2020). Two experienced auditors should also be present into the team and hence both the members will be selected form the finance and accounting team who have great knowledge of how to prepare the financial statements on-time and they will help the other members as well to understand the auditing process. It is also important to include at least one scientist and one engineer into the audit team of Cromwell Pte Ltd because the firm is manufacturing equipment for military department which has to be perfect. These members will help the other
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4Safety management and audit members to take decision on the basis of exact requirement regarding the military needs and prospects. Apart from them, one OECI A&D Coordinator is also supposed to be present during the review visit so that they can coordinate the peer review activities. So, the audit team will consist one senior from each department who will have minimum knowledge of auditing process and the team leader of the internal audit would be the coordinator of Health, Safety and Environment because he was told to conduct an audit and form an audit team. Without the presence of the audit leader the audit will not be conducted timely and the financial statement may consist of some fraud figures (Mihret, 2014).
5Safety management and audit Answer to question 2: a) Step wise audit program planning Step 1:identifying the need of audit the auditor need to identify the departments and the areas where auditing needs to be done. Here the auditor will investigate all the department and look outforanyloopholeorfraudinthefigureoffinancialstatementofthatdepartment (Ehs.missouri.edu., 2020) Step 2:preparing an audit calendar for how often the audit must be prepared. This will be prepared as per the need of auditing. If the auditor fees that there is a huge difference between the actual figure and recorded figure then frequent auditing or quarterly auditing will be suggested otherwise it can be annually or half yearly. Step 3:according to the audit calendar prepared by the auditor, the departments will be informed to maintain their figures (Zhang, Yang & Appelbaum, 2015). The auditor will develop a calendar identify the need calender inform departments proposal for audit form a team start auditing submit report
6Safety management and audit which will include the dates on which auditing will be done and the departments will be informed accordingly so that they can rectify their mistakes before the audit team catches and penalizes them. Step 4:propose for audit conduction proposal has to be given to the board of directors of that company. The auditor will propose for conduction of audit because after investigating the departments he realized that it is necessary to conduct an audit so that the irregularities can be minimized (Oyedepo & Oladele, 2013). Step 5:Form an audit team according to the requirement which will consist of the internal employees explained above. He will develop an audit team which will consist the members from the internal company employees who have a simple knowledge regarding the auditing process. Step 6:auditing process will start and all the financial figures will be analyzed accordingly. Then the main investigation and analysis part will start where the auditors will extract the financial figures and match with the actual figures. Step 7:when the analysis is done then the audit report should be submitted to board of directors. After the conduction of the audit program the report should be submitted to board of directors. b) Audit schedule:Conducting an audit program within two days will be quite hectic for the auditor. However, if every work is done with equal speed then it is possible (Powellet al.,2013). Following are the steps that the auditor can follow to schedule the audit plan and they are: 1.This step will start after the investigating process. On the 1stday he will plan for the internal audit by selecting two members of accounting team whom he have selected for
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7Safety management and audit the audit team. He will investigate regarding the organization risk and their goals in market. 2.Then he will select the department heads of three departments stated above to understand and estimate the risk and process of each department. The department can only specify the external as well as internal risks of the department. 3.The auditor must have knowledge regarding the integrated framework. However, he should revise and convey the whole framework to the whole auditing team he have selected for the audit program. 4.On the same day the initial documents will be collected at emergency basis on the same day so that work can be completed on the next day (Al-Khaddash, Al Nawas & Ramadan, 2013). 5.On the next day the work should be completed and each member should meet the deadline. Along with this a meeting should be conducted with the stakeholders of the business. 6.In the meeting the program and the plan will be reviewed by the stakeholders and the actual result will be revealed. Accordingly future plans will be suggested by the audit leaders and stakeholders for betterment of the firm (Costelloeet al.,2015).
8Safety management and audit Answer to question 3: AUDIT CHECKLIST FOR CROMWELL’S SAFETY MANAGEMENT SYSTEM QUESTION NO. INSTRUCTION/QUSETIONSYes/No/NA 1.General controls Does every department and facility in the organizational unit operate in the stage of controls? 2.Organizational & management responsibilities Do the facility and business unit operates under facility or corporate quality policy? Sec 211.22(a) Do the quality assurance of unit is separate from organizational entity? Sec 211.22 Do QA department engage themselves in routinely reviewoftheirproductionrecordsforbeingsureofthe procedures which is being followed with proper document? Sec 211.22(c) Are all quality assurance procedures written or recorded properly? 3.Employee Orientation, their job training and quality awareness Sec211.25(a)Doeseachandeveryemployeeofthe organization receive considerable retaining on SOP if there is any critic change in procedure? Doeson-goingorperiodictrainingintheorganizationis
9Safety management and audit indicated properly? Sec 211.25 (a) Are all temporary employees provided with similar orientation and training like the permanent employees? Sec 211.34 Are all consultants hired for the purpose of advising the employees on manufacturing process, packaging or holding and approval of releasing the drugs is asked to show verification of their training, experience and educational degree? 4.Plant security and safety Does the safety training procedure involves the details of the employees like their name, the type of training they will be provided,theirdateofprovidingtrainingalongwiththeir assigned trainer and also the participants. Doesallthisfacilityinvolvecorporatesafetyand security program in it? Does the security person of the organization available in the place on a 24 hours basis? Does the facility involve a written formal security policy? Describe how all the entry is being restricted and monitored? 5.Internal quality/Cromwell’s Audit program Doesallthebusinessfacilityandunithaswrittenpolicy regarding the quality of the accounting? Does the copy of all the facility documents provided to the employees?
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10Safety management and audit If “yes” to the above questions then when is it provided? _________________________________ Does a formal written SOP include the details of who will conduct the audits along with their qualifications like their education degree, experience and training to provide to the officials who conducts the audit program? Do the officially written SOP describe the frequency and the scope of audits and how it shall be written in a document? 6.Program for quality cost Does the facility has a formal and periodic review for the quality cost? Does the facility has the through personnel, accounting records, software, ability, capture quality and identifying cost? Does the specified facility is capable of making a conscious effort for reducing the cost of the quality in the organization production? 7.Design control Is this not related directly to 21 CFR Parts 210 and 211? 8.Facility control Sec 211.42 (a) Do all parts of facility is prepared in such a way that the product becomes perfect for manufacturing, holding and testing of the drug products? Sec 211.42 (b) is there enough space in the facility for typical
11Safety management and audit volume of production and type of work? Do the organization and layout of the facility prevent the drugs from any contamination? ThefacilityNOTsituatedinthelocationwhichperfectly reflects workers or the product that particulate infestation and matter of the drug?
12Safety management and audit Answer to question 4: Checklist items for internal audit physical inspectionYesNoNA A. General – All areas 1. Are all of the ceiling tiles in proper place and in better condition? 2. Are the machine and belt guards in proper place and in better condition? 3. Are all the equipment properly adjusted and maintained to prevent equipment damage and personal injury? 4. Do all the areas which requires use of protective equipment are adequately displayed with warning signs and enforced? 5.Isdamaged/malfunctioningequipmenttagged“OUTOF SERVICE”? 6. Does the consumption of beverages, food and etc., prohibited where required? B. Storage 1. Are all chemicals stored in air-tight containers? 2. Are all dangerous chemicals properly leveled? 3. Are protective valve caps in proper area when chemical is not used? 4. Does the company uses correct regulator for their chemical service? 5. Is empty and full chemical containers stored separately?
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13Safety management and audit C. Equipment for Personal protection 1. Are the equipment for personal protection enforced? 2. Do all personal protective equipment are free from any damage and deterioration? 3. Do all employees uses the respiratory protection properly as trained and authorized? 4.Doself-containedbreathingequipmentproperlybeing maintained/ inspected? When a physical inspection took place in the last month by an auditor then the following points were noted and revealed the situation of the firm (Ngoepe & Ngulube, 2016). Checklist items for internal audit physical inspectionYesNoNA A. General – All areas 1.Doalltheceilingtilesinproperplaceandinbetter condition? 2. Are the machine and the belt guards in place and in better condition? 3.Doestheequipmentproperlyadjustedandmaintainedto prevent equipment damage and personal injury? 4. Are all the areas which requires usage of protective equipment adequately displayed with warning signs and enforced? 5. Does damaged and malfunctioned equipment tagged “OUT OF SERVICE”?
14Safety management and audit 6.Isconsumptionoffood,beverage,etc.,prohibitedwhere required? B. Storage 1. Are all chemicals stored in air-tight containers? 2. Are all dangerous chemicals properly leveled? C. Equipment for Personal protection 1. Are the equipment for personal protection enforced? 2. Do all the personal protective equipment free from any damage and deterioration? Comments over the above inspection table: When the auditor physically inspected and marked the checklist it was noted that the checklist reflects true and similar condition of the firm in last month also. The current auditor need to keep all the above points in mind and highlight the situation in the board meeting while he will present the audit report in front of the board of directors and the stakeholders (Lachwani, Srinivasan & Patnaik, 2015). All the points shows the actual reason as why the production is lacking quality and quantity and these points need to be considered in the audit program. All the points reveal that the workers are ignoring a lot of duties and responsibilities like using the machine properly and shutting them down at the lunch time. They use to store some food and beverages in the rest room which is prohibited. The lighting condition is also poor in the staircase area where the workers use to smoke and waste their working
15Safety management and audit time. They are also not using their ear-guards properly instead they are using them to clean their dresses form any dust (The Thriving Small Business., 2020). The harmful chemicals are also not properly stored in the storage room. The lids are not closed and the ceiling of that area is also ripping off due to the heavy chemical reaction. Proper maintenance is done for the storage room and the employees are also not properly supervised. Due to lack of supervision they have started to use the manufacturing area and the machines as per their convenience. This has also affected the production of that company (ISPE | International Society for Pharmaceutical Engineering., 2020).
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16Safety management and audit Answer to question 5: After the completion of the audit report, the auditor will conduct one closing meeting to Cromwell’s management to submit the report and prepare policies and agendas accordingly. The minutes of closing meeting would involve the following points: Thank the auditees for their time. Here all the audit members who were involved into the audit program will be given a thank you note so that their work is recognized in front of the management. Thank them for allowing the audit leader to audit them. The auditor will thank the organization who have appointed and allowed them to audit them by providing the accurate figures and true picture of the manufacturing process (Knechel & Salterio, 2016). Remind the auditees of the reason for the audit. The exact reason for the auditing program shall be accurately described like the difference that was shown in the accounts of Cromwell and their manufacturing department’s condition. Remind the auditees of the standard that was audited against. The auditees must be clarified regarding the accounts which were audited along with the reason for auditing. Remind everyone that the audit is confidential. The members who will be present in the meeting, they should be clearly informed that the auditing process and result should be confidential (Martikainen, 2016).
17Safety management and audit Stating that the auditor have only looked at the sample of system. It should be also clarified that the auditor have maintained the general guidelines and rules of the auditing process (Ngoepe & Ngulube, 2014). Stating if the audit is invalid. It is also important for the auditor to clarify that if the auditor has ignored or forgot to see some specific activities then the audit must be invalid. Explaining how to present the findings. The auditor have to present or declare how they have extracted, analyzed and put all the information in a systematic way. Confirming any non-conformities and observations raised. All the observation related to the condition of the manufacturing department has to be specified in the meeting so that the audit report will be justified (Allford, 2016). Providing a closing summary on how the audit has gone. As the auditor was provided with only 2 days for auditing, it is necessary to clearly state the experienceandtheprocesswhichwasimplementedtocompletetheauditprogram (Cleanenergyregulator.gov.au., 2020). Stating the final conclusion of the audit regarding satisfactory or unsatisfactory and etc. Afterthe audit report isdisplayed, the auditor must provide a commentregarding how satisfactory was the process. Here the auditor can state that the manufacturing department was
18Safety management and audit under the level of satisfaction and the workers are also not paying attention to the condition of the machines (Oeci.eu., 2020). Telling the auditees when they will receive the audit report. The auditees must be informed regarding when they can access the original audit report in detail. Telling the auditees what is expected form them that they will do once they receive the report. The audit leader will state that the agendas and the policies which should be implemented when the original audit report will get submitted to them for betterment of theirorganization (Wallstreet Mojo., 2020). Allowing questions from other side. The meeting should allow questions and solutions from both the sides and hence the managers and other members in the meeting shall be allowed to ask any questions regarding the process of the audit program and the conclusion part. Any suggestions can also be taken from the auditor for the purpose of making policies and agendas regarding the betterment of the organization. The auditor should also ensure that the organization agrees to the suggestion and implements it afterwards.Thereshouldnotbeanyclashbetweenthemanagersandtheauditleader (PandaDoc., 2020).
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19Safety management and audit References: Aabri.com. (2020).Aabri.com. Al-Khaddash, H., Al Nawas, R., & Ramadan, A. (2013). Factors affecting the quality of auditing: The case of Jordanian commercial banks.International Journal of Business and Social Science,4(11). Allford, L. (2016). The auditing of process safety.Journal of Loss Prevention in the Process Industries,43, 747-752. Auditnet.org. (2020). The Internal Audit Process from A to Z: How It Works! - AuditNet. Auditnet.org. Cleanenergyregulator.gov.au.(2020).Selectionofauditteammembers. Cleanenergyregulator.gov.au. Costelloe, E. M., Guinane, M., Nugent, F., Halley, O., & Parsons, C. (2015). An audit of drug shortages in a community pharmacy practice.Irish Journal of Medical Science (1971-),184(2), 435-440. Ehs.missouri.edu. (2020).Ehs.missouri.edu. Inspired Pharma Training. (2020). Auditing closing meeting template | Inspired Pharma Training.Inspired Pharma Training. ISPE | International Society for Pharmaceutical Engineering. (2020). GMP Audit Checklist For Drug Manufacturers.ISPE | International Society for Pharmaceutical Engineering. Knechel, W. R., & Salterio, S. E. (2016).Auditing: Assurance and risk. Routledge.
20Safety management and audit Lachwani, M., Srinivasan, J., & Patnaik, P. (2015).U.S. Patent No. 9,015,832. Washington, DC: U.S. Patent and Trademark Office. Martikainen, S. (2016). Development and Effect Analysis of the Asteri Consultative Auditing Process-Safety and Security Management in Educational Institutions. Mihret, D. G. (2014). How can we explain internal auditing? The inadequacy of agency theory and a labor process alternative.Critical Perspectives on Accounting,25(8), 771- 782. Ngoepe, M., & Ngulube, P. (2014). The need for records management in th auditing process in the public sector in South Africa. Ngoepe, M., & Ngulube, P. (2016). A framework to embed records management into the auditing process in the public sector in South Africa.Information Development,32(4), 890-903. Oeci.eu. (2020). Composition of an audit team.Oeci.eu. Oyedepo, S. O., & Oladele, A. T. (2013). Energy audit of manufacturing and processing industries in Nigeria: A case study of food processing industry and distillation & bottling company.American Journal of Energy Research,1(3), 36-44. PandaDoc. (2020). Audit Proposal Template - Get Free Sample.PandaDoc. Pcaobus.org. (2020). AS 2101: Audit Planning.Pcaobus.org. Powell, D. A., Erdozain, S., Dodd, C., Costa, R., Morley, K., & Chapman, B. J. (2013). Audits and inspections are never enough: A critique to enhance food safety.Food Control,30(2), 686-691.
21Safety management and audit RCV Academy. (2020). What is Auditing - Auditing Definition, Introduction and Meaning. RCV Academy. The Thriving Small Business. (2020). 8 Steps To Performing An Internal Audit – The Thriving Small Business.The Thriving Small Business. Wallstreet Mojo. (2020). Internal Audit vs External Audit | Top 6 Differences (with Infographics).Wallstreet Mojo. Zhang, J., Yang, X., & Appelbaum, D. (2015). Toward effective Big Data analysis in continuous auditing.Accounting Horizons,29(2), 469-476.