To understand the importance of auditing, methodology of auditing, audit process, documentation and its report

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Quality audit is tool to review quality
system
Quality is total set of characterize the
product or service and its ability to satisfy
customer’s need
Audit – Latin meaning “the act of
hearing”
Dictionary meaning “formal or official
examination or verification”
Inspection – Latin mean “to look”

3. AUDIT
• The ISO (International Standard
organization) defines audit as:
Quality audit is defined as a systematic
and independent examination to determine
whether activities and related results comply
with planned arrangements and whether these
arrangements are implemented effectively and
are suitable to achieve objectives.
3

4. Quality audit means a systematic examination
of a quality system.
Quality audits are typically performed at
defined intervals.
Any failure in their proper implementation
may be published publicly and may lead to a
revocation of quality certification.
4

5. COMPONENTS OF AUDIT:-
Audit contains the following five components:
1.Risk Assessment: Identifies relevant risk factors that
challenge an organizational area and further considers
their relative significance.
2.Scope Statement: Identifies the activities that will be
covered during the course of the audit. This includes the
project justification, the project description, the
deliverables, and the success criteria.
5

6. 3.Audit Program: It is the document that contains the
listing of audit procedures as well as the objectives of
the audit.
4.Audit Procedures: They are the specific tasks that the
auditor follows to gather, analyze, and document during
the audit.
5.Work papers: They are the detailed documentation
from interviews and testing that conducted to complete
the audit program.
6

7. OBJECTIVES OF AUDITING:-
1.To determine the conformity or non-conformity of the
quality system in meeting the specified requirements.
2.To determine the effectiveness of the implemented
quality in meeting the specified Quality objectives.
3.To provide the Audit team with an opportunity to
improve the Quality system.
4.To meet the regulatory requirement.
5.To permit listing of the audited organizations Quality
systems in a register.
7

8. AUDITS ARE GENERALLY INITIATED FOR
ONE OR MORE OF THE FOLLOWING
REASONS:-
1.To initially evaluate the supplier where there is a
desire to establish a contractual relationship.
2.To verify that an organization own quality system
continues to meet specified requirements and is being
implemented.
3.Within a framework a contractual relationship to
verify that the supplier’s quality system continues to
meet specified requirements and is being implemented.
4.To evaluate an organization’s own quality system
against quality system standard.
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9. PURPOSE OF AUDIT
 Plans for attaining quality are such that, if
followed the intended quality will be
maintained.
 Product are fit for use and safe for the user.
 Laws and regulation are being followed.
 Procedures are adequate and are being
followed.
 Deficiencies are identified and corrective
actions are taken.
 Opportunities for improvement. 9

10. BENEFITS
Provides status of system implementation
Gives confidence to management
Provides confidence to customer
Uncovers operational problems
Get opportunities for improvements
Provides feedback for corrective and
preventive action
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11. PRINCIPLES OF AUDIT PROGRAM
Five ingredients are essential for successful
audit
1. Emphasis on facts.
2. Attitude of service on the part of auditor.
3. Identification of opportunities for
improvement.
4. Addressing human relation issues.
5. Competence of auditors.
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13. The audit life cycle
Quality system audit can be broken down into four basic
phases
1. Planning
2. Conducting the audit
3. Analysis of result
4. Report and corrective action (including follow-up
audit
• Until all the phases have been fully completed, the
audit can not be considered to be finished the four
phases may be termed the audit life cycle
13

14. TYPES OF
AUDITING
External auditing
Second party audit
(Supplier/Client
auditing)
Third party auditing
(Regulatory audit)
Internal auditing
First party audit
14

15. Internal (First Party, Self)
• Purpose of Internal audit:-
• To Ensure that adequate Quality systems are
maintained
• To asses compliance with the C-GMP’s and
firms standard operating procedure
• To achieve consistency between
manufacturing and testing facilities
• To identify problems internally and Correct
problems prior to a FDA inspection
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16. Designing of the Internal Audit
System
 In a pharmaceutical facility for internal
auditing, you require to check mainly two
things namely
1. Activities carried out by different departments
2. Documents maintained by these departments
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17. Items of Self inspection
 Personnel
 Premises including personnel facilities
 Maintenance of buildings and equipment
 Storage of starting materials and finished
products
 Equipment
 Production and in-process controls
 Quality control
17

18. Continued………
 Documentation
 Sanitation and hygiene
 Validation and revalidation programmers
 Calibration of instruments or measurement systems
 Recall procedures
 Complaints management
 Labels control
 Results of previous self-inspections and any corrective
steps Taken
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19. 1.Self-inspection team
Management should appoint a self-inspection team
consisting of experts in their respective fields and
familiar with GMP.
The members of the team may be appointed from inside or
outside the company.
2. Frequency of self-inspection
The frequency at which self-inspections are conducted may
depend on company
Requirements but should preferably be at least once a
year. The frequency should be stated in the procedure.

20. CONTI...
3. Self-inspection report
A report should be made at the completion of a self-
inspection. The report
Should include:
(a) Self-inspection results;
(b) Evaluation and conclusions;
(c) Recommended corrective actions.
4. Follow-up action
There should be an effective follow-up programmed. The
company management should evaluate both the self-
inspection report and the corrective actions as
necessary.
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21. External audit
 Third party audit
 This audit is conducted by recognized
certification agency
 External auditors follow essential format
described for internal audit.
 Well maintained record
 Review the control chart
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22. External Audit
 Purpose of External Audit
 Confidence in the partnership arrangement
 Ensuring that requirements are understood
 Reducing the risk of failure
 Carried out by company on its vendors
 No legal requirement to conduct the audit
 External audit have experience of GMP as well as
regularly audited by their certification body
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23. Regulatory Audit
• Purpose of Regulatory audit:-
• Networking and confidence-building
between national inspection authorities
• Development of quality systems Work
towards global harmonization of GMP.
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24. TYPES OF AUDIT ON THE BASIS OF METHOD
• System audit or management audit: is
normally an office exercise which determine
the extent to which the document system
represented by the quality manual and the
associated procedure adequately meets the
requirement of the applicable standard.

25. • Compliance audit or on site audit: This is the audit,
which seek to establish extend to which the
documented system is implemented and observed by
the work force.
• Product or process audit: This may be considering a
vertical audit, i.e. looking at all the systems that went
into the product or service. process audits) can be
conducted for any activity that affects the final
quality of goods or services.
• The audit is usually made of a specific activity
against a specific document, such as process
operating instructions, employee training manuals,
certification of personnel for critical operations, and
quality provisions in purchasing documents.

26. • Operational or performance audit:
An operational audit, also referred to as a
performance or management audit, evaluates
the effectiveness of a business' operating
activities in relation to specific objectives.

27. PREPARATION FOR AN AUDIT
• Once an audit is scheduled, the manager should
engage in several proactive steps in preparation for
the audit.
• The manager should understand the purpose of the
audit.
• Is it a financial or compliance audit? Will it entail the
entire operation or just a subcomponent? If the
purpose is not clear, management should seek
clarification.
• Once the focus of the audit is understood, try to
anticipate the materials that the auditor will review
and begin to assemble them.

28. • If known problems exist, be prepared to discuss with
the auditor planned corrective actions and their target
dates. The more clearly the auditor understands these
situations, the less likely misunderstandings will
occur.
• Managers also should inform their staff that the
program is being audited and brief the staff on "audit
etiquette."
• Managers must emphasize the need to cooperate with
the auditor.
• Lack of cooperation will be mentioned in the audit
report.

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STEPS IN PERFORMING
AUDIT

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1. Audit initiation:
The basic right to conduct audit is derived
from the “charter” which has been approved by
upper management.
2. Audit planning:
An audit plan should be prepared to inform the
manager of the activity being audited and the
participating auditors regarding the details of the
audit.

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Elements of plan include:
 Definition of scope,
 Objective of audit,
 Identification of the area to be audited
 A schedule including the expected start and
completion time for audit
 Reference to any relevant standards or procedures
 Audit documentation.

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3. Audit implementation:
The heart of this phase is collection, analysis and
evaluation of factual information and drawing of
conclusion from these facts. The four main elements in
auditing an activity are person, item, equipment and
documentation.
The information collected consist of combination of
both documented evidence and information obtained
through interviews of various personnel.
Post- audit meeting is also a part of audit
implementation.

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4. Audit reporting:
Audit results should be documented in a report
and a draft should be reviewed with the management of
the activity that was audited.
The report should include:
 Purpose and scope of the audit.
 Details of audit plan including audit personnel, dates,
activity that as audited.
 Standards, checklist or other reference document that
were used
 Audit observation including supporting evidence,
conclusion and recommendation.
 Recommendation for improvement opportunities
 Recommendation for follow-up on corrective action

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5. Audit completion:
The audit is completed when the report is
submitted.
Corrective action follow-up:
The final phase of the audit is follow-up
to confirm that corrective action has been taken by the
line manager and that the corrective action is effective.

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STRUCTURING THE AUDIT PROGRAM
Audit of individual tasks or system of tasks are
usually structured. It means they are designed to carry
out upon agreed purposes and are conducted under
agreed rules of conduct.
Reaching agreement on these rules and the purpose
require collaboration among three essentials
participating groups:
1. The head of the activities which are to be the subject of
audit
2. The head of auditing department
3. The upper management.

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Without such collaborative agreement, the audit
program may fail.
• The usual failure mode are:
1. an abrasive relationship between auditors and line
manager
2. a failure of line manager to understand or to accept
the audit report

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AUDIT TEAM
 A group of individuals selected to perform an audit is
known as audit team.
 A team usually has a lead auditor who plans the audit,
conducts the meeting, reviews the findings, prepares
the audit report, evaluates corrective action, and
presents the audit report.
 Auditor must be open-minded and posses sound
judgment, have the trust and respect of line
management and be knowledgeable in the area
audited.
 ASQ recommends other qualification for auditor,
including training, experience, personnel attributes
and management capability.

38. Audit team:
 Conduction of audit are varies from company to
company
 Small firm- one individual
 Large firm- one department
 Qualification:
 Good working knowledge of GMP regulation
 Familiarity with the firm and operation
 Good communication skill
 Listening skill
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39. Conti…………
 Good judgment
 Proper sense in order to sort out what is
important sig. from which is not
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40. Audit report
The report should include the following items:
 Executive summary
 Purpose and scope of audit
 Detail of the audit plan, include audit personal,dates, the
activity that was audited
 Standards ,checklist or other reference document
 Audit observation ,including supporting evidence,
conclusion
 recommendation for improvement opportunities
 recommendation for follow-up on the corrective action
that is to be proposed
 Distribution list for the audit report
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41. Audit Report
Activity of audite :
Section :
Audit officer :
Detail of activity,document,method,procedure,report,result ,reports examined during
audit:
Non-compliance: category:
Corrective action and time scale:
Noted and agreed on behalf of :
Signature of represented :
Corrective action carried out by:
(name)
on(date)
Conform by audit officer :
Signature
On(date)
Received and approved by quality manager
Signature
On(date)
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42. Corrective action follow-up
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Auditor Auditee

43. Human relation in auditing
The reason behind the audit:
• Avoiding an atmosphere of blame
• line manager and auditor fall in to this trap
• Balance in report
• Depersonalizing the report
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AUDIT CAN BE PERFORMED IN
VARIOUS CATEGORIES
1. Audits of policies and objectives
2. Audit of performance against company
objectives
3. Audits of plans, system and procedures
4. Audit of execution
5. Product audit

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PRODUCT AUDIT

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DEFINITION
“ A product audit is an independent evaluation of
product’s quality to determine its fitness for use and
conformance to specification”.
Product auditing generally takes place after
inspection has been completed.
It involves re-inspection of product to verify the
adequacy of acceptance and rejection decision.

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PURPOSE OF PRODUCT
AUDIT

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NEED OF PRODUCT AUDIT

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STAGES OF EVALUATION
 Ideally, the product audit should compare actual
service performance with users needs. This ideal is
so difficult and costly to administer, so most product
auditing consist of approximation.
 For simple product the approximation of test result
versus specification is a useful, economical way of
conducting a product audit.
 As products become increasingly complex, product
auditing is increasingly conducted at several of
stages.

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POTENTIAL STAGES OF PRODUCT AUDITING
Stages at which product
auditing is conducted
Pros and cons of using this stages
After acceptance by inspectors Most economical, but does not reflect effects of
packing, shipping, storage, or usage.
After packing but before
shipment to field
Requires unpacking and repacking, but evaluates effect
of original packing.
Upon receipt by dealers Difficult to administer at such multiple location, but
reflects effects of shipping, storage.
Upon receipt by users Even more difficult to administer but evaluates the
added effect of dealer handling and storage plus effects
shipment to user and unpacking.
Performance in service The ideal, but also most difficult to administer because
of number and variety of usages; can be simplified by
sampling.

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 In conducting product auditing after shipment to the
field, there are other alternatives. If product consist of
small, stable units, it may feasible to send sample
back to central laboratory for evaluation. If the
product consist of large units, it may be more
economical to send an audit team out to the field.
For example:
In the graphic art industry, a supplier of coated
paper may send a team out to the field to observe
1.Product in customer’s warehouses
2. Actual running of paper on customer’s presses such
as printing of magazines.

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 Product audit can also be applied at stages during
manufacture “ In-line audit” or “work in process
audit”.

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DESIGNING AN AUDIT PLAN
 As the plan of auditing has a wide impact on executive
decision making, it is essential that the design be made
with the full participation of the departments affected.
 The usual approach is to designate an interdepartmental
committee to guide the preparation of the plan, leaving
to Quality Assurance Department to do the detailed
work.

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Many companies use audit manual to spell out
the design of the audit for the auditor.
For example:
The manual may specify different areas of
maintenance of machine but it rely on auditor to how
much depth he should audit a particular area.

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 Audit plan must give guidance on selection of detailed
product dimension or properties that are to be checked.
 Provisions should be made for two types of audit –
random and focused:
1. Random audit is based on random selection of
product characteristic to yield an unbiased picture of
quality status.
2. A focused audit is to concentrate on a specific area
of the product.

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SCOPE OF AUDIT
The scope of product audits completely misses
the mark in measuring customer’s reaction.
For example:
A vehicle manufacturer had a system of taking a
weekly product audit sample from production. A
comparison of separate market research result with
the internal product audit was very large. Only 18%
of the characteristic that customer claimed were
important to them were being checked in product
audit.

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Contd….
 For simple product, a representative sample of finished
good may be brought in the open market.
 These sample are then checked for fitness for use and
conformance to specification.
 Such audits may include a review of competitive product
as well.
 For complex product, it is feasible to secure product
audit data at multiple stages of product progression.
 Additionally audit data are then secured from selected
distributors and dealer’s under a special joint “open and
test” audit.
 In addition the data from the consumer “arrival card”
are used.

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SAMPLING FOR PRODUCT
AUDIT
 When the purpose of audit remains one of assurance
rather than control, the sample size is arbitrary and
reflects a balance between the cost of large samples
and the unreliability of small sample.
 The selection of units within a sample should be base
on the concept of random sampling.
 For products manufactured by mass production,
sample size for product audit can be determine using
conventional statistical method.
 These method determine the sample size required for
stated degree of risk.

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 In contrast for product manufactured as large unit or
small quantity, the conventional concept of statistical
sampling are very costly.
 In such cases sample sizes are often arbitrary and they
seem small from the viewpoint of probability
consideration.
For example:
A vehicle manufacturer uses a product audit sample
consisting of 2% of production per shift with a
minimum of five vehicles. Even though the number of
sample was small, the total number of characteristic that
are sampled are quite large. For these vehicles 380
items are checked.

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In case of highly homogenous production, a
sample of one unit taken from the batch
production can be adequate for product audit

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REPORTING THE RESULTS OF
PRODUCT AUDITING
 The results of product audit appear in form of the
presence and absence of defects, failure ,etc.
 Product audit program often use a seriousness
classification of defects.
 Defect are classified in terms such as critical, major,
minor A, minor B each with some “weight” in the
form of demerits.
 In product audits, the usual unit of measure is
demerits per unit of product.

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Weighting:
It is comparatively easy to assign weights to
each class to quantify the seriousness. Usually a
weight of “100 demerits” is arbitrary assigned to the
most serious defect class and weights
Seriousness classification Weight or demerit value
A (critical) 100
B (major) 35-75
C (minor) 10-25
D (incidental) 1-10

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Summary:
In summarizing defects are converted to demerits to
arrive at composite demerits per unit.
For example:
The result of product audit on one product line of 2500
units for one month were:
Defect class Weight No. of defects
found
Total demerit
A (critical) 100 2 200
B (major) 50 7 350
C (minor) 10 28 280
D (incidental) 1 26 26

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Total demerit = 856.
Since there were 2500 units of product audited
during the month,
the demerits per unit = 856/ 2500 = 0.34
Clearly, the more the important the
characteristic the greater attention it should receive in
matter such as extent of quality planning, tooling and
instrument, size of samples, strictness of criteria for
conformance etc.

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 Seriousness classification is for both for quality
characteristic and for defect characteristic.
 The quality characteristic list comes from the
specification and the list of defects comes from
evidence of failure during use (service report).
 When the two lists are classified for seriousness,
quality characteristic is used mainly for quality
planning while the defect characteristic is used mainly
for inspection planning and for product auditing.
 These two lists differ in their content.
For example:
A single quality characteristic e.g. shaft diameter
1.000 gives to two defects oversize and undersize.

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Class A- Very serious
a. Will surely cause an operating failure of the unit which cannot be readily
corrected in the field . Eg: open winding
b. Will render unit totally unfit for service. Eg: dial finger wheel does not return to
the normal after operation
Class B- Serious
a. Will probably cause an operating failure of the unit in service which cannot
be readily corrected in the field. Eg: relay contact is not made..
b. Defects of appearance or finish that are extreme in intensity. Eg: finish
doesn't match finish of other parts.
Class C- Moderately serious
a. Likely to involve increased maintenance or decreased life. Eg: dirty contact .
b. Major defect of appearance, finish. Eg: finish scratched or designation
omitted
Class D- Not serious
a. Will not affect operation, maintenance or life of the unit in service
b. Minor defects of appearance, finish. Eg: slightly scratched finish
Serious Classification of defects (BELL SYSTEM)

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Defect Effect on
consumer safety
Effect on usage Consumer
relations
Loss to company
Critical Will surely cause
personal injury
or illness
Will render the
product totally unfit
for use
Will offend
consumers
sensibilities due to
odor, appearance
Will lose
customers and will
result in losses
greater than value
of product
Major A Very unlikely to
cause personal
injury or illness
May render the
product unfit for
use & may cause
rejection by the
user.
Will likely be
noticed by
consumers and
will likely reduce
product stability
May lose customer
& may result in
losses > the value
of the product; will
substantially
reduce production
yields.
Major B Will not cause
injury or illness
Will make product
more difficult to use
May be noticed by
some consumers
or not
Unlikely to loose
customers; may
result in loss equal
to product value
Minor Will not cause
injury or illness
Will not affect
usability of product;
may affect
appearance
Unlikely to be
noticed and if
noticed then of
little concern
Unlikely to result
in loss.
EXAMPLE:--IN FOOD INDUSTRY

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 Audit result can also summarized to show the
effectiveness of the previous inspection activities. A
simple ratio is used such as percentage of total defect
which are detected by the inspection.
For example:
If the previous inspection revealed a total of 45
defects in a sample of ‘N’ pieces and if the product
audit inspection revealed 5 additional defects then the
effectiveness of inspection would be
45/ 50 *100 = 90 %

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STANDARD FOR COMPARISON
 The score on demerit per unit must be compared with
some ‘standard’.
 The usual standard is previous practice, the manager
wants to see whether the quality is improving or
worsening.
 To quantify past practice, the auditors conduct the
product audit over a sufficient number of months to
acquire stable data.
 This period is known as the ‘base period’. In
calculating the base period, it is usual to exclude
known abnormalities such as new-product troubles
and the effect of temporary crises.

70. 70
 The resulting “refined” base period then becomes a
basis for comparison, much as previous year’s cost or
expenses.
 Alternative, the standard for comparison may be
“market research ”. In such cases, the product audit
plan is applied for competitive products in the same
way that is applied to the company’s own product.

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ACTION ON DISCREPANCIES
When the product audit reveals defect or
discrepancies, the line manager are notified for two
reasons:
1. To secure their verification of the factual situation
so that the subsequent quality rating is based on
established facts.
2. To alert them to alarm signals inherent in the
presence of defects in the product which has already
been approved for shipment to customers.

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EFFECT OF PRODUCT AUDITING ON
CLARIFYING QUALITY STANDARDS
Introduction of product auditing invariably has a
beneficial effect on clarifying quality standards. This
effect is the result of:
1. The inevitable discussion between the auditors and
the line organization.
2. The difference in viewpoint attributable in emphasis
3. The use of product audit results to provide a running
scoreboard of product performance.

73. 73
REFERENCES:
1. Gryna F.M., Chua R.C.H., Defeo J.A., “Juran’s
Quality Planning and Analysis for enterprise
Quality”, Ed 5th, New York- Tata McGraw Hill,
pp.472-473, 537-541.
2. Juran J.M., Gryna F.M.,“ Juran’s Quality Control
Handbook”, Ed 4th McGraw- Hill International
Edition, Industrial engineering series, pp. 9.4-9.29,
18.38-18.45.
3. Juran J.M., Godfrey B.A., “Juran’s Quality
Handbook”, Ed 5th , McGraw Hill, pp.23.20-23.25.

74. 74
Contd…
4. http://www.auditnet.org/process.htm accessed on 25th
March 2020.
5. www.asq.org/gad accessed on 29th March 2020.
6. http://elsmar.com/Audit/sld052.htm accessed on 29th
March 2020.
7. www.asq.org/pad accessed on 2ed April 2020.

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