Audit CBT

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					CBT 2 - Auditing Techniques

Course Format
 Course is made up of this PowerPoint presentation
 and accompanied by the small questionnaire next
 to you!
 Advance through the slideshow as you need by
 hitting the “ENTER” key on your keyboard!
 You should be able to complete within 2 hours

1.   Introduction to Auditing (slide 4)
2.   Preparation of an Audit (slide 21)
3.   The Audit Process (slide 35)
4.   The Human Element (slide 58)                2
               Check on yourself

Please read the questionnaire and answer the questions to
your best knowledge without consulting this presentation
or an instructor.
Be fair to yourself!
Complete it (not more than 8-10 minutes), turn it around
and continue here.

Part 1 - Introduction to Auditing

    At the end of this session, you will:
   have been introduced to the concepts of auditing;
   be able to recognise the different types of audit;
   be able to understand the objectives of auditing;
   be able to understand some of the terminology used;
   be familiar with ISM certification and auditing

          What is an Audit?

   A systematic and independent examination to
   determine: -
 whether safety/quality activities comply with
    planned arrangements;

 whether these arrangements are implemented
    effectively; and

 are these arrangements suitable to meet the
    company’s objectives.

an audit can be thought of as a
thorough examination of the
company’s safety or quality
management system!

What’s in the mind of the Auditor?

  “is the management system really resulting in the
  company operating safe ships and providing a
  quality service to their customers?”

  or to put it another way;

  “are the company’s operations safe and healthy?”

      Purpose of the Audit

To compare actual work practices
with the written instructions of the
Any difference between the two is
noted as an Audit Finding or
Non Conformity
Audit deficiencies must be
corrected with a view to
continuous improvement.

a) - Internal Audit - “Us on Us”

 An audit carried out by a company to
 evaluate it’s own performance.

 A person independent of the area being
 audited should carry out such audits.
 Sometimes called “First Party Audits”.

b) - External Audit - “Us on Them”

   An audit carried out by our company to evaluate
   the activities of our contractors, suppliers and
   agents, etc.

   i.e. Shipmanager auditing Manning Agent or,
        Manning Agent auditing Travel Agent.

   Sometimes called “Second Party Audits”.

c) - External Audit - “Them on US”

   An audit carried out by a principal on our

   i.e. Shipmanager by Shipowner, or
        Manning Agent by Shipmanager.

   Also referred to as a “Second Party Audit”.

Third Party Audit - “Them on Us”

   An audit carried out by an organisation’s
   regulatory body, class society or other
   certifying body.

   Performed in order to issue or maintain a
   certificate of recognition or proof that the
   company’s safety / quality management
   system meets stipulated and / or contractual

Objectives of a 3rd Party Audit

    To maintain recognised certification for the
     safety/quality management system (e.g. DOC audit)

    To obtain proof that the company maintains their
     quality and safety standards all time (e.g. owners

Depth of an Audit
         A term used to explain how
         thoroughly the auditors will
         examine the system being

         A system audit is usually a
         superficial or shallow audit used
         to get the feel of a safety/
         quality system, whereas an
         adherence or compliance audit
         is a full in-depth look.

Scope of an Audit

           Refers to the amount of the
           safety/quality system that
           should be reviewed in order
           to confirm that activities are
           in compliance with company

           This means that individual
           sections of the SMS can be
           audited onboard ship at
           different times, thereby
           reducing the workload on
           the auditor, and ship’s staff.

 Maintaining Independence

It is a requirement in both safety and quality
management, that wherever possible, auditors
must be independent of the area being audited.

In all cases, an auditor must be properly trained
in auditing techniques and knowledgeable in
the area(s) that they are auditing.

ISM Certification Requirements

  Under the ISM Code, the shipmanagement
  company is required to obtain a Document of
  Compliance (DOC) which is valid for 5 years;

  Each ship under their management is
  required to obtain a Safety Management
  Certificate (SMC) which is also valid for 5

     ISM Auditing Requirements for

Ships are required to be audited as follows:

   internally - one time in 12 months
   3rd Party - initially prior to issuing the SMC, then
    between the second and third anniversary date
    of issue of the certificate (intermediate 2.5 years), and
    finally upon renewal of the SMC after 5 years.

       Summary of Part 1

we have reviewed:

   an introduction to the concepts of auditing;
   recognition of the different types of audit;
   understanding of the objectives of auditing;
   understanding of the terminology used;
   familiarization with ISM on board certification and
    auditing requirements.
Take a break, before you carry on! 10 minutes.

Part 2 - Preparation for the Audit

  At the end of this part, you will have
  reviewed the preparations that are
  required in order to ensure that the audit
  will proceed smoothly and the result will
  favour the auditee (that’s you!).

   Pre Audit Meetings

          Usually 2 types:

1) Senior Officers and 2) Departmental

Senior Officers Meeting

                      Called and led by Master;
                      Brief senior officers regarding
                       depth & scope;
                      Review & circulate previous
                       audit findings;
                      Establish inter-departmental
                       co-operation, where required;
                      Meet at regular intervals to
                       update progress;

Departmental Meeting

    Called by Head of Dept following Senior Officers
    Brief all crew on scope and depth of audit;
    Allocate tasks, i.e. procedural review, verification of
     records, etc.;
    Schedule mock audits to prepare crew; and
    Arrange further familiarization / instruction where

Previous Audit Findings

a) If we do not learn the lessons from history, they have a
way of coming back around to punish us all over again.
b) Findings from previous audits should be reviewed firstly
at departmental level and once a satisfactory conclusion is
reached, this should be reported at managerial level.
c) Do not underestimate what appears to be a small
matter left unresolved from the last audit.

Procedural Review

As an audit is an examination to determine that operations
comply with planned arrangements and that these
arrangements are implemented effectively -
the next logical step is to review the company’s operating
procedures and ensure that crew are aware of these and
following the company’s instructions.

Procedural Review (cont’d)

     Job Descriptions
    Check accuracy - do the crew actually do what their
     job description says that they do?
    Is the person carrying out tasks as allocated or have
     some tasks been re-assigned?
     Auditors will check regarding understanding of job
     descriptions - ensure that all crew are aware of theirs.

Procedural Review (cont’d)

    Work Instructions, Record Review
   Are all operations been carried out as per
    written procedures?
   Is the work recorded correctly, on the
    correct form, is it signed and filed
    Poor document control is one of the
    target areas for audit findings. This is
    usually a human failing attributed to
    laziness or improper training.

Procedural Review (cont’d)

     Lists   (individuals need to prepare themselves – getting organized)

    Make a personal list of things that apply to you:
     - things to check;
     - things to clarify;
     - details of procedures to brush up on; and
     - prepare for a mock audit, etc.

Mock Audits

                 Should be carried out on
                  department basis;
                 Use senior officers (from other
                  departments) wherever possible;
                 Make them realistic and take them
                 Audit all staff wherever possible -
                  you never know who the
                  auditor(s) will select for interview;
                 Good training tool

Common Audit Faults

     The following is a list of common faults or
     failings that are revealed during an audit:

    Lack of knowledge of Safety/Quality Policy;
    Not knowing the DP of the company;
    Inadequate reading of manuals;
    Improper updating of manuals;
    Poor Record Keeping;
    No awareness of Job Descriptions, and

Common Audit Faults

    Incorrect or not updated Crew Lists;
    Out of date Reference Library List;
    Lack of Emergency Drills & Exercises;
    Emergency/After Hours Contact Details not updated;
    Communication Records;
    No follow up regarding Incident Reports or NC`s;
    No attention to Previous Audit Reports;
    Lack of Crew Familiarisation Training, and

Common Audit Faults

    Outdated Vessel Certification Status;
    No Master’s Reviews;
    Personnel Files maintained incorrectly; and
    Poor Document Control.

Part 2 - Preparation for the Audit

 This session is now complete, you have
 reviewed preparations required in order
 to ensure that the audit will proceed
 smoothly and the result will favour you!

         Part 3 - The Audit Process

At the end of this presentation, you will be:
familiar with the total audit process from
       - scheduling;
       - planning & preparation;
       - performing the audit;
       - reporting audit findings; and
       - following up on audit findings.

    Determined by:
   Regulatory (ISM/ISMA) requirements;
   Maturity of the system. A developing
    system needs to be audited more
    frequently; and
   Other pertinent factors, i.e. major
    changes to the system, results of
    previous audits, a serious safety or
    quality failure or preparation for a
    new project.

      Scheduling cont’d

An audit schedule must be established by the person(s)
responsible for auditing and circulated to each ship.
This schedule should show all planned internal and 3rd
Party audits for a 12 month period.
Internal audits should always be planned to take place at
least 2-3 months before a 3rd Party audit so that any
problems discovered can be attended to effectively.

    Audit Preparation & Planning

    The following functions are handled by the
    organisation performing the audit (e.g. GL):
   Appoint a person(s) to be responsible for the audit;
   Notify the auditee;
   Agree the audit timetable;
   Identify & obtain all relevant documentation;
   Brief audit team members (if applicable); and
   Develop audit checklists.
    Performing of the Audit

Can be divided into 5 distinct phases: -
   The Entry Meeting;
   The Tour;
   The Interviews;
   Evaluation of the Results;
   The Exit Meeting

The Entry Meeting

       Attended by Auditors and Senior
       Introduce auditor(s) and officers;
       Confirm purpose & scope;
       Review timetable & agenda;
       Summarise audit techniques;
       Address non-conformities;
       Agree time for Exit Meeting;
       Arrange for escorts.
                   The Tour

   Familiarisation;
   Observing safe work practices
    & procedures;
   Auditor may stop and chat with
    working staff - remember
    he’s still auditing!!!
   Will look for maintenance
    defects and cross check with
    defect reports, etc.

The Interviews

       Conducted following the checklist as
        a guide;
       Asks “open” questions, making the
        auditee do the talking;
       Checking records;
       Seeking “objective evidence” to
        verify compliance with written

- Open Questions

        Usually begins with the words
         “how”, “what”, “when”, “why”,
         “who” or “where”;

        Makes the auditee talk, allows the
         auditor to gather objective evidence
         regarding compliance/non
         compliance with procedures.

   - Objective Evidence

Can be defined as:

“information, records or statements of fact
that are based on the auditor’s observation,
measurement and/or test and which can be
substantiated (proved)”;

Used to support the Auditor’s findings, strong
objective evidence is very difficult to dispute.

           - Closed Questions

 Questions   that generate a “yes” or “no”
 e.g.   Do You?, Have You?, etc;
 Rarelyused in auditing as answers do not
 provide auditor with sufficient objective

         - Rule of Thumb

 Good  auditors only
 talk for 25% of the
 Theylisten for the
 remaining 75% - that
 means you as auditee
 do the talking.

       Evaluation of the Results

This is where the auditor(s)
consider and evaluate the evidence
generated during the audit.
Objective evidence of a departure
from company procedures,
documented requirements and/or
other applicable documents can be
considered as valid justification for
an audit finding.

- Audit Findings

         May also be referred to as Non-

         Should be brought to the
          attention of the person being
          interviewed at the time of

         Must be reported formally at
          the closing meeting on a
          Finding or Non Conformity

             - Audit Findings

    Can be categorised as follows:

   Major - where the company’s instructions have clearly not
    been correctly followed or ignored and this omission
    potentially threatens the safety of the ship, or the crew,
    or the environment;
   or group of similar findings within the same element that
    lead the Auditor to believe there is a serious problem;
   i.e. document control failures on the bridge, with personnel
    records and maintenance records;
            - Audit Findings

    Categorized as follows:

   Minor - a single or minor lapse of discipline or control
    that does not pose any serious or immediate danger,
    nevertheless, improvement is required; and

   Observation - a comment on an existing condition
    with regards to the overall improvement of the system
    - given as advice only, corrective action is advisable but
    not mandatory.
                The Exit Meeting

   Attended by Auditors and Senior
   Lead Auditor presents overview of
    the audit;
   Introduce any findings;
   Auditee may at this time dispute a
   If agreeable, auditor may
    downgrade or cancel finding.
The Exit Meeting cont’d

             Master to sign to acknowledge
              finding - this DOES NOT signify
             If available, auditor will present
              formal audit report;
             Master and Company must
              agree on most suitable form of
              corrective action - this is then
              passed to Auditor for approval.

Auditor’s Recommendations

   Auditees will usually ask the auditor for a
    recommendation on correcting the finding;
   Auditors are not required to reply; and
   Any recommendation from the auditor must
    be taken as personal advice - not necessarily
    the advice of the organisation conducting the

            The Follow Up

   Master & Company must determine & implement
    Corrective Action;

   Auditor may require to verify effectiveness of
    corrective action in order to close out finding report;

   May take the form of a “mini audit” focusing on the
    deficient areas.

                The Follow Up

   If the corrective action is effective, the finding is

   If not, a new finding report will be issued by the
    Auditor and the Company must review the corrective
    action taken;

   Only when the corrective action is acceptable will the
    auditor finally close out the finding.

        The Audit Process

This presentation is complete, during this
presentation, you have reviewed:
the total audit process from scheduling;
  - planning & preparation;
  - performing the audit;
  - reporting audit findings; and
  - following up on audit findings.
Take a break, before you carry on! 10 minutes.

Part 4 - The Human Element

At the end of this session, you will have
been introduced to the human elements
that form an integral part of the audit
This includes differences in personalities,
the importance of knowledge, the effects
of body language and common sins
committed by auditees.

Human Interaction

            Different types of audits
            create different pressures
            on auditor/auditee.
           External & 3rd Party audits
            put a distance between
            auditor/auditee; whereas
           Internal audits may
            involve interaction with
            close work colleagues.

What is the objective of the audit?

    To verify that all work practices are in compliance
    with the documented safety management system;
    If not, highlight areas where improvements are
   Therefore it is important not to let personal feelings
    reduce the effectiveness of the audit, or damage the
    harmony of the working environment.

    Please Remember

It is always the system that is
         being audited;

     - not the individual
        crewmember !

    Potential Danger Areas

    Can be divided into three areas:
   Attributes and Personality of the Auditor;

   Attributes and Personality of the Auditee; and

   The knowledge base of the Auditor.

 Attributes and Personality of the Auditor

     Can also be divided into six areas:
     a)   Fail the Auditee;
     b)   The “autocratic” Auditor;
     c)   The “wish to be friends” Auditor;
     d)   The “untrusting” Auditor;
     e)   The “tired” Auditor; and
     f)   The ‘busy” Auditor.
a) Fail the Auditee

         The purpose of the audit is
         to determine compliance,
         not to find non-compliance
         at any cost.
         It is not true to say that “the more non
         compliances found, the more effective
         the audit”.
         If the auditee is compliant, the auditor
         should say so and document such a
         result. A positive result is good for
         company morale.

b) The “autocratic” Auditor

             Some auditors view the audit
             process as their right to give
             orders and recommend changes
             to procedures.
             This is more common during
             internal audits where office staff
             maybe used as auditors.
             Good auditors listen, if they are
             constantly giving orders and
             making changes - they cannot be
             listening effectively.

c) The “wish to be friends” Auditor

               In some cases the auditor may
               wish to be friends with

               They see the audit as a possible
               means of damaging such
               friendships by exposing possible

               As a result, difficult or searching
               questions are not asked, leading
               to an ineffective audit.
d) The “untrusting” auditor

           Some auditors are convinced that
           all auditees are trying to hide
           something, this attitude results in
           mistrust and suspicion.
           Such auditors are not listening
           effectively as their time is spent
           searching for hidden meanings.
           A good auditor compiles objective
           evidence through interview, supported
           by documented records. If the auditee
           complies, they comply.

          e) The “tired” auditor

Auditing like many jobs
can become tedious and
Beware of auditors who
have become tired and are
auditing automatically.
Such an auditor has lost
interest and cannot carry
out an effective audit.

f) The ‘busy” auditor

          These usually appear during Internal
          As a co-worker, the auditor has
          other responsibilities and may
          postpone the audit because of other
          Similarly, during your audit, they
          may be distracted and constantly
          taking breaks to attend to other
          This gives the impression that the
          audit is not important.

                What to Do?

    If during any audit you observe any of the
    danger areas just mentioned, you should:
    Bring it to the attention of your head of dept or the
    Master who should then:
   If an internal audit, request the company to review the
    selection of their internal auditors;
   If an external or 3rd Party audit, advise your company
    management, who will in turn, advise the organization
    carrying out the audit.

 Attributes and Personality of the Auditee

   There are usually 2 different types of problem
   a)   The “aggressive” Auditee; and

   b)   The “disorganised” Auditee.

a) The “aggressive” Auditee

          Many people, particularly management,
          have difficulty when another person
          asks searching questions regarding their
          The audit is seen as a threat to their
          competence and/or ability and the
          auditor is viewed as a policeman or spy.
          There may also be strong negative
          feelings towards the quality/safety
          management system, usually resulting
          from a lack of training.

b) The “disorganised” Auditee

              Auditees who are uncomfortable with the
              audit process may use many tactics to
              postpone or delay their interview in the
              hope that the auditor will move on.
             Not being available at the agreed time;
             Being interrupted by telephone calls or
              other crewmembers;
             Engaging the auditor in idle conversation;
             Offering a banquet style lunch with

         Do these tactics work?

Auditors are well aware of such tactics and are trained
to deal with them.
They only create a negative impression of the auditee;
The auditor will need to stay around longer to complete
their task, thereby giving them more opportunities to
discover non-conformities.

 The Knowledge Base of the Auditor

Any auditor must have a good knowledge of the safety or
quality standard, the written procedures of the Company
and the nature of the business of the Company. Without
such knowledge, the auditor may:
   Place incorrect level of importance on an aspect of the
    standard or procedure, i.e. incorrect grading;
   Ask questions outside the scope of the audit or the
    responsibilities of the auditee; and
   Ask questions or accept answers that cause the
    auditee doubt the competence of the auditor.          75
 The Knowledge Base of the Auditor

               During internal shipboard audits, it is
               possible for the auditor to behave as
               a “technical inspector” and not as a
               someone trained in auditing skills.

               This is particularly prevalent where
               the audit is carried out by a
               Superintendent, and the audit
               degenerates into a technical
               inspection/discussion rather than an
               audit of the safety management

     The effects of Body Language

    One of the most important yet underestimated
    tools at the disposal of an auditor or auditee.
    All people master body language without knowing
    it and it is a very international language.
   Crossing of arms and legs is a sign of being on the
    defensive, disinterested or displeased;
   Leaning forward denotes hostility; and
   Leaning back denotes superiority, confidence and
         How do we communicate?

    Research shows that the total impact of a
    message is about:
   7% verbal (words only);

   38% vocal (tone of voice and inflection); and

   55% non-verbal (expressions and actions).

                     Try This
Emphasize the world in bold type, see how the meaning changes: -

             I did not say he stole the money.
           I did not say he stole the money.
            I did not say he stole the money.
            I did not say he stole the money.
            I did not say he stole the money.
            I did not say he stole the money.
            I did not say he stole the money.
What other non-verbal signals do we use?

                            I don’t know!
                  Very easily communicated;
                  Other ways include scratching your
                   chin, staring into space, looking down
                   or not responding to a question.
                  If an auditee is unsure of the
                   information required, do not use body
                   language. State clearly that you are not
                   sure but redeem the situation by
                   showing the auditor where in the
                   company manuals, the information is
            I know

   Once again, easily interpreted;
   Other ways include smiling and
    widening of the eyes;
   Auditors like confident answers.
   Confidence comes from having a
    good working knowledge of the
    safety/quality management

I’ve made a mistake

   Humans make mistakes, no one
    is perfect;
   Auditors accept honest mistakes,
    do not attempt to cover up by
    being dishonest;
   If you make a mistake, admit it
    then give the auditor the correct
    answer or show them the
    objective evidence that they
    Anger or Frustration

   Not always against the auditor;
   May surface due to external
    reasons but do not allow auditor to
    see that there maybe problems
    onboard the ship or with the
    Company - they do not need to
    know about them.
   May give cause for concern
    regarding management style or
    the leadership ability of the
   Audits can be stressful and auditees
    should not become emotional;
   Other ways include change of skin
    colour, i.e. turning white;
   Closing meetings are particularly
    stressful. Auditees should accept
    justified findings, continuous
    improvement benefits all concerned.
   Do not be argumentative, you don’t
    make any friends this way.

   Beware of innocent comments
    intended to be humorous;
   Be especially careful regarding
    religion or politics, unless you know
    the auditor well;
   It is very difficult to recover a
    situation after saying something
    foolish and then expecting an auditor
    to take you seriously;
   There is a time and place for humour
    and a carefully selected joke can be
    used as an icebreaker.

   A very common mistake made
    by auditees;
   Do not criticize the company,
    shore staff, other crewmembers
    or the management system in
    front of the auditor;
   Lack of commitment is a
    management failing and is
    easily detectable and
    considered serious.

Superiority Complex
   Does not encourage a spirit
    of openness and continuous
   Senior management display
    the characteristics of a
    dictator where only their
    opinion counts;
   Middle management blindly
    follows in fear; and
   Often noticed on ships with
    mixed nationality crews
Common Auditee Sins (Mistakes)
              Lack of understanding of the
              Lack of understanding of the
               audit process;
              Lack of preparation for the audit;
              Attempting to delay or distract
               the auditor;
              Being uncooperative, late or
               keeping the auditor waiting;
              Being evasive or dishonest;
Common Auditee Sins (Mistakes)

              Offering information that is not
               asked for, required, or that is
               outside your area of responsibility;
              Being critical of company
               management and/or the
               management system; and
              Bringing personal issues or
               grievances into the audit.

Tips for a Successful Audit
             PREPARE;
             Arrange a tour of the vessel.
              Highlight location of toilets,
              emergency exits, smoking/no
              smoking areas, work area for
              auditor(s) use, use of cellular
              phone, camera, etc.
             Prepare PPE for the auditor(s) in
              advance. If the auditor(s) need to
              change, prepare a spare cabin;
             Check for any food preferences;
Tips for a Successful Audit
            Advise the ship’s voltage;
            Introduce the auditor to the crew
             to encourage co-operation;
            Arrange a guide to accompany the
             auditor at all times;
            Keep to the audit timetable. If this
             is not possible, advise the auditor
             of proposed changes;
            Maintain a high standard of
             housekeeping at your place of

Tips for a Successful Audit

            Answer only the question that is
             asked, do not be over
            Ask the auditor to repeat or re-
             phrase the question if you do not
            Lead the auditor where possible. If
             not specified, select the most
             competent staff to be audited;
            Accept findings where justified.
             Argue your case only when you’re
Tips for a Successful Audit

            If the auditor will stay onboard
             overnight, prepare a cabin with
             clean linen, towels and soap, etc.
            Give necessary SMS shipboard
             familiarization & keep a record;
            Ensure that the auditor is made
             aware of alarm signals and muster
            Advise auditor of ship’s meal
             times, etc.
Part 3 - The Human Element

     The final session has been completed!

     You have reviewed the human elements that
     form an integral part of the audit process.
     This included differences in personalities, the
     importance of knowledge, the effects of body
     language and common mistakes committed by
     With the knowledge you have now, please
     take the questionnaire and check on all
     questions again!

We hope you will find this course useful and the content
will help you to prepare for the next forthcoming audit!
If you have any comments please write them down and
   send them to the HSC Crew Operation Manager!
 Thanks for participating and we wish you always safe


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