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ASEAN COSMETIC GMP

Training Manual Module 9


INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 1 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

1. TABLE OF CONTENT

a. Introduction
 Objectives
 Description of Internal Quality Audit
 Scope of IQA
 Benefit of IQA
 The key principle of internal audit
 The role of internal audit
 Quality audit documentation
b. Managing the internal audit program
 Process flow for the management of an audit program
 Authority for internal audit program
 Establishing the audit program
 Audit program implementation
 Monitoring and reviewing the audit program
c. Audit activities
 Overview of audit activities
 Initiating the audit
 Conducting document review
 Preparing for on-site audit activities
 Conducting on-site audit activities
 Preparing, approving, and distributing the internal audit report
 Completing and conducting audit follow-up
d. Conclusion
e. References

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 2 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

2. INTRODUCTION

2.1. Objective:
 to understand the general description and requirement of internal audit
 to identify the role of self inspection of internal audit in the quality management
system
 to learn how to plan and perform the internal audit and take remedial action
based on the result of internal audit

2.2. Description of Internal Quality Audit


 “Internal Quality Audit" is an independent examination of the arrangements for
ensuring quality, e.g. quality assurance structures, mechanisms and procedures,
and of the effectiveness of these arrangements.
 A documented and systematic tool, used by management and done periodically
by independent, qualified people to verify and evaluate an organisation’s
commitment to the principles of Good Manufacturing Practice (GMP) as well as
compliance to regulatory requirements. An organisation that is highly
committed to GMP will not only meet the regulatory requirements but far
exceed them.
 its purpose is to report to the management on the adequacy of the operation of
existing quality management system. Principle benefit of audit is that it
promotes enhancement through self-reflection
 Internal audit is used by the organisation to better understand itself or others.
The activity and its results must be documented and shared with those who can
take action based on the audit findings. The audit must be done is a planned
and organised way so that the deficiencies are immediately identified and
corrected before they adversely affect the products and the company’s
reputation.
 “audit" itself is a checking system, it is NOT a quality assessment, because
no judgment is made by the auditing group of the actual quality which has been
provided by the company. The focus is on continuous improvement through
self-evaluation and local control for monitoring and enhancing its own quality.
 It also helps the management in communicating their policies and the workers
understand and do their jobs well.

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 3 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

2.3. The scope of internal audit


The quality of all systems should meet GMP requirements. This includes:
 the systems that assure the quality in the design, approval, monitoring and
evaluation of products should comply GMP requirements;
 the systems that assure the quality in GMP implementation and its strategies;
 the systems that assure quality in appointment, development and performance
of staff and key personnel;
 the systems that assure quality in obtaining and responding the feedback from
customers, consumers, employers, employees, government authority, and other
relevant institutions.

2.4. Benefit of internal audit


 Tells you the health of the quality system
It serves as a benchmark of current performance against which future
improvements are compared. An audit will show the existing system and
practices. It enables the organisation to achieve consistent performance
throughout the various departments or sites.
 Identify root of the problem and plan for corrective and preventive actions
(CAPA) with timeline
Avoiding of potentially big problems. Minimise the chances of “if we have known
it earlier….”.
 Better allocation of resources
Redesignation of job functions and management of resources.
 Able to avoid potentially big problems (continuous improvement principle)
Having a structured internal audit program helps to identify, avoid and/or
minimise problems. It also serves as a mean for future improvement.
 Learn what an auditor looks for
Standard or expectations are communicated during the audit. In addition, ideas
and solutions to problems can be shared between the auditors and aduitees. A
qualified auditor should be able to explain the rationale behind the
requirements. Each audit is an opportunity to learn about the quality system of
a company as well as the various approaches in meeting the GMP expectations.
 You will finally know whether you comply
Compliance brings many benefits in terms of company’s reputation, productivity
and resources management.

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 4 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

2.4. The key principles of the internal quality audit are:

2.4.1. The principles relate to the audit definition


 Independence: the basis for the impartiality of the audit and objectivity of the
audit conclusions
Auditors are independent of the activity being audited and are free from bias
and conflict of interest. Auditors maintain an objective state of mind throughout
the audit process to ensure that audit finding and conclusions will be based only
on the audit evidence.
 Evidence-based approach: the rational method for reaching reliable and
reproducible audit conclusions in a systematic audit process.
Audit evidence is verifiable. It is based on samples of the information available,
since an audit is conducted during a finite period of time and with finite
resources. eThe appropriate use of sampling is closely related to the confidence
that can be placed in the audit conclusions.

2.4.2. The principles relate to audit activity:


 it is reviewed by independent internal or external party
 the basis of the audit is the critical self-appraisal
 it tests the system by sampling (i.e. selection of particular issues rather than a
comprehensive scrutiny) and the tracking of these issues through the
documents provided and during the audit visit.
 the audit process is designed to be open, constructive and an effective use of
staff time. Audit teams should recognize that their primary role is to assist the
company to improve its GMP implementation.

2.4.3. The principles relate to ‘audit question’


Audit teams will ask some version of these basic "audit questions" about the quality
systems in place:
 what are you trying to do?
 why are you trying to do it?
 how are you doing it?
 why are you doing it this way?
 why do you think this is the best way to do it?
 how do you check its effectiveness?
 what do you do about the results of the check?

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 5 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

2.4.4. The principles relate to auditors :


 Ethical conduct: the foundation of professionalism
Trust, integrity, confidentiality and discretion are essential to auditing
 Fair presentation: the obligation to report truthfully and accurately
Audit finding, audit conclusions and audit reports reflect truthfully and
accurately the audit activities. Significant obstacles encountered during the audit
and resolved diverging opinions between the audit team and the auditee are
reported
 Due professionalism care: the application of diligent and judgment in auditing
Auditors exercise care in accordance with the importance of the task they
perform and the confidence placed in them by auditee. Having the necessary
competence is an important factor.

2.4.5. Guidance for auditees


 When being audited internally
 Volunteer information
 Report deficiencies and difficulties if you know of any - especially those that
concern procedures and interfaces with other departments
 Be honest, open and cooperative
 Ensure that underlying causes are identified, not just symptoms
 Ask the auditor if you’re not sure
 When being externally assessed
 Only answer the questions being asked - name, rank and number!
 Don’t draw attention to problems - but don’t clumsily try to hide them
 Don’t blame others
 Be truthful - once credibility is in doubt . . .
 Prepare in advance - check your documentation, etc.
 If you don’t know, say so - but add that you will find out
 Report any discrepancies found by the auditor to your manager/supervisor

2.5. The key roles of the internal quality audit are:


 is a powerful tool for the company to measure the effectiveness of the quality
management system.
 is a good management tool that can be used to review processes and identify
any weaknesses, risks and areas of improvement.

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 6 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

 is used to assess if a process is working, if things are being done the way they
are supposed to be done. However at the same time it is an excellent way of
measuring the effectiveness of company’s procedures.
 audits are also used to check any previously identified non-conformances or
business changes. A good opportunity to assess how effective the changes have
been done.

2.6. Quality Audit Documentation


Audit documentation does not need to be complicated, normally there are 3 kind of
documents
 The audit plan,
The audit plan is sent to the department being audited a few days prior, it
should include the date of the audit, the planned time, duration, auditors
names, location (if relevant) and the policies and procedures that will be used
during the audit. It should also mention any non-conformances that were found
during last audit.
 The audit notes,
The notes are the auditor's questions that will be asked during the audit. It
should include references to particular policies and procedures and what will be
asked during the audit. The same document should be used to record the
findings and any comments during the audit.
 The audit report.
The audit report is the official document used to report the findings of the audit.
This document should include details of the audit, date, auditors names, policies
and procedures and findings against them. It should include if it passed audit
and any non-conformances or observations found. If non-conformance are
found a date should be established for completion of corrective actions. The
audit report is normally signed by the auditor and the department manager.

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 7 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

3. MANAGING THE INTERNAL AUDIT PROGRAM

3.1. Process flow for the management of internal audit program

Authority for the audit


programme

Establishing
the internal audit program
obectives
responsibilitties Plan
resources
procedure and guidance

Implementing internal audit program competence and


scheduling audits evaluation of
evaluating auditors auditors Do
selecting audit team
Improving the audit directing audit activiries
Act Audit activities
programme maintaining records

Monitoring & reviewing


the internal audit program
monitoring & reviewing
Check
identifying needs for corrective
identifying needs for prevention actions
identifying opportunities for improvement

Figure 1.
Illustration of the process flow for internal audit

3.2. Authority for the internal audit program


The Good Manufacture Practice require an organization to:
 have an established internal audit program and conduct regularly
 document the results of internal audit
 ensure those responsible for the area audited are made aware of the results

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 8 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

 schedule internal audits on the basis of the status and importance of the
activity/area being audited
 conduct follow-up audit activities to verify and record the implementation and
effectiveness of any corrective action taken

3.3. Establishing the internal audit program

3.3.1. Objectives of an internal auditing program


Objectives should be established for an internal audit program, to direct the
planning and conduct the audits. These objectives can be based on consideration
of:
 to meet requirements for GMP certification or other management system
standard
 to verify conformance with contractual requirements
 to obtain and maintain confidence in the capability of a supplier
 to contribute to the improvement of the management system

3.3.2. Responsibility of internal audit program


 The responsibility for managing an internal audit program should be assigned to
one or more individuals with a general understanding of audit principles, of the
competence of auditors and the application of audit techniques. They should
have management skills as well as technical and business understanding
relevant to the activities to be audited.
 Those assigned the responsibility for managing the internal audit program
should:
 establish the objectives of the audit program
 establish the responsibilities and procedures, and ensure resources are
provided
 ensure the implementation of the internal audit program
 ensure that appropriate audit program records are maintained, and
 monitor, review and improve the internal audit program.

3.3.3. Audit program resources


 When identifying resources for the audit program, consideration should be given
to the following:

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 9 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

 Financial resources necessary to develop, implement, manage and improve


audit activities
 Audit techniques
 Processes to achieve and maintain the competence of auditors, and to
imptove auditor performance
 The availability of auditor and technical expert having competence
appropriate to the particular audit program objectives
 Time availability for auditing activities if done by internal group.

3.3.4. Procedure and guidance of audit program


 Audit program procedure should address the following:
 Planning and scheduling audit
 Assuring the competence of auditors and audit team leader
 Selecting appropriate audit team and assigning their roles and
responsibilities
 Conducting audit
 Conducting audit follow-up, if applicable
 Maintaining audit program records
 Monitoring the performance and effectiveness of the audit program
 Reporting to top management on the overall achievements of the internal
audit program
 Audit guidance:
 auditing should be seen as a positive process not as a fault finding exercise.
 audits need to be documented, it is important to remember that you are
auditing against the Quality Management System and therefore audits should
be constructed against policy and procedures, which have been developed by
the company.
 prior to the audit date, auditor reviews the appropriate quality system
documentation, records of completed corrective and preventive actions, and
past audit findings for the activities to be audited, and then develops a
checklist covering the quality system elements and activities to be audited.
 during an audit you need to see evidence that the processes are being done
in accordance to the procedures and policies. Evidence should be recorded
against each section being audited. Recording of evidence needs to have a
description of the documentation sighted, number, date and any other
information that will assist in identifying that document.

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 10 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

3.4. Audit program implementation

3.4.1. Scheduling audit


 Audits should be planned on a regular basis so that each activity is audited at
least once in the audit cycle. High risk areas should be audited more often to
ensure conformance.
 Special circumstances or unplanned audit can also be carried out as a result of :
 a particular problem has arisen (such as product recalls, repeated quality
rejection), to establish the source of the problem and document any
corrective actions.
 customer complaints
 following the implementation of actions defined in a corrective action report
 following the identification of additional or amended procedures for maintain
or improve product quality
 GMP inspections announced by the Regulatory Authority
 Around 2 – 4 weeks prior to the audit schedule, the audit team will have a
briefing meeting to determine:
 audit procedures, such as the sampling and tracking methods to be used;
 the issues to be followed up;
 preparing the audit plan and visit program
 additional/follow up documents required; and
 the individuals/groups to meet during the visit.
 Result of the above briefing will be informed to the relevant auditees, Quality
Control Manager, and Production Manager, so they can prepare before the audit
schedule will be carried out.
 The length of the internal audit will depend on the issues identified by the Audit
Team and should be approved by management.

3.4.2. Audit program implementation


The implementation of an internal audit program should address the following :
 communicating of an internal audit program to relevant party
 coordinating and scheduling audit and other activities relevant to audit program
 establishing and maintaining a process for the evaluation of the auditors and
their continual professional development
 ensuring the selection of audit team

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 11 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

 providing necessary resources to the audit team


 ensuring the conduct of audit according to the audit program
 ensuring the control of records of the audit activities
 ensuring review and approval of audit report, and ensuring their distribution to
the auditees
 ensuring audit follow-up, if applicable.

3.4.3. Internal audit program’s record


Records of internal audit should be maintained to demonstrate the implementation
of the internal audit program, and should included the following :
 records related to individual audits, such as
 audit plan
 audit report
 nonconformity report
 corrective and preventive action report, and
 audit follow-up, if applicable.
 results of audit program review
 records related to audit personal covering subjects such as
 auditor competence and performance evaluation
 audit team selection, and
 maintenance and improvement of competence
 records should be retained and suitably safeguarded

3.5. Monitoring and reviewing the audit program


The implementation of the audit program should be monitored and, at appropriate
intervals, reviewed to assess whether its objectives have been met and to identify
opportunities for improvement. The results should be reported to top management.

3.5.1. Monitoring the audit program


Performance indicators should be used to minitor characteristics such as :
 The ability of the audit teams to implement the audit plan
 Conformity with audit program and schedules, and
 Feedback from auditees and auditors

3.5.2. Reviewing the audit program


 The audit program review should consider, for examples:

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 12 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
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 Result and trends from monitoring


 Conformity with procedures
 Evolving needs and expectation of interest parties
 Audit program records
 Alternative or new auditing practices, and
 Consistency in performance between audit teams in similar situations
 Results of audit program reviews can lead to corrective and preventive actions
and the improvement of the audit program

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 13 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

4. AUDITING ACTIVITIES

Initiating the internal audit


- appointing the audit team leader
- defining audit objective, scope and creteria
- determining the feasibility of the audit
- selecting the auditthe audit team
- establishing intial contact with auditee

Conducting document review


- reviewing relevant documents, including records.
- determining their adequacy with respect to audit

Preparing for the on-the audit activities


- preparing the audit plant
- assigning work to the audit team
- preparing work document

Conducting on-site audit activities


- conducting opening meeting
- communication during the audit
- roles and responsibilities of guides and observers
- collecting and verifying information
- generating audit findings
- preparing audit conclusion
- conducting closing meeting

Preparing audit report


- collecting all audit finding
- preparing the audit report
- approving and distributing the audit report

Conducting audit follow-up

Figure 2
Overview of audit activities

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 14 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme

4.1. Initiating the audit

4.1.1. Appointing the internal audit team:


 The management of cosmetic company should appoint the audit team leader
for the specific audit.
 When the internal audit has been declared feasible, an audit team should be
selected, taking into account the competence needed to achieve the objective
of the audit.
 The company do not need to employ specific auditors, it is always best to
choose a team of auditors from within the company.
 The audit team should comprise people from all areas and levels of the
company. By choosing a broad spectrum of auditors from all levels of the
organisation, it will ensure that everyone has commitment to the Quality
System and gain a better understanding of the overall management process of
the company. It is a good way for people from various areas to gain an
understanding on how their department fits into the organization.
 Auditor training is always recommended, and a formal auditing method will
assist in keeping the audits uniform.
 It is a pre-requisite that an auditor cannot audit a department or process that
they are involved in, for obvious reasons. It is also best not to use top
management as auditors, this way an audit will not be perceived as a personal
evaluation or appraisal.
 Those assigned the responsibility for conducting the internal audit program
should appoint the audit team leader for specific audit.
 When the company can not do by themselves, internal audit can be performed
by external party.

4.1.2. Defining audit objectives, scope and criteria


 Preparing for an internal audit involves developing of audit plan, identifying
what to be examined and communicating with the auditee. The preparation
phase is time consuming but the time spent on auditing later will be more
productive. In ensures auditing is carried out in a planned and structured way.
 Within then overall objectives of an audit program, an individual audit should
be based on documented objectives, scope and criteria
 The audit objectives define what is to be accomplished by the audit and may
include the following :

EUROPEAN COMMITTEE FOR STANDARDISATION - Implementing Agency for the Contract No ASIA/2003/069-236
ASEAN SECRETARIAT - Jl. Sisingamangaraja No. 70 A - 12110 Jakarta Selatan Tel: +62.21. 726 2991 Fax: +62.21. 739 8234
ASEAN COSMETIC GMP
Training Manual Module 9
INTERNAL AUDIT
Project co-financed Project co-financed
Prepared by Lam Kok Seng - Singapore by Asean
by European Union

Date: 15 Nov 2005 EC-ASEAN Economic Cooperation Programme Page 15 of 28


Rev. : 00 on Standards, Quality and Conformity Assessment
Cosmetic Sub-Programme


Determination of the extent of conformity of the implementation of Good
Manufacturing Practices, or part of it
 Evaluation of the capability of the management system to ensure
compliance with GMP requirements
 Evaluation of the effectiveness of the management system in meeting its
specific objectives
 Identification of areas for potential improvement.
 The audit scope describes the extent and boundaries of the audit, such as
physical locations, organization units, activities and processes to be audited, as
well as the time period covered by the audit
 The audit criteria are used as a reference against which conformity is
determined and may include applicable policies, procedures, laws and
regulations, management system requirement, or contractual agreement with
suppliers.

4.1.3. Selecting the audit team


 The audit team comprises of a lead auditor with a few members. The lead
auditor draft up the audit plan and schedule. On the other hand, the team
members assist in the preparation of audit documents (eg. checklists) and
conduct the audits.
 Auditor competency :
Confidence and reliance in the audit process depends on the competence of
those conducting the audit. This competence is based on the demonstration of
the personal attributes and the ability to apply the knowledge and skill during
the auditing process.
 Personal attributes
Auditor should possess personal attributes to enable them to act in accordance
with the principles of auditing. An auditor should be :
 ethical, i.e. fair, truthful, sincere, honest and discreet;
 open minded, i.e. willing to consider alternative ideas or points of view;
 diplomatic, i.e. tactful in dealing with people;
 observant, i.e. actively aware of physical surrounding and activities
 perceptive, i.e. instinctively aware of and able to understand situation
 versatile, i.e. adjusts readily to different situation
 tenacious, i.e. persistent, focused on achieving objectives

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decisive, i.e. reaches timely conclusions based on logical reasoning and
analysis; and
 self-reliant, i.e. acts and funchtions independently whi;e interacting
effectively with others.
 Has knowledge and skills of GMP and QMS
 Has generic knowledge and skills of Good Manufacturing Practices and
quality management system
 Audit principles, procedures and techniques to enable the auditor to apply
those appropriate to different audits and ensure that audits are conducted
in a consistent and systematic manner.
 Management system and reference documents to enable the auditor to
comprehend the scope of audit and apply audit criteris.
 Organizational situations to enable the auditor to comprehend the
organization’s operational context.
 Auditor will :
 record, in the Audit Report, the people, program/course/area and
documents they interviewed or examined.
 note, in the Audit Report, any people, program/course/area or documents
they were unable to interview or examine.
 always review the previous audit report prior to conducting an audit to help
in determining the strategy for the coming audit.

4.2. Conducting document review


 Prior to the on-site activities, the auditee’s documentation should be reviewed
to determine the conformity of the system. The documentation may include
relevant management system documents and records, and previous audit
reports.
 Review documents (SOPs, audit findings, corrective action/preventive action,
etc.), check the integrity of the quality system and various controls are
effective.
 If the documentation is found to be inadequate, the audit team leader should
inform the auditee, those assigned responsibility for managing the audit
program, and the auditee. A decision should be made as to whether the audit
should be continued or suspended until documentation concerns are resolved.

4.3. Preparing for the on-site audit activities

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4.3.1. Preparing the audit plan


 The audit team leader should prepare an audit plan to provide the basis for the
agreement among the auditees and audit team regarding the conduct of the
audit. The plan should facilitate scheduling and coordinating of the internal
audit activities.
 The amount of detail provided in the audit plan should reflect the scope and
complexity of the audit and should be sufficiently flexible to permit changes,
such as changes in the audit scope, which can become necessary as the on-
site audit activities progress.
 The audit plan may cover the following:
 the audit objectives, criteria and any reference documents
 the audit scope, including identification of the organizational and functional
unit and processes to be audit
 the dates and places where the on-site audit activities are to be conducted
 the expected time and duration of on-site audit activities
 the role and responsibilities of the audit team members and accompanying
persons
 the allocation of appropriate resources to critical areas of the audit
 any audit follow-up actions

4.3.2. Assigning work to the audit team


 The audit team leader, with the agreement and consultation the audit team,
should assign to each team member responsibility for auditing specific
procedures, processes, functions, sites, areas or activities.
 Such assignment should take into account the need for independence and
competence of auditors and the effective use of resources, as wwll as different
roles and responsibilities of auditors, and if needed the technical experts.
 Changes to the work assignments may be made as the audit progresses to
ensure the achievement of the audit objectives

4.3.3. Preparing work documents


 The audit team members should review the information relevant to their audit
assignments and prepare work documents as necessary for reference and for
recording audit proceedings. Such work documents may include :
 audit checklists and audit sampling plans, and

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forms for recording information, such as supporting evidence, audit finding


and records of meetings.
 The use of checklists and forms should not restrict the extent of audit
activities,which can change as a result of information collected during the audit
 Work documents, including records resulting from their use, should be retained
at least until audit completion. Document which is confidential or proprietary
information should be suitably safeguarded at all times by the audit team
members.

4.3.4. Detail of an audit checklist


 It identifies what is to be examined during an audit and define desired level of
performance (Refer to Figure 3).

CHECKING LIST FOR GMP ASSESSMENT


Date : Location : Warehouse
Auditor : Auditee :

DESCRIPTION GMP.REF. PARAMETER AUDIT FINDING


Personnel 1.2.1 - Organization structure
5.1.2 - Personnel hygiene
2.1.5 - Training record
Storage area 10.1.1 - Design and layout of defined area
3.1 - Flow of personnel and goods
3.6 - Structure of the storage area, based
3.9 & 3.10 on GMP
3.12.2 - HVAC system
- Record of monitoring parameter
Sanitation 3.1 - Pest record program
- The map of bait
5.3 - The cleanliness of weighing
apparatus
Documentation 4.3 - Record of maintenance and
calibration of weighing apparatus
10.2.2.3 - The effectiveness of label system
10.2.2.1 - Inventory stock control
Figure 3
General format of an audit checklist

 Standardise audits and ensure consistent data collected over time.


 It is designed based on:
 GMP regulations or guide

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 Company policy and management expectations


 SOPs
 Audit findings
 Warning letters from the authority (FDA 483) of other inspections
 Best of industry practices
 It can be in the form of questionnaires with open-ended questions and no
“built-in” requirements (Refer to Figure 4).

GMP Cosmetic Audit Questionnaire


Area audited : Date:
Question (QSR-GMP Reference) Response
1. Does the company have a quality policy ?
2. How is the quality policy communicated?
3. To whom is the quality policy communicated?
4. Is there a current organization chart available?
5. How does the quality unit related organizationally
and functionally to other parts of the company?

Figure 4
An example of a questionnaire with open ended questions

4.4. Conducting on-site audit activities

4.4.1. Conducting the opening meeting


 An opening meeting should be held with the auditee’s management or, where
appropriate, those responsible for the functions or processes to be audited.
 The purpose of an opening meeting is :
 to confirm the audit plan
 to provide a short summary of how the audit activities will be undertaken
 to confirm communication channels, and
 to provide an opportunity for the auditee to ask questions.

4.4.2. Communication during the audit

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 Depending upon the scope and complexity of the audit, it can be necessary to
make formal arrangements for communication within the audit team and with
the auditee during the audit.
 The audit team should confer periodically to exchange information, assess
audit progress, and reassign work between the audit team members as
needed.
 Evidence collected during audit that suggests an immediate and significant risk
(e.g. safety or product quality) should be reported without delay to the
auditee, and as appropriate to the respective Manager.

4.4.3. Roles and responsibilities of guides and observers


 Guides and observers may accompany the audit team but are not a part of it.
They should not influence or interfere with the conduct of the audit
 When guides are appointed by the auditee, they should assist the audit team
and act on the request of the audit team.

4.4.4. Steps in conducting on site audit


 The auditor will contact the personnel in the area being audited at the time
indicated on the audit program, and briefly review the audit criteria, scope,
methods and objectives with them.
 The checklists only serve as a guide to the auditors, and other areas may be
investigated as deemed necessary by the auditors or as requested by the
auditee.
 Carry out both horizontal and vertical audits, and focus on the aspects related
to safety, identity, strength, purity and quality of the product.
 Check with the different personnel-in-charge.
 Use “Trace-back” method:
 Identify a lot number from the product previously made and request for
batch record.
 Determine the raw materials and components (eg. facilities, equipment)
use; testing or acceptance records, any deviations recorded.
 Find out the personnel involved on the producing, testing and approving
the product; examine their training records and qualifications
 Find out whether there is any product complaint or returned product or out-
of-specification (OOS)

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 Examine how investigation was conducted; how deviation was resolved


before release of product
 Some tips in making an inspection
 If the surface is dusty, make a mark in the dust with your finger and return
later to see whether it has been cleaned.
 Look for things in the wastepaper baskets or things lying on the floor.
 Examine how the records are continuously being monitored.
 Observe how the personnel clean their hands.
 Look for any traces of pests (even ants!).
 When a nonconformance is identified, the auditor presents the nature of the
nonconformity and the evidence to the personnel involved for verification,
clarification, and addresses any questions or concerns that the personnel may
have, as well as to give advice, when requested, regarding any problems which
are uncovered.
 After the facts of the nonconformity are verified (or modified), the auditor
either drafts nonconformance statement or documents the necessary
information.
 The nonconformance statement includes :
 the nature of the nonconformity
 the factual evidence obtained, and
 the nature of the requirement that is not being complied with (i.e., the
appropriate GMP clause, the appropriate quality system document section/
page/paragraph, what the personnel says is the normal practice, contract
requirements, statutory regulations, current standards, and any other
relevant requirements).
 If the possible nonconformance requires further clarification the auditor will
discuss the situation with the responsible person in charge.

4.4.5. Collecting and verifying audit information


 During the audit, information relevant to the audit objectives, scope and
criteria, including information relating to interfaces between functions, activities
and processes, should be collected by appropriate sampling and should be
verified. Only information that is verifiable may be audit evidence. Audit
evidence should be recorded.

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 The audit evidence is based on samples of the available information. Therefore


there is an element of uncertainty in auditing, and those acting upon the audit
conclusions should be aware of this uncertainty.

Sources of information

Collecting by appropriate sampling


and verifying

Audit evidence

Evaluating against audit creteria

Audit findings

Reviewing

Audit conclusions

Figure 5.
Overview of the process from collecting information
to reaching audit conclusion

 Methods to collect information include :


 interview,
 observation of activities, and
 review documents

4.4.6. Generating audit finding


 Audit evidences should be evaluated against the audit criteria to generate the
audit findings. Audit findings can indicate either conformity or nonconformity

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with audit criteria. When specified by the audit objectives, audit findings can
identify an opportunity for improvement.
 The audit team should meet as needed to review the audit findings at
appropriate stages during the audit.
 Conformity with audit criteria should be summarized to indicate locations,
functions or processes that were audited. If included in the audit plan,
individual audit findings of conformity and their supporting evidence should
also be recorded.
 Nonconformities and their supporting audit evidence should be recorded.
Nonconformities may be graded. They should be reviewed with the auditee to
obtain acknowledgement that the audit evidence is accurate, and that the
nonconformities are understood. Every attempt should be made to resolve any
diverging opinions concerning the audit evidence and/or finding, and
unresolved points should be recorded.
 Sort out isolated and systemic deficiencies (See Figure 6).
 Isolated deficiency
Tends to happen randomly; no meaningful pattern; or rarely happens.
 Systemic deficiency
Could be connected to a particular process, product, material, person or
organisation; shows pattern; happens more than once

NON CONFORMITY EVIDENCE


ISOLATED SYSTEMIC
Latex gloves rip SOP contains an error
Wrong expiration date written on a Batch record is poorly written so
reagent bottle instruction can be confusing
Operator or lab technician spills a Area management does not reinforce
sample requirement to continually record
information properly
Pressing machine of eye shadow burns Preventive maintenance program does not
out include liquid filling machine motor
Figure 6.
Isolated versus systemic deficiencies

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 Determine the impact of the deficiency affecting the quality, safety, strength,
identity and purity of the product and whether the consumer is at risk. Need to
make recommendations for improvement.
 Before an observation is made, it is necessary to verify against the documents
or people. Always share your findings with the auditee so that it builds trust
and give them opportunity to respond as well as correct the problem. If an
issue is corrected during the audit, the auditors have to ensure that it is done
correctly and appropriate preventive measures are taken to avoid recurrence of
similar problems.
 Audit findings need to be documented and any non-conformances found
should be reported for further action.
 A date should be established for the correction, a follow up audit should be
carried out to ensure that the non-conformance has been fixed.

4.4.7. Preparing audit conclusion


 The audit team should confer prior to the closing meeting :
 To review the audit finding and any other appropriate information collecting
during the audit, against the audit objectives
 To agree on the audit conclusions, atking into account the uncertainty
inherent in the audit process
 To prepare recommendations, if specified by the audit objectives, and
 To discuss audit follow up, if included in the audit plan.
 Audit conclusions can address issues such as:
 The extent of conformity of GMP implementation with the audit criteria
 The effective implementation, maintenance and improvement of the GMP
implementation, and
 The capability of the management review process to ensure the continuing
suitability, adequacy, effectiveness, and improvement of the GMP
 Define expectations and rating system (Critical/Major/Minor Deficiency, and
Satisfactory or Outstanding)
The inspectors from US FDA classify their findings (FDA Form 483) into
compliance or non-compliance. It is possible to further categorise into five
groups:

 Critical deficiency
 Major deficiency Non-compliance

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 Minor deficiency
 Satisfactory / adequate Compliance
 Outstanding

 Detail explanation of these 5 categories:


 Critical deficiency:
Deficiency that seriously violates the safety, identity, and quality of the
product, resulting in a product recall, regulatory action or harm to
consumer, such as mislabelling; microbial contamination, etc.
 Major deficiency:
Deficiency that can have an impact on the safety and quality of the
products. eg. non validated cleaning procedure; undocumented preparation
of laboratory reagents; reduced QC testing of raw materials etc.
 Minor deficiency:
Deficiency that is not likely to affect the safety and quality of the product,
but does not meet the GMP expectations. eg. record keeping errors;
overdue SOP reviews; equipment is not calibrated by due date; use of
white-out correction liquid on documents etc.
 Satisfactory / adequate:
The GMP requirements are met.
 Outstanding:
The GMP requirements have been met more than required and excellence is
displayed.

4.4.7. Conducting the closing meeting


 A closing meeting, chaired by the audit team leader, should be held to present
the audit findings and conclusions in such manner that they are understood
and acknowledged by the auditee, and to agree, if appropriate, on the
timeframe for the auditee to present a corrective and preventive action plan.
 Participants in the closing meeting should include the auditee, and may also
the audit client and other parties. If necessary, the audit team leader should
advise the auditee of situations encountered during the audit that may
decrease the reliance that can be placed on the audit conclusions.
 In many instances, for example internal audit in a small organization, the
closing meeting may consist of just communicating the audit findings and

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conclusions. While for other audit situation, the meeting should be formal and
minutes, including records of attendance, should be kept.
 Any diverging opinion regarding the audit findings and/or conclusions between
the audit team and the auditee should be discussed and if possible resolved. If
not resolved, all opinions should be recorded.
 If specified by the audit objectives, recommendations for improvements should
be presented. It should be emphasized that recommendations are not binding.

4.5. Preparing, approving and distributing the audit report

4.5.1. Preparing audit report


 The audit team leader should be responsible for the preparation and the
contents of the audit report. The report should provide a complete, accurate,
concise and clear record of the audit and should include or refer to the
following:
 The audit objectives
 The audit scope, particularly identification of the organizational and
functional units or processes audited and the time period covered.
 Identification of the audit clients, audit team leader and the members.
 The date and places where the on-site audit activities were conducted
 The audit criteria and its findings
 The audit conclusions
 The audit report performance
 Various formats can be used depending on the auditee (vendors,
management or auditee) (Refer to Figure 7).
 Usually include the name and location of the auditee, date of audit, audit
plan, audit observations, classification of non-compliances, recommendation
or expectations. The report should write against a standard. It should focus
on deficient conditions and not people. Include any positive observations.
 Keep the audit report simple, clear and straight to the point.

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INTERNAL AUDIT REPORT


10 – 15 August 2004

No GMP. Finding IQA F/O Location Auditee Auditor


Ref.
1. 2.1.1 Production and QC sections F Head office Abas Budi
are headed by the same
person
2. 4.3 Consideration should be O Liquid Tuti May Lin
given to define in system production
more clearly regarding
thermometer used in the
liquid mixer
3 11 The quality system does F Supply Herman Ida
not consistently ensure chain
that control over sub-
contractor is adequately
identified in the system.

Figure 7.
Various types of audit reports

4.5.2. Approving and distributing the audit report


 The audit report should be dated, reviewed aand approved in accordance with
the audit program and issued within the agreed time period.
 The approved audit report should then be distributed to recipients designated
by the audit client. This report is the property of the audit client. The audit
team members and all recipients should respect and maintain the
confidentiality of the report

4.6 Follow-up and closing up the loop:


 The conclusion of the audit may indicate the need for corrective, preventive or
improvement actions, as applicable. Such actions are ussualy decided and
undertaken by the auditee within an agreed timeframe and are not considered
to be part of the audit.
 Receive a satisfactory response from auditee and their commitment to correct
for any deficiency (Refer to Figure 5).
 Confirm CAPA are satisfactory, accomplished and documented.
 Verify and track for CAPA by scheduling a follow-up audit and/or requesting for
an updated SOP. Ensures that the CAPA are completed and effective.

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Item Audit observation Our response


1 The current version of SOPs is The department had not
not consistently available in designated someone to
the packaging department maintain the SOP binders as
other departments had. A
clerk has now been assigned
to this task, the task has
been added to the job
description

Figure 8.
Example of audit responses

5. Conclusions

Nobody likes to be audited. It is a means to have continuous improvement. This is


especially when it involves giving your company the license to manufacture or
shutdown. But, if a person is prepared and a functional quality system is in place,
one can see it as a way for continuous improvement.

6. References
a. ASEAN Guidelines for Cosmetic GMP.
b. International standard ISO 19011:2002 (E), Guidelines for quality and/or
environmental management system auditing, 1st Edition, 2002
c. www.cityu.edu.hk., Internal Quality Audit Scheme.
d. www.fineprint.com, Internal Audit Procedure
e. Stimson W.A., Internal Quality Auditing, Meeting the challenge of ISO
9000:2000, Paton Press, 2001
f. WHO – EDM, Basic Principle of GMP: Self-Inspection.

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