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IJQRM
19,1
24
Received January 2001
Revised June 2001
International Journal of Quality &
Reliability Management,
Vol. 19 No. 1, 2002, pp. 24-45.
# MCB UP Limited, 0265-671X
DOI 10.1108/02656710210413435
http://www.emeraldinsight.com/0265-671X.htm
Self-audit of process
performance
Stanislav Karapetrovic
Department of Mechanical Engineering, University of Alberta,
Edmonton, Alberta, Canada, and
Walter Willborn
Faculty of Management, University of Manitoba, Winnipeg,
Manitoba, Canada
Keywords Audit, Self-assessment, Performance measurement, Quality management
Abstract Quality audit, as a methodology for evaluating system, product and/or process
performance against established requirements, has experienced substantial growth in worldwide
use in recent years. This is largely due to the steady increase in ISO 9000 registrations, which
topped 350,000 in the year 2000. Based on the fundamental principles of independence,
objectivity and professionalism, the audit is an irreplaceable tool when confirmation of compliance
with standards is sought. However, it commonly fails in enabling continuous improvement and
spanning the differing aspects of business performance beyond conventional ``quality assurance''.
This paper argues for removing one of the principles of traditional auditing, namely
independence, to empower the process owner to conduct periodic self-evaluations of process
performance. Such ``self-audits'' would be less formal than quality audits, and, much like the
better-known self-assessments against business excellence models, aimed at continuous quality
improvement. The concept, principles and practices of a self-audit are focused on.
Introduction
In our information-driven society, the planning, controlling, and improving of
quality becomes more complex and demanding. Modern technology at the
workplace, new global and local competition, strong pressures for value-added
processes and performances, and integrated management decision-making are
main factors for these changes. The meaning of ``quality'' has expanded beyond
``customer satisfaction with products and services'' to the ``creation of worth for
all stakeholders''. Overall business excellence is replacing the narrow objective
of meeting customer specifications; the performance of the whole system, and
not just its outputs, is focused on; and an array of issues, including
environment, occupational health and safety, social responsibility, corporate
finances, and human resources, must be incorporated into the management of
``quality''. The new ISO 9000: 2000 standards for quality management systems
reflect some of these advancements and higher demands. For example, instead
of the sole emphasis being on the customer needs and expectations, all
stakeholders are now concerned, including customers, suppliers, managers,
employees, local community and society, in general. Such developments
continue to challenge quality practitioners to ``master additional, modern, total
quality management approaches and integrate them into management
methods'' (Andersen, 2000). In the words of Chong (2000), only those
professionals ``who understand that quality is derived from effectively
managing systems will (be able to) provide leadership in the new millennium''. Self-audit of
In this paper, we consider the impact that the expanding role of quality has on process
the quality audit, specifically addressing the possibility to use a self-audit for performance
control and improvement of process performance.
Much like all quality professionals, quality auditors will have to adapt to
new conditions and demands with higher qualifications and competence. The
new ISO 19011 standard for auditing of quality and environmental 25
management systems will stipulate such requirements. However, can the
effectiveness and efficiency of the quality audit be substantially improved by
simply imposing a standard and expanding it into environmental
management? Performance of auditors has come under considerable criticism
with regard to the actual value-added for clients and business in general (for
example, see Beeler, 1999 and Stamatis, 2000). Self-assessments against
business excellence models are widely considered to be more advantageous in
that respect (van der Wiele et al., 2000). On the other hand, the inability to
continuously ensure product quality still plagues the image of the ISO 9000
standards, and consequently, quality audits. In a highly publicized recent case
of sport-utility vehicle tire recall, a quality system registrar has been
apparently implicated by the tire manufacturer's top management for the
failure to identify the problem (Zuckerman, 2000). Even if such accusations are
dismissed as ``mud-slinging'' and ``blame-shifting'', and even if they are
explained by the misunderstanding of the main audit purpose (that is to verify
compliance with the appropriate standard, and not to inspect product quality),
the concerns about the audit effectiveness and its shortcomings in fostering
continuous improvement will still loom. Referring to the tire recall incident, and
supporting his doubts that a quality audit could have prevented it, Arter (2000)
states that ``auditors don't go around looking for field failures, (and) often don't
even have access to the data''. This is true, but the question is why? Is it
perhaps because they are not empowered to do so, since they are an entity
independent of the function being audited? Would it have helped if the process
owners, that is the auditees, had performed the audit themselves?
In an audit, the auditor and the auditee must cooperate in order to arrive at a
correct and reliable conclusion. The auditee is normally more familiar with the
actual process than the auditor. The auditor, on the other hand, is more
knowledgeable about the audit criteria, such as a quality management system
standard. Therefore, each party contributes to the expected value-added
component of an audit: the auditor does so by providing an independent and
objective assessment of the process strengths and weaknesses, and the auditee
by knowing how best to capitalize on the strengths and to eliminate the
weaknesses, in other words to improve the process in the most effective and
efficient way. However, in order to alleviate the problem of the external
imposition of judgment and the consequent lack of auditee motivation to
follow-up on it, innovative and strengthened approaches to auditing are
required. One such approach may involve the empowerment of the auditee to
conduct an evaluation of his/her own performance, effectively conducting a
IJQRM self-audit. Tiemeyer (1997), for example, suggests a method of individual
19,1 assessment in order to ``encourage initiative and a sense of co-responsibility in
the achievement of total quality'', in which ``the auditor takes on the role of staff
trainer and controller of the self-evaluation process''. Goldstein (1983) presents
a ``two-tiered'' combination of a self-audit and an external audit to alleviate the
problem of ``relying on outsiders to identify non-conformances'', while Pasco
26 and Brown (1989) illustrate a distributed self-audit system at corporate, plant
and station levels.
This paper argues for the ``owner'' of a process to conduct a periodic audit of
the process performance. As we will show, a ``self-audit'' is not the traditional
product quality inspection, ``self-inspection'', nor just another form of internal
auditing. It is not designed to add a new undesirable form of process
verification. On the contrary, a self-audit, if properly designed and
implemented, should actually reduce the current inspections and formal
internal audits. The following sections discuss this concept in detail. We begin
by analyzing the definitions, reasons for introduction and applications of a self-
audit, as well as its relationships with other evaluation methodologies, followed
by an outline of the fundamental principles for self-audits. Subsequently, the
process of conducting a self-audit is addressed, and the qualifications of
participants are illustrated. A hypothetical example of performing a self-audit
is provided, and the paper is concluded by a discussion of future implications
and directions for further research.

Concept
What is a ``self-audit''?
Basically, evaluation of one's work is as old as work itself. By virtue of being a
goal-oriented activity, actual work and its achieved results (also called
``performance'') are always compared with the planned objectives. A typical
evaluation includes the measurement of effectiveness (``extent to which planned
activities are realized and planned results achieved'' (ISO 9000, 2000)) and
efficiency [``relationship between the result achieved and the resources used''
(ISO 9000, 2000)] of the work process, and subsequent comparison of process
performance with the expected goals. When such goals are presented in the
form of a documented standard, policy, model or procedure, the evaluation is
referred to as ``audit'' or ``assessment'' against ``criteria'' (for example, the ISO
9001 standard and quality awards). The process owner, in other words, the
person or unit performing the work itself, undertakes self-evaluations. These
evaluations may be done using formal, standardized procedures (internal audit)
or informal guidelines (self-assessment and benchmarking). They can also be
conducted on an individual basis, or may involve a whole department or
organization. For example, every conscientious worker checks his/her work
(``Do I continuously achieve what is expected in the proper way? Can I make
improvements? What can I learn from the best people doing the same job?''),
much like entire organizations evaluate their business performance against
standards, excellence models and best-in-class companies. In today's
competitive work environment with higher demands and pressures, linking Self-audit of
individual with organizational evaluation is of paramount importance. We process
believe that the ``self-audit'' concept may provide a way to meet these demands. performance
Although it does not represent a completely new idea or methodology (for
example, see Goldstein (1983), Pasco and Brown (1989), and Arter (1989) for
references in the 1980s, as well as Bishara and Wyrick (1994) and Tamimi et al.
(1995) in the 1990s), a ``self-audit'' is innovative in the manner, objective and 27
scope of its application. It combines the features of the traditional internal
quality audit, self-assessment and benchmarking. The main notion is that the
person or unit in charge of the process (``owner'') conducts the audit, at the
process location. Other people or organizational units directly involved with the
process may participate under the leadership of the owner. The primary
objective of the self-audit is to evaluate and improve performance, by
continuously examining both the performance enablers and achieved results.
Business performance enablers can be grouped into three categories: goals
(including strategy, policy and objectives), resources (people, material,
information and infrastructure) and processes (including leadership and
realization of the outputs). These enablers are assessed for their suitability to
achieve set performance levels (effectiveness), and the ability to achieve them
with minimum effort (efficiency). The results, which may include the ones
related to employees, the customer, society and key financial and non-financial
outputs (EFQM, 1999a), are measured and compared with target levels.
Naturally, performance levels are also periodically examined for purpose and
feasibility. Because self-audit includes the measurement and comparison of
actual versus desired levels of performance, it may be represented as a system
with a negative feedback loop (Figure 1).
The self-audit can be conducted at different hierarchical levels (Pasco and
Brown, 1989). At the bottom level, an individual worker compares his/her
performance with set standards (e.g. a job description), identified strengths,
weaknesses, opportunities and threats (SWOT), and the work of best-in-class
people. At the top level, whole organizations, which use ISO 9000 standards,
quality awards and benchmarks for reference, perform self-audits of their
business performance. Such audits must be coordinated in both vertical
directions (Figure 2), so that individual self-audit results are utilized at the unit
level, as well as in organizational audits. Conversely, audit criteria must be
communicated throughout the organization and interlinked, so that each
person is aware of how his/her individual audit criteria correspond to
departmental or company level ones.
Traditional quality audits are never ``self'', but rather independent of ``self'',
because they are, by definition, performed by somebody who must be
``unbiased and independent from the function or subject matter being audited''
(ANSI/ASQC, 1986). However, despite the oxymoron-sounding name, a self-
audit may be defined as a system for obtaining and verifying audit evidence,
objectively examining the evidence against audit criteria, and incorporating the
audit findings into business planning, for the purpose of continuous
IJQRM
19,1

28

Figure 1.
Self-audit concept

improvement. We discuss some of the reasons for the introduction of self-audits

into practice.

Why do we need a self-audit?

While quality system audits, self-assessments and benchmarking are all used
to evaluate performance against some set of criteria (ISO 9000 standards,
business excellence models (e.g. Malcolm Baldrige National and European
Quality Awards) and state-of-the-art approaches, respectively), each
methodology has its own advantages and shortfalls. For example, a self-
assessment by far outperforms an audit in terms of identifying strengths and
opportunities for continuous improvement, prevention of problems and
incorporation of assessment results into the strategic and operational business
planning. The traditional quality audit is most often externally required,
focuses on the quality assurance function within an organization only, and
 Self-audit of
process
performance

29

Figure 2.
Coordination among
different levels of
self-audit

relies on competent quality professionals for judgments on compliance with

audit criteria. Conversely, self-assessments are cross-functional, less formal,
and almost always intrinsically motivated (van der Wiele et al., 2000). However,
the audit is still superior with respect to objectivity of the evaluation process,
reliability and consistency of results, as well as the identification of systematic
failures. It has an added benefit of providing a fresh, independent, and
unbiased outlook of the audited process. On the other hand, while
benchmarking provides a good understanding of best practices, facilitates fact-
based decision-making and clearly illustrates weaknesses (Dale, 1999), it
essentially amounts to copying somebody else's successful processes to reach
targets of questionable trustworthiness and permeating the loss of potential for
innovation (Besterfield et al., 1999). Therefore, an integrative approach is
required for a solid, systematic, fact-based evaluation of process performance,
aimed at continuous quality improvement.
To enhance intrinsic motivation and the depth of the required organizational
change, which, according to van der Wiele et al. (2000), are the two most
important variables for the sustainable success of a management ``fad'' (e.g. ISO
9000 and BEM), such an integrative approach must inevitably be based on self-
evaluation. Any assessment that is externally-driven or performed by an
outside party is likely to induce fear, perceptions of uncertainty and coercion,
as well as to produce only a short-lived and ineffective effort. Witness what
happened to ISO 9000 quality systems in some companies that were forced by
their customers to implement the standards: the system worked only on paper,
tucked away out of anybody's sight, until the time for the next registrar's visit
IJQRM (Karapetrovic, 1999). In the words of the cartoon character Dilbert, the ISO
19,1 documentation binder is ``treated like a dead raccoon'' (Adams, 1997). In other
words, since total quality management requires a worker to be motivated and
empowered in the workplace, facilitating an assessment of performance by the
worker him/herself is most meaningful and effective. Owing to the need for
objectivity and consistency of judgments, this method should be augmented by
30 a periodic independent evaluation, which is, in effect, an audit (Goldstein, 1983;
Pasco and Brown, 1989). In difference to traditional auditing and self-
assessments, which are both relatively formal and essentially off-line
methodologies, a self-audit would provide immediate or on-line feedback on
performance. Consequently, an approach that combines a quality audit with
self-assessments using benchmarked criteria, and capitalizes on the strengths
of the constituting methodologies, is necessary.

What are the relationships with other evaluation methods?

Since a self-audit is a system evaluation tool, it shares some commonalities, but
also differs in certain respects from other assessment methodologies. While
Table I presents several of such methods and brief comments on their
relationships with the self-audit, we will proceed with a discussion on
performance measurement, benchmarking, self-assessment, internal quality
audit, management review and self-inspection, in particular.
Performance measurement is a methodology that complements the self-
audit, since it focuses on identifying metrics related to business results (e.g.
quality, time, flexibility and cost (Neely et al., 1995)), and on evaluating the
actual performance with reference to developed metrics. An organization
implementing a self-audit should use a performance measurement system,
defined in Neely et al. (1995) as a ``set of metrics used to quantify the
effectiveness and efficiency of actions'', to develop indicators of performance
that are measured and analyzed in the audit process. Desired levels can be
obtained from the benchmarking process. For instance, a machinist can
measure the operation time and the rework rate and compare these indicators
with the levels achieved by the best machinist in the company. Then he/she will
examine the ways in which these rates can be improved, and implement
corrective and preventive actions to attain set levels. Similarly, the machinist's
company could decide to measure product cycle times, prototype introduction
times, as well as the defect rates, and compare them with a similar best-in-class
operation. In this sense, self-audits apply performance measurement and
benchmarking to quantify and qualify results, rather than enablers of
performance. Benchmarking may be used to identify the latter, as well.
On the other hand, the techniques of self-assessment and internal quality
audit, applied for evaluation against the requirements of BEM and ISO 9000
standards, respectively, may be used to focus on the existence, suitability and
adequacy of performance enablers. Table II illustrates some differences with
respect to internal, external and self-audits, as well as self-assessments. For
example, a machinist ensures that adequate ISO 9001 quality system
Term Definition Source Comment Self-audit of
process
Inspection Conformity evaluation by ISO 9000 Refers to the evaluation of whether a performance
observation and judgment (2000) product or service conforms to
accompanied as specified requirements. Product audit
appropriate by is a broader term, since it involves
measurement, testing or an evaluation of decisions related to
gauging product inspections (Juran and
31
Gryna, 1993), i.e. whether
specifications are suitable and
whether inspection methods are
capable
Self- Inspection of the work by ISO 8402 Involves evaluation of product or
inspection the performer of that (1994) service conformity only. It is a part
work, according to of the self-audit, but only referring
specified rules to the output
Assessment Judgment or decision on Cambridge When assessment is done with
the quality, importance, (2000) reference to a management system
amount or value of standard, a system audit is
something performed. An audit is a special case
of assessment
Self- Comprehensive, EFQM This definition refers to a self-
assessment systematic and regular (1999) assessment where reference criteria
review of an for assessment are contained in a
organization's activities BEM, and the evaluation is
and results referenced performed by an organization itself.
against a business A self-audit would incorporate this
excellence model (BEM) kind of a self-assessment
Quality Systematic examination of ISO 8402 Entity here refers to a product,
evaluation the extent to which an (1994) service, process, project, contract or
entity is capable of a system. A self-audit may include
fulfilling specified the evaluation of compliance of all of
requirements these entities, but is broader because
it involves the examination of
effectiveness and efficiency
Quality Continual monitoring and ISO 8402 Surveillance involves continual
surveillance verification of the status (1994) evaluation of product, service or
of an entity and analysis system conformance to requirements.
of records to ensure that A self-audit is a continual evaluation
specified requirements are of activities and results aimed at
being fulfilled their improvement
Audit Systematic, independent ISO 9000 While the audit defined in this
and documented process (2000) manner is restricted to the
for obtaining audit evaluation of compliance with audit
evidence and evaluating it criteria, a self-audit is not. Also, a
objectively to determine self-audit may not always obey the Table I.
which agreed criteria are independence principle Evaluation terms and
fulfilled methodologies related
(continued) to the self-audit
IJQRM Term Definition Source Comment
19,1
Verification Confirmation, through the ISO 9000 Reflects the confirmation of product
provision of objective (2000) conformance to requirements. A self-
evidence, that specified audit verifies that requirements have
requirements have been been met
fulfilled
32
Validation Confirmation, through the ISO 9000 Reflects a product's fitness for use
provision of objective (2000) and application, or a system's
evidence, that the suitability to achieve objectives. A
requirements for a specific self-audit includes these
intended use or
application have been
fulfilled
Review Activity undertaken to ISO 9000 Self-audit focuses not only on the
determine the suitability, (2000) suitability, adequacy and
adequacy and effectiveness, but also on efficiency.
effectiveness of the The results can be used as an input
subject matter to achieve into management review
Table I. established objectives

procedures are documented and followed, and the existing instructions are
suitable for achieving performance goals. Otherwise, a procedural change is
requested. A self-audit is less formal and independent than an internal audit
that complies with the applicable audit standards (e.g. ISO 10011). As both are
evaluations of processes, they naturally have much in common and need
coordination for proper results. Under certain conditions, such as in a small
business and/or relatively simple processes, internal and self-audits could be
identical. In that case, the auditor and the auditee are the same person.
Naturally, a periodic assessment by an external auditor should be conducted to
verify self-audit results. These results should also be used as an input into the
management review process, which is required by the ISO 9000 standards. In
fact, incorporating the outcomes of the audit process in management review
and business planning is probably the most important feature of self-
assessments that should render the self-audit more useful for continuous
improvement.
Finally, when self-audits are performed at the individual level (Figure 2),
they may be confused with self-inspections. Juran and Gryna (1993) explain the
difference between a self-inspection and a product audit. While the former is
related to the decision on whether the product conforms to specifications or not,
and is performed by the operator him/herself, the latter is conducted by a
person other than the operator and evaluates the appropriateness of inspection
decisions and criteria. In other words, self-inspections are product quality
evaluations, while self-audits are process performance evaluations. Also, while
inspectors cannot make a decision on the corrective action resulted from the
product nonconformance (Juran and Gryna, 1993), self-audits would allow
Criteria External audit Internal audit Self-audit Self-assessment Self-audit of
process
Purpose Quality system Control of Identification of Attaining business performance
registration product, process, process strengths excellence through
or system and weaknesses strengths and
improvement
opportunities
33
Scope Standard By directive of Specified area of By directive of
requirements management (e.g. operational management and
(e.g. ISO 9001) plant/unit) responsibility award guidelines
Applicability Registration Mainly in large In companies of When goal is
procedure multi-unit any size or business excellence
companies industry
Client Applicant, Management Management and Management and
customer or process owner stakeholders
registrar
Auditor Certified Appointed and Authorized and Trained managers
professional trained employee trained process (internal) or team
owner of experts
(external)
Auditee Company Supervisory Process owner, Management and
employees management person in-charge supervisors
Auditing Compliance with Documented and Appropriate Documented,
process criteria published audit authorized evaluation comprehensive
standards (e.g. procedures methods (e.g. evaluation and
ISO 10011) checklists) analysis
Reporting and Formal report Report to and Submittal of Report to
follow-up and follow-up decision by suggested management Table II.
by management management improvement(s) (internal) and Examples of
award committee differences among
(external) several types of audits

qualified ``process owners'' to make such decisions, subject to periodic external

reviews. It is important to note that the advantages of self-inspection, reported
by Juran and Gryna (1993), including the psychological benefit of not having
the outsider judge one's work and job enlargement, would be translated to the
self-audit.

When and where is self-audit applicable?

Every process involves at least one person who should be able to assess the
performance of that process. It does not matter if it is preparing soup in a hotel
kitchen or producing a circuit board for a computer. Therefore, much like the
traditional quality audit, a self-audit is applicable to any organization,
regardless of its size, position in the market, or the type of product or service
delivered. The main idea behind the self-audit is to broaden its scope beyond
quality assurance to other functions and areas in an organization, involving not
IJQRM only quality professionals, but also basically all employees and concerned
19,1 parties. The introduction of self-assessment methodologies should facilitate
such an increase in the scope of implementation. On the other hand, self-audits
for environmental, occupational health and safety, maintenance, ergonomic
and accounting applications may not be far-fetched, either. For further
discussion on the fundamentals of cross-discipline auditing, an interested
34 reader may refer to Karapetrovic and Willborn (2000).

Principles
Any transformation from traditional quality auditing to the proposed self-audit
framework requires a significant shift in responsibility and authority for
process evaluation from the auditor to the process owner. However, an abrupt
allocation of such responsibilities to the process owner, especially in
organizations which have just initiated systematic performance improvement
efforts (e.g. see Dale, 1999), may cause more harm than good. Lack of
knowledge and understanding of the audit criteria, subjective evaluations of
one's own work, and deficiencies in corrective and preventive action follow-up
are but a few examples that may be expected as a consequence of a sudden and
unprepared empowerment of the auditee to conduct self-evaluations. Therefore,
such a transformation can begin only after certain prerequisites are met.

What are the prerequisites for performing a self-audit?

According to Forsha (1992), the basic conditions for continuous improvement
are: ``identifying a problem, motivating yourself to do something about it, and
taking action''. While the introduction of the traditional auditing methodology
facilitates the attainment of the first stated condition, it is expected that self-
evaluation will increase the motivation to act on the findings, and thus foster
the achievement of the second and third condition. However, improvement can
only occur if the process is stable and capable of meeting set requirements first,
in other words, if it is controlled. Since in a self-audit, the process owner
conducts the evaluation of process performance, the most important
prerequisite becomes self-control, both psychological and technical. Juran and
Gryna (1993), and later Shirley and Gryna (1998), discuss this concept in detail,
and emphasize that, in order to be in the state of self-control, process owners
must know:
. what they are supposed to do;
. what their actual performance has been; and
. how to regulate their performance.
These conditions point out the need for proper training of self-auditors,
allocation of sufficient time to perform the audit, preparation of audit aids such
as checklists and scoring sheets, ensuring management support, and adequate
follow-up with respect to audit findings. Enclosed is a more detailed list of the
requirements for a successful self-audit:
 . Self-interest of the process owner must be considered of fundamental Self-audit of
importance. process
. Management must not only be supportive of the self-audit, but also performance
actively involved, including fulfilling the following functions:
± initiation and approval of the self-audit plan;
± provision of adequate resources; 35
± acceptance of the self-audit report;
± incorporating the results into business planning.
. Short of drafting a formal self-audit procedure, basic guidelines for the
evaluation process should be available to the auditors, including auditor
checklists. Roberts (1993) discusses the design of such personal
checklists to let ``employees keep track of desirable personal job-
performance traits and failures (defects) to achieve goals in certain
categories''.
. Each audit must have a clear objective and scope, including having the
knowledge of:
± process boundaries;
± suppliers and customers.
. Process ownership must be formally established.
. Major stakeholders in the process, including workers, suppliers, as well
as internal and external customers, must be informed, and invited to
actively participate under the auditor's leadership. For example, it is
customary for the quality award and registration bodies to provide a set
of auditor checklists to their client's audit (Willborn and Cheng, 1994).
. A written report on the self-audit results should be prepared.
. The auditor should be actively involved in any internal or external audit
of the process, and should receive a copy of the audit report.
. No punitive actions of any kind, nor actions appearing as such, should
be taken in conjunction with and as a result of a self-audit.
. Process improvements resulting from a self-audit, should be recognized
by superior management, possibly in relation with an achievement
award.
Evidently, quality-driven organizations with well-established internal audit
programs will be able to quickly adapt their systems to these requirements and
move toward self-evaluation. However, while a traditional audit is conducted in
a very formal and mechanistic manner, self-audits are declarative in nature,
performed not in accordance with set procedures, but rather guided by several
fundamental principles. In the words of Pyzdek (1999), we should ``replace
IJQRM management control systems with a system of general rules that lead
19,1 inexorably to self-control''.

What are the basic self-audit principles?

Much like a conventional quality audit, according to Karapetrovic and
Willborn (2001), a self-audit can be conceptualized as a system of interrelated
36 activities that are aimed at evaluation of process performance to enable
continuous improvement. In a sequence of activities that resembles a plan-do-
check-act cycle, the objectives for conducting a self-audit are determined, the
audit is planned and adequate resources are allocated and deployed, followed
by the execution and incorporation of results into business planning and
follow-up actions (Figure 3). In contrast to the internal quality audit, the client,
auditee and the auditor are the same person, organizational unit or the
organizational itself. Figure 3 presents the fundamental rules for conducting a
self-audit, arranged along the above-mentioned sequence of audit activities. It
is based on the model of the principles for generic auditing, found in
Karapetrovic and Willborn (2001). Most of these rules are declarative and self-
explanatory, from the clear understanding of the purpose, objective and scope
of the audit, through the existence of audit criteria and evidence (otherwise, an
audit would be impossible to undertake), to the verification of the collected
information and inclusion of results in future planning. The main purpose of
such a flexible set of principles is to allow organizations to design and
implement self-audits in whatever form they deem most appropriate, as long as
some basic rules that ensure audit integrity are followed.

Figure 3.
General principles of
self-auditing
Methodology Self-audit of
In the following sections, general steps for the development of a self-audit process
program, and required qualifications of involved parties are discussed. performance
How can we introduce a self-audit program?
Simplicity and informality are essential for the process owner, who is now
acting as an auditor, to readily accept the additional evaluation task. 37
Nevertheless, in addition to the above-mentioned general principles, an
elementary guideline for the execution of an audit may be suitable. The
complexity of such a guideline will depend on the relative complexity of the
auditing task at hand, understanding of the audit criteria (standards and
excellence models), as well as the intricacies of the evaluated process itself.
The following seven basic steps, similar to Juran and Gryna's (1993)
suggestions for the gradual introduction of self-inspections, are advisable:
(1) The purpose and benefit of a self-audit are studied and explained to
selected and/or concerned personnel. The initiative may come from the
process owner, executive management, or outsiders such as a consultant
or auditor. All questions and concerns should be addressed. If resistance
prevails, further steps should be taken to dispel any fears or perceptions
that the introduction of self-audits would be useless. This could be done
by emphasizing the benefits and positive results that are expected for
each individual involved. Take an example of a production worker who is
concerned about a possible negative result stemming from her self-audit.
Let us say that the audit shows a decrease in output productivity. In this
case, the fact that the self-audit is meant for improvement and carries no
punitive action of any kind should be underscored. The worker herself
would conduct such an audit. Being the most knowledgeable person about
her line of work, she is also the most likely person to discover areas for
improvement that would directly benefit her individually.
(2) A test project with a suitable process is conducted. The project must
include the process owner. For example, a quality champion or an
internal quality auditor may initiate a self-audit on their own work.
Experiences and results should be presented to a wider audience of
people who are considering the introduction of self-audits. The process
owner should also decide on the further self-action resulting from the
audit. If the test project is successfully completed, others should be
planned and implemented, following the principles outlined above. In
the case that there are still doubts about the usefulness of the exercise,
additional self-audits should be planned and executed.
(3) The process owner should be formally empowered and assisted without
undue interference. For example, the manager of the department in which
such an audit is planned should encourage the process owner to conduct
the audit. The manager should also offer assistance, for instance, in terms
of additional auditor training or time to analyze results. Mandating the
IJQRM execution of a self-audit or the expected results will only hinder the
19,1 success of the effort. An oral or written self-audit plan is prepared and
submitted to the executive management, with a particular focus on clear
objectives and scope. The emphasis may rest with certain problems with
the process and/or potential improvements. Adequate resources are
provided, including time off regular work to conduct an audit, as well as
38 the required training. The process owner decides on the timing of the
audit and additional team members, if necessary.
(4) A self-audit is conducted with changes made to the plan and approach
as found necessary by the owner. Unforeseen difficulties should be
brought to the attention of those who can help. Technical advice and
assistance should be readily available. This is particularly important for
process owners who have just started to implement self-audits. People
who undertook pilot self-audits from Step 2 can greatly assist new ``self-
auditors''. In the case that technical help with respect to auditing
methodology is required, experienced internal quality auditors or even
consultants can provide the necessary knowledge.
(5) An oral or written report of results is drafted according to the self-audit
plan. Although an oral report is convenient in most cases, it might lack a
detailed list of possibilities for improvement. Therefore, it may be
appropriate only after several self-audits have already been
accomplished. In the initial stages of the self-audit effort, it is advisable
for the process owner to prepare a written report. It is crucial that the
report focuses on both the strengths and identification of real
opportunities for improvement, and not just self-congratulatory
statements of compliance with the selected criteria.
(6) On the basis of the self-audit report, prioritized follow-up actions are
decided and approved by the process owner and management. These
actions are incorporated into the business plan (for example, in several
phases suggested by EFQM, 1999b). It is expected that the initial self-
audit will uncover many areas for improvement. Thus, some
prioritization is required, depending on the impact that identified areas
have on process performance. As a result of conducting several such
audits, more evident problems will be corrected. Also, the process owner
will gain experience in identifying potential problems and thus move
from correction to prevention.
(7) Implemented follow-up actions are continuously reviewed for
effectiveness and efficiency. Self-audits are conducted regularly, as
required by the process owner or the results of previous audits. For
example, if a previous audit discovered a significant number of issues
that demanded immediate corrective actions, the next self-audit may be
scheduled earlier than planned. Although the regularity of audits will
depend on each individual case, several annual self-audits are advisable.
It is important that they do not become overly bureaucratic, so if
 circumstances do not warrant more than, for example two audits per Self-audit of
year, then so be it. process
These seven steps of the self-audit process are illustrated with a flowchart in performance
Figure 4. The ongoing training of participants underlines all seven steps.

What are the required qualifications of participants? 39

The self-auditor, that is, the owner of the audited process, should be familiar
with the purpose and approaches of quality auditing, self-assessments and
benchmarking. Experience and confidence will normally come with practice.

Figure 4.
Self-audit program ±
an example
IJQRM Assistance from process operators, and representatives of internal and external
19,1 suppliers/customers, should be available when requested. The self-auditor
could further call on technical experts and professional auditors for assistance,
in essence forming a self-audit team (Pasco and Brown, 1989). He/she should
also be free to admit observers, when, for instance, the self-audit is conducted
against a specific standard, business excellence model, or benchmarking
40 scheme.
A self-audit is not to be understood and handled as a traditional audit. The
process owner wants to check performance for possible problems and
improvements with more or less his/her own initiative and interest. This
requires an adequate direct familiarity with the process at hand. Daily
experience will help identify problems and nonconformances before they
become critical. Flaws in all aspects of the process and its individual input,
throughput, and output phases should not escape the attention of the person in
charge. Of course, this individual must be aware of such shortcomings and
potential improvements, if not during daily operations, then during the self-
audit.
In brief, the qualifications of the self-auditor include:
. competency to undertake the audited process;
. knowledge and experience regarding the relevant technology,
equipment, material and outputs (product), work places and flow, and
interdependencies with other processes;
. good working relationships with co-workers and superiors;
. training in relevant policies and procedures governing the process;
. introduction to basic principles, policies, and approaches/methods of
process evaluation;
. ability to evaluate objectively and without fear own work and process
related performance;
. ability to cooperate with professional auditors, trained assessors and
technical experts.
While some of these qualifications simply require a level of professionalism
that comes with normal education and training for the job, the more technical
requirements can be fulfilled by adequate training. For example, good working
relationships with colleagues and expertise in the process itself are required for
successful process ownership and management. Training in internal quality
auditing and process evaluation techniques may be obtained by taking
auditing courses that are readily available through quality system registrars or
national quality organizations. Experienced self-auditors may be able to
provide additional training, as well. All other participants should assist in the
self-audit, as requested by the process owner. They should be adequately
informed about the ongoing self-audit project, especially its objectives and
results.
Example Self-audit of
The following is a hypothetical case, designed to simultaneously describe a process
self-audit process and to further outline the difference between a self-audit and performance
its traditional counterpart. As a process under evaluation, we have chosen the
traditional quality audit, conducted by the process owner (internal auditor).
Any audit is in itself a process, an integral part of an organizational
management system (Karapetrovic and Willborn, 2000), and therefore can be 41
examined for effectiveness and efficiency.
``Who audits me, the auditor?'' This is the question asked by an auditor, let
us call her Karla, of a hotel chain with an ISO 9001 registered quality
management system. The hotel's senior manager Mike answered: ``The auditor
of our registrar will have to assess our internal audit. Furthermore our regular
management review will have to decide if our internal audits are satisfactory.''
The internal auditor, however, wanted to assure herself prior to the external
audit and the management review, that her audits can stand-up to the ISO
10011 audit guidelines. Karla had been impressed by the self-audits both the
kitchen chef and the headwaiter had conducted. These departments had
achieved significant improvements, recognized by her recent internal audit.
The hotel manager was surprised by this plan for a ``self-audit of the audit''.
Nevertheless, having become familiar with the other two self-audits in the
hotel, there was no reason why the auditor should not proceed. Self-audit of the
internal audit process was certainly innovative and would help the hotel to
stand out among the other hotels in the chain. Having gained the manager's
support, the internal auditor proceeded as outlined in Figure 4.
Step 1, initiation, and Step 2, test project, had already been accomplished in
her case, since two self-audits had been conducted within the kitchen and
dining room departments. Step 3, planning, involved the assurance of
qualifications for performing a self-audit, which the internal auditor felt she
possessed by having participated in several self-assessments and
benchmarking projects while she was with a previous employer. This step also
included the empowerment to conduct a self-audit granted by the hotel
manager. Karla also called on the kitchen chef (Paul) and the headwaiter
(Vladimir) to assist her. Both were initially surprised, because they were used
to being Karla's auditees. But they rightly expected some personal benefits
from participating in the auditor's self-evaluation, and therefore agreed to
participate. Subsequently, Karla prepared a written self-audit plan, mainly for
informing her two assistants. The project aimed at evaluating the last two
comprehensive audits of the assistants' areas, the kitchen and the restaurant.
The main purpose was to evaluate if these recent audits had been properly
planned and executed. Naturally, it would be hard to answer this question
during the execution of internal quality audits, since both the auditor (Karla)
and the auditees (Paul and Vladimir with their staff) were under pressure to
verify ISO 9000 compliance. This time, in a much more relaxed state of mind,
the two assistants made a few suggestions to the self-audit plan, based on their
recent experiences as auditees. For instance, they suggested two afternoons
IJQRM (relatively quiet time of the day) as the scheduled time for the self-audit, as well
19,1 as drafting the audit report in point form on one page only, for brevity and
clarity.
Step 4, execution, included the preparation of a brief checklist, containing the
requirements of the ISO 10011 (1990) standard. Karla then discussed the
checklist with Paul and Vladimir, who suggested some additional questions.
42 For instance, they pointed out that the operations in the patisserie, for certain
food processing procedures, and training of sous-chefs were missed last time
the audit was conducted. Karla then retrieved the audit plans and checked
these with the procedure suggested by the ISO 10011 guideline. Following the
checklist, she revisited the individual phases of the internal audit, such as the
opening meeting, interviews, observations, presentation of the findings, and
follow-up measures.
The opening meeting was too time consuming, a brief memo would have
done sufficiently. It was found that the auditor had overlooked the requirement
that auditees have to be properly informed about an impending audit in their
area of responsibility. Food samples taken, as well as hotel guests selected for
the audit, were not sufficiently representative of the population. The audit was
poorly timed during the ``rush hours'' when staff members could not pay
adequate attention to the auditor's questions. In the restaurant, the auditor had
taken the position of a guest, while at the next table an important regular guest
had to be attended to. Finally, the audit report had not been sent to the auditee
prior to its submittal to management and its management review.
Step 5, report, concentrated on making notes of the findings directly in the
checklist and a brief discussion of future improvements with the assistants.
Karla informed the hotel manager that the self-audit was completed, giving full
credit to the kitchen chef and the headwaiter for their support. The manager
suggested that the self-audit should be further discussed in the next
management review meeting. Other department heads would be interested, so
that gradually a self-assessment program against a business excellence model
may evolve. This would also ease the change to the new ISO 9001 (2000)
standard, which requires continual measurement and improvement of
performance results.
During the next Step 6, follow-up, actions were taken to correct perceived
shortcomings, as well as to prevent future inconsistencies with the ISO 10011
guideline. As a result, Karla made changes to the internal quality audit plan,
strengthening, among others, the applied sampling and scheduling methods.
For the next self-audit in the kitchen and restaurant departments, she was
invited to participate and assist in internal benchmarking. The results of the
three conducted self-audits were reviewed in the hotel management meeting.
It was decided to broaden their scope to other departments, together with the
Step 7 continual review of the performance of consequent self-audits and
business plans.
Conclusions Self-audit of
In recent years, it has become apparent that organizations competing in any process
kind of market cannot rely solely on ISO 9000 standards to meet the increasing performance
demands for continuous improvement and business excellence. Consequently,
the traditional quality auditing methodology designed to test quality assurance
systems against the standards falls well short of enabling performance
improvement. While there is little doubt that a system audit is an excellent tool 43
for independent, objective and systematic evaluation against the standard's
minimum requirements, based on professional and statistically sound
judgments, there is even less doubt that some changes are required. Among the
problems that continue to plague the audit are the lack of motivation of
participants, narrow focus on quality assurance, non-existing linkages with
business planning, and the inability to measure efficiency or at least focus on
business results. Meanwhile, self-assessments against quality award models
have gained prominence in exactly the areas where quality audits were lacking,
most importantly performance improvement. Although they cannot replace
quality audits, self-assessments possess one crucial characteristic that can
improve their more formal counterpart: self-evaluation.
In this paper, we proposed that the process owner conduct periodic self-
evaluations of process performance. This concept, branded as a ``self-audit'', is
largely based on the internal quality audit and self-assessment methodology.
Its strength, compared to the conventional audit, lies in a less rigorous
evaluation, little external control of compliance with set procedures and official
guidelines, and the opportunity for joint identification of improvements in the
work place. In a small business, a self-audit may be the only practical process
evaluation method available. Here the manager, auditor, auditee and the client
are usually functions of the same person. The independence principle of the
traditional audit would require at least two internal auditors in the company,
regardless of how small it is. A self-audit is also expected to bring a solid
foundation in data collection, verification and evaluation, as well as more
objectivity to self-assessments. Apart from defining the concept of self-audit,
stating the reasons for its introduction, discussing the relationships of the self-
audit with other evaluation methodologies, and analyzing the scope of potential
application, this paper formulated the main principles of the self-audit, and
provided some of the prerequisites for the application. Subsequently, the
process of implementation was discussed and illustrated with a hypothetical
example.
Finally, further research in the area of quality auditing, aimed particularly at
improvements in efficiency and effectiveness of the methodology, is
particularly encouraged. Specifically to the self-audit concept, testing and
verification in a business environment, as well as an empirical study of the
application, are suggested. Research into the conversion from internal quality
auditing to self-auditing in different industries would also be beneficial. Of
particular interest would be an analysis of the usefulness and applicability of
the concept in small to medium sized enterprises. Furthermore, integrative
IJQRM approaches to performance evaluation, including auditing, self-assessments,
19,1 benchmarking and performance measurements are required. Examination of
the possibility of expanding the self-audit concept into areas other than quality,
such as environmental, safety and dependability management, is another
possible topic.

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