PALATAN, Randell Jan M.

BSA35 Operations Auditing Quiz #7

BSA-III-A31A Mr. Clyde dela Fuente October 24, 2020

ANSWERS:
1. Operational audit’s focus on business objectives is of high importance because these
objectives lay the foundations of the organizational operations. As things that companies
want to achieve through its operations, operational audit is needed to ensure that
everything is geared towards such. Auditors should ensure that there are internal controls
that are geared towards the achievement of objectives. If business objectives are unclear,
a company is doomed to fail for sailing without course and operating without steps to
follow. Operational audit can help assess and solve such issues regarding business
objectives. Aside from the given solutions, a company can also include more people in its
discussions to address differences in understanding of company objectives among
management and stakeholders. Having more people will mean more time but it will help
everyone be on the same page of understanding of objectives and identify and solve
deficiencies if any.

2. Have you ever been confused in the workplace on what to do next? You seem unsure
where to go of who to approach? Have you asked yourself what you are really working
towards? Many employees and even managers have these same problems. It’s almost like
no one is in control. That is why internal controls exist. Many people think internal
controls just lengthen work processes but it’s actually the opposite. Internal controls
make sure that there are no unchecked risks that can derail the achievement of business
objectives. Internal controls make sure that everyone is on the same page and is working
towards the same goals. They may need time but they will make sure that the business
will succeed.

3. Lean and Six Sigma methodologies are related to the work of internal auditors because
they all exist to ensure that risks are identified, assessed and solved. As a method that
exists to make sure that a process will deliver quality outputs and improve processes by
using statistical analysis, it is both a tool for internal auditors and has the same function
and mission as the audit program. The internal auditor’s work is to identify the sources of
error and determine the best way to eliminate them which is the same with lean and six
sigma methodologies. Identify errors, come with the best way to eliminate them, and
make sure that processes and the operation as a whole is continually improved to better
achieve business objectives.

4. If possible, then yes, all processes should operate at the Six Sigma level. However, given
the limited resources available in many organizations that can be allocated to quality
improvement, it could become prohibitively expensive to achieve precision at the Six
Sigma level. These decisions will vary according to the cost-benefit approach. Managers
PALATAN, Randell Jan M. BSA35 Operations Auditing Quiz #7
BSA-III-A31A Mr. Clyde dela Fuente October 24, 2020

should have a good grasp of this concept as to not try to achieve Six Sigma levels and
only result to wastage of resources or settle for less but they actually have the capacity to
do more. Organizations should never settle for less and develop a work culture of
constant pursuit of excellence in the most cost-effective way possible while reducing
errors along the way. An appropriate sigma level should exist so as to avoid mediocrity.

5. The misconception that Six Sigma is only applicable to manufacturing is old news. It can
be applicable in any environment where processing activities are performed such as the
servicing sector. Six Sigma tools can be used first to review the current process of service
companies in rendering their offered services. By doing this, deficiencies and wastes in
the process can be identified and resolved therefore saving the business costs and
improving profit margins. Another example of usage of the Six Sigma in a service
environment is lowering turn-over rates of employees and improving response time on
services to achieve customer satisfaction. Whatever it is, Six Sigma in the servicing
industry will help them become a customer-centered organization and gain control over
process complexity.

6. The elements of the acronym DMAIC are: D for Define the current process and if it
meets customer expectations; M for Measure key aspects of the current process and
determine the production capability in the current state; A for Analyze data to investigate
and identify the root cause for deficiencies; I for Improve the current process based on
the data analysis performed through new programs, better processes and more; and C for
Control the future state process to make sure that everyone and everything is geared
towards the achievement of business objectives and that anything that causes divergent
from the path be resolved early on.

7. The seven quality management principles of ISO 9001 are: 1. Customer focus to ensure
satisfaction and get a bigger market through good reputations; 2. Leadership to ensure
that there is a collaborative approach in the operations from all hierarchy levels and are in
line with company objectives and also to lead by example; 3. Engagement of people to
make sure that everyone is competent and can work individually and collaboratively to
promote the business; 4. Process approach to ensure that the process system is designed
in an integrated and seamless way from one step to the next until the achievement of
quality outputs; 5. Improvement to create a company culture of continuous hunger for
development and growth; 6. Evidence-based decision-making so as to achieve goals and
objectives through analysis of information in hand and not on mere hearsays; and lastly 7.
Relationship management to better handle relations with stakeholders, especially the
customers, and develop a loyal market that will help the organization to succeed in the
long run.