Internal Audit in the Small Business

Getting internal quality audits completed is often a struggle for small companies trying to maintain quality system registration, especially those with fewer than 50 employees. Here we review some of the ways to address this and look at some advantages and disadvantages of each.

The cross-functional approach involves having a group of employees within the company trained as internal auditors, and rotating the audits among these employees. The greatest advantage is having the audits done by employees rather than someone outside the company. It also contributes to employee growth since it gives employees exposure to different areas of the company. A disadvantage is that in a very small company, it is difficult to avoid the problem of an auditor not auditing his or her own area since there is a lot of overlap. Another problem with this approach is that audits sometimes get a lower priority than other work and do not get conducted.

Some companies elect to bring in a consultant to conduct the internal audits. These consultants are usually well qualified with extensive training and experience, something smaller companies cannot always provide. This also eliminates any conflict over who audits which areas, and avoids the problem of audits not being performed due to work priorities. The disadvantage is the additional expense of paying for a consultant, although this may be justified by not having employees take the time to do audits.

A third approach is to establish a reciprocal agreement with another company to conduct internal audits. A qualified auditor from Company A audits Company B, and vice versa. This probably works best when the entire audit schedule can be completed in one day. The advantages of this are the low cost (free except for the auditor’s time) and getting an outside look at the quality system. The disadvantage is finding a company to reciprocate, and most will want a non-disclosure agreement signed. It may be possible to arrange this through local ASQ sections. These methods work equally well for different companies.

A company must consider its needs and resources before making a decision on how best to handle internal audits.