Auditing – at the dawn of opportunity

Part 3: Dawn of change

Management wants people they can trust to find facts, people who can offer solutions and deliver improving results. The quality of assessors’ service will determine the level of demand and respect earned. In order for assessments to get a seat at the high table of business tools, “auditing” must change its business model. Doing so will involve tackling some thorny issues, and dealing with a number of problems which, given goodwill and effort, can be resolved.

Here are but a few matters:

1. Various incidents collectively suggest “auditing” at present is ineffective and needs improvement. Recent debacles in the pharmaceutical sector (outlined in the accompanying table) involving the world’s largest drugs companies coming relatively soon after the Ford Explorer rollover tragedies and all too frequent product recalls in the automotive and other sectors strongly refute arguments that this matter, of audit efficacy, is confined to an isolated incident or a single, untypical “rogue” firm. The conduct of major corporations is highly influential in determining standards for auditing. The evidence suggests there might be a generic problem with audit practices: with the service we provide. Maybe the precepts of professional performance are not put into practice.

2. In the pharmaceutical incidents, several times the questions were raised: is the FDA as diligent as it should be; and did the companies ignore known risks? They will eventually be answered. So one wonders, how good are the FDA auditors? Of course, if they need to improve in any way, the media, legislators and political lobbyists will discuss that matter!

3. But, it raises a more disturbing issue for those in non-statutory auditing. In all probability the companies’ and FDA’s auditors were appropriately qualified in the pharmaceutical field, knowledgeable about GMP and experienced in the associated processes. If so, what chance could an occasional audit by a registrar, naturally less familiar with the intricacies of drug R&D, manufacture, quality control and distribution, have of making a substantial contribution to public safety and drug efficacy? If government auditors are ineffective despite their legal mandate, available power and resources, one might then ask, can registrars be truly effective?

If those drugs firms were ISO 9000 registered or similar, did they or will they lose their certificates? Just as the UK authorities (not the FDA) closed down Chiron’s Liverpool vaccine plant, it is my belief that such certificates ought to be immediately suspended or withdrawn when death or serious injury does or might occur. Res ipsa loquitur, as the legal profession would say: the thing speaks for itself. How else could the registration component of the auditing profession retain credibility? If it loses credibility, all “auditors” suffer in consequence by association.

What should be done to help improve the registration process? As will be mentioned, later, one can strongly argue it deserves some changes to its governing regulations. (Perhaps the newly formed RABQSA International will be of assistance. Considering the consequences of globalization on quality, that merger is a welcome development, one hopes is able to get to grips with these issues.) The registration industry must consider carefully its position, policies and schemes. The drugs’ debacles present a magnificent opportunity for it to show how it deals with such situations, acts in the public interest and is to be relied on.

We cannot simply blame management for whatever shortcomings in “audit programs” there may have been. Auditors must be mature and professional enough to accept some amount of mea culpa. Internal auditors, registrars and statutory auditors alike must do that. It is time they worked together more effectively for the interests of all stakeholders, none of which benefit from poor quality programs, products and services. So, let us revise our business model and then explain to our managers why the resulting service will be superior in reducing avoidable costs and risk.

Next Part 4: Revising the business model

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