Audit and inspection are two important tools organizations use to ensure compliance with regulations, policies, and procedures. While they share a common goal of evaluating an organization’s operations, audit and inspection, have several key differences. This blog post will explore the 15 main differences between audit and inspection to better understand their distinct purposes and characteristics. By clarifying these differences, organizations can effectively utilize audit and inspection processes to enhance compliance and improve performance.
Audit and Inspection
Audit and inspection are two important tools that organizations use to ensure compliance with regulations, policies, and procedures. An audit is an independent evaluation of an organization’s financial statements, while an inspection reviews an organization’s operations and compliance with applicable laws and regulations.
Organizations conduct audits to assess whether their financial statements accurately reflect their financial position and identify potential areas of financial risk. On the other hand, inspections are conducted to evaluate an organization’s compliance with laws and regulations and identify potential non-compliance areas.
Audits and inspections are important tools for ensuring that organizations operate in a manner that complies with applicable laws and regulations. However, it is important to note that audits and inspections are not substitutes for effective internal controls. Organizations should have strong internal controls to prevent and detect violations of laws and regulations. In addition, audits and inspections should be conducted regularly to ensure that organizations continue to operate compliantly.
The UK’s Health and Safety Executive publication Managing for Health and Safety defines health and safety auditing as:
“The structured process of collecting independent information on the efficiency, effectiveness, and reliability of the total health and safety management system and drawing up plans for corrective action.”
A shorter definition is:
Auditing is the systematic, objective, critical evaluation of an organization’s health and safety management system.
Safety audits have three primary objectives:
- Ensure the safety program is being followed by the company
- Identify weaknesses in the program.
- Make sure that proper documentation is maintained.
Health and safety audits share many common features with financial, quality, and environmental management audits; the basic principles are the same.
Auditing verifies that an organization’s safety management system is in place and operating effectively. It is:
- Systematic – the audit follows a series of logical steps and stages and follows a prepared plan.
- Objective – all findings are evidence-based.
- Critical – it highlights areas of non-compliance or non-conformance.
An inspection is a simpler process of checking the workplace for uncontrolled hazards and addressing any found. For example, we might inspect the fire extinguishers in a building to verify that they are where they should be, correctly signed, labeled with an in-date inspection, tagged, and pinned.
Difference Between Audit and Inspection
The duration and scope are the main differences between safety inspections and audits. Inspections usually occur monthly, but audits are more in-depth and frequent. Safety audits can take several days to complete, while inspections might only take five or ten minutes at the start of each shift.
A safety audit could be compared to performing regular maintenance on an automobile engine, whereas a safety inspection is like checking levels of oil and pressure in the tire. A car cannot run without an engine that is functioning. However, it can be run for a limited period on low oil levels or a deflated tire. But when the tire deflates, and the engine’s oil levels decrease, the vehicle gets smaller and more inefficient.
The following are five significant differences between an inspection and an audit.
- Audits focus on why, while inspections focus on what
- Inspections focus on actions, audits focus on the process
- Audits provide qualitative information, and inspections provide quantitative information
- Audits are complex, while inspections are simple
- Audits result in actions, and inspections create recommendations
A difference between workplace audits and workplace inspections is given in the following table.
|Detailed planning is required; it requires considerable resources.
|Assesses the effectiveness of control measures.
|A long process that examines the entire management system.
|A relatively short process looking at practices in part of the workplace.
|Only limited planning and main resource required is the inspectors’ time.
|Primarily based on observations, perhaps involving very limited scrutiny of paperwork and interview of operators.
|Long, comprehensive report that records areas of concern and weaknesses in the management system.
|Short report identifying key corrective actions required.
|Focuses on activities and equipment at an operational level, though remedial actions may address system faults.
|It is based mainly on the review of documentary evidence, observations, and interviews with all levels of personnel.
|Typically done annually.
|Usually done on a daily, weekly, monthly, or quarterly frequency.
|Aims to improve systems at a high level, with the ultimate effect of improvements cascading down to the operating level. Is a strategic tool addressing long-term progress
|Only limited planning and the main resource required is the inspectors’ time.
Other Differences Between Audit and Inspection
- Audits typically focus on an organization’s compliance with standards, and inspections typically focus on an organization’s performance.
- Audits are typically much broader in scope than inspections, as they seek to assess an organization’s compliance with standards across all areas of operation.
- Audits are typically much more detailed and comprehensive than inspections, as they seek to provide a complete picture of an organization’s compliance with standards.
- Audits are typically conducted yearly, while inspections are usually conducted more frequently, such as every six months.
- Audits are typically conducted by external parties, such as government agencies or independent auditors, and inspections are typically conducted by internal parties, such as managers or supervisors.
- Audits typically utilize various methods, such as interviews, surveys, and document reviews, and inspections typically utilize a single method, such as observation.
- Audits typically result in a formal report issued to the organization being audited, and inspections typically result in a more informal report shared with the relevant managers or supervisors.
- Another key difference between an audit and an inspection is their purpose; while the purpose of an audit is to assess whether an organization is adhering to standards, the purpose of an inspection is to determine whether an organization is performing up to par.
- Audits can be quite costly due to the need to hire external auditors and the comprehensive nature of the assessment. At the same time, inspections are typically much less costly, as they are usually conducted by internal parties and are not as comprehensive in scope.
- It is important to note that audits and inspections are not mutually exclusive; it is not uncommon for an organization to undergo both an audit and an inspection simultaneously.
At the End of the Audit
Verbal feedback is usually provided at the end of an audit; this will involve a presentation to the management team for some audits. This verbal feedback will be followed by a written report. The report will make recommendations for improvement and indicate priorities and timescales.
As required, the verbal feedback and report are usually presented to senior management for action and/or praise. This is a demonstration of leadership; in some cases, it is a requirement in the audited standards. The management team has the authority and resources to take action where required and may also need to adjust the organizational goals and objectives.
After the audit, the feedback and report may contain several findings that require action. These may be classified according to their significance. For example, in the ISO systems, the feedback is prioritized as follows:
- Major non-conformance – a significant issue or breach which requires urgent action. This could result in the failure of the safety management system and/or result in injury. In ISO terms, a major non-conformance would be grounds for refusing certification.
- Minor non-conformance – an issue that is less serious and unlikely to result in injury or a system breakdown. In ISO terms, a minor non-conformance would require corrective action, but the certification would be
- Observations – an auditor’s opinion that the organization could decide to act on.
An audit must be followed up with action to correct non-conformities. These corrective actions will usually be checked during the next audit. In some auditing systems, this will be done through an interim follow-up visit or audit that simply looks at how the previous audit recommendations have been addressed.
In conclusion, audit and inspection are distinct processes with different scopes, focuses, and durations. While audits are comprehensive and conducted less frequently, inspections are more frequent and focus on immediate actions and hazards. Audits provide qualitative information and assess the effectiveness of control measures, while inspections provide quantitative information and assess compliance at a specific operational level. Audits are complex and result in detailed reports, while inspections are simpler and create recommendations.
Both processes are essential for organizations to ensure compliance, improve performance, and maintain a safe and efficient working environment. By understanding the 15 main differences between audit and inspection, organizations can effectively utilize these tools to enhance their overall operations and compliance efforts.