EAST MEETS WEST Occidental Flavor and Approach to Audit

1. EAST MEETS WESTOccidental Flavor and Approach to Audit Takashi Tsuchie/Head of Certification CI Japan Limited CI Japan

2. “Value that Audit Brings to Business” • “Value acquired by being audited” • What is necessary for audit to be recognized • by organizations, their customers and interested • parties? • What is necessary for tasks of auditor? CI Japan

3. Value that Audit Brings to Business ＝　Findings Leading to Improvement Results of Questionnaire Survey Conducted in Internal Audit Manager Seminar ◆ Is ISO valuable for your organization’s activities? ◆What audit do you want? In both cases, “Findings leading to improvement” Organizations want to enhance their risk treatment capability CI Japan

4. Value that Audit Brings to Business ＝　Findings Leading to Improvement Results of Post-Audit Questionnaire Survey ◆Was this audit valuable? Whether their answer to this question is ‘Yes’ or ‘No,’ auditee organizations have the same expectation to audit. ◆What audit do you want in the future? Findings Leading to Improvement Recognized by Third Party Findings Leading to Identification of Risks Ultimately, auditee organizations want to enhance their risk treatment capability. CI Japan

5. What Kind of Audit can Deliver Findings Leading to Enhancement of Risk Treatment Capability? Value that Audit Brings to Business ＝　Findings Leading to Improvement We were all aware of importance of audit focusing on work site, but … Professional Perspective Assess work site with a skeptical eye on performance Customer Perspective Assess work site with an eye on “who are the weak?” Business Management Perspective Assess work site with an eye on statistics CI Japan

6. “Value that Audit Brings to Business” Assess work site with a skeptical eye on performance < Example 1> Which characteristics of products/services are highlighted in audit?・・・　 Discuss with auditee organization about preparatory activities at work site prior to on-site audit→Obtain relevant information prior to on-site audit → Validation CI Japan

7. “Value that Audit Brings to Business” Assess work site with a skeptical eye on performance CI Japan

8. “Value that Audit Brings to Business” Assess work site with a skeptical eye on performance <Example 2> Validate products from the viewpoint of their users CI Japan

9. “Value that Audit Brings to Business” Assess work site with an eye on “who are the weak?” Validate products from the viewpoint of their users CI Japan

10. “Value that Audit Brings to Business” Assess work site with an eye on statistics Processing of metal parts for automobiles and aircrafts Input to Management Review - Customers requested quality improvement. - Work site reported that it failed to achieve the objectives though it had carried out improvement activities as planned. Objectives：　 X % cost reduction by means of yield enhancement X % reduction of release of defects Poor yield= Attributed to machines/equipment Procurement of new machines/equipment did not result in significant improvement. When assessing work site of metal part processing, auditor must observe one-hour operations and interview operators about the procedures. → Auditor must focus on “implement actions necessary to achieve continual improvement (4.1 (f), ISO 9001) CI Japan

11. What was Wrong? What did We Learn? Appropriate Risk Assumption and ThreeWork Site Perspectives Though we were aware of importance of audit focusing on work site, our former perspectives were not exactly aligned with the work site perspective. Product accidents and scandals become increasingly borderless, which can not be dismissed just as a cultural difference How and to what extent do we need to assess conformity and effectiveness of management system? It is time to re-examine the way to discuss appropriateness of auditing techniques. Regulatory requirements are increasing, along with progress of civilization and development of culture. Accordingly unpredicted risk areas that users of products/services are exposed to are expanding. Auditee organizations always want certification bodies to perform audits which bring value to business. As a task of auditors, three perspectives, namely professional, customer and business management perspectives, need to be applied to work site assessment, which will make audit valuable. CI Japan