Compliance and Audit
Compliance is an affirmative indication or judgment that the supplier
of product or service has met the requirements of the relevant specifications,
contract, or regulation, also meeting the requirements. On the other hand, in
ISO terms, ‘Compliance to regulations, compare with conformance’. So,
enterprises/facilities/industries of all sizes can ensure supplier, operational
and regulatory compliance to down risk, increase opportunity and realize the
full potential of agreements, transactions and contracts. Three criteria are
essential in compliance: -
@ Effective Corporate Controls
@ Transparent Processes
and Efficient Audits
@ Timely Disclosures
An
audit is a systematic and independent examination to determine whether Standard
compliance activities and related results comply with planned arrangements and
whether these arrangements are implemented effectively and are suitable to
achieve objectives.
The above definition has some important
characteristics of an audits. The following characteristics will be built into
a social compliance/COC audits to maximize audit credibility and effectively:
1. Planned: Audits must be
planned in accordance to a defined objective. To be effective, auditors should
prepare for an audit by considering questions such as:
Ø What is the purpose of this audit?
-Define
what needs to be accomplished.
Ø What is the scope of
this audit?
-Define
what/who will be audited
Ø Who will perform the
audit?
-Define which person(s) will carry out
activities
Ø When will the audit be
performed?
-Define
the day(s) and time(s) for the audit
Ø What information
sources will be utilized? -Define
a strategy for investigation by identifying
Ø what information is
available/appropriate for review.
2. Independent: Audits
must be performed by persons who are independent of the functions audited in
order to eliminate potential bias.
3. Management
Co-operation: The success of any audit program depends on the support of
management
4.Compliance
Orientation: Social compliance/COC audits is to a specific standards
are conducted which the auditors look for compliance to
the requirements set forth by the standards. This means that Social
compliance/COC audits will review documentation for intent to
comply with the applicable standard, as well as records and processes to
determine implementation of the document system and how effective the
Social compliance/COC is working at the facility.
@ Identification of
opportunities for improvement.
@ Implementation status
check.
@ Effectiveness check.
@ Improve communications
and motivation.
@ To check level of
standard with any brands,ILO,SA8000,WRAP etc
@ To ensure customer
requirements
@ To ensure local labour
law at the workplace
@ Enhance management and
workers communication
@ and to enhance profit through productivity
increase
Factory Management’s
Role in Audit
Management
has an active role in both an internal & external audit program, and is
charged with the responsibility of:
•
Initiation of the audit program: The audit program must
be initiated and supported by management .
•
Assurance of auditor independence: Provisions must be made
to ensure that auditors have no responsibilities in the areas audited so as to
eliminate the possibility of any bias with respect to audit findings.
•
Provide resources: Managers must ensure that there are an adequate
number of available auditees to administer the audit program,with available
documents and that employees are made available during audits.
•
Assure corrective action: Managers must consider
and take actions necessary when the results of an audit show that corrective
action is required.
Concept
of Social Compliance /CoC Audit
A
social compliance /COC audit is a systematic and independent external
assessment administered by a trained social/COC auditor or certified Lead
Auditor of SA 8000/WRAP/ISO against a specific standard (for example
SA8000,BSCI and WRAP) etc. to determine whether an entity is meeting those
standards and complying with established policies, operating procedures and
national and local laws, ILO Conventions and international best practices .
So,
in any Social Compliance/COC audit five criteria are essential. These are as
follows-
[
F A
proper system ( ISO 9001:2000/8)
F An independent external assessment ( any 3rd
party or individual)
F Trained social/COC auditor or certified SA
8000/WRAP/ISO Lead Auditor
F Specific Standard (any brands COC, SA
8000/WRAP/FLA)
F and a Facility
Role of a Social
Compliance/COC Auditor
•
An assurance of engagement
•
Reliability of the information contained in the report
•
Perform only customer requirements not other tasks e.g. CSR
•
Gather evidence for all significant assertions in the report
•
Assess the report’s conformance to particular standards
•
Know the specific references –
-Labour Code’2006
-The Factories Act 1965
-The Factories Rules 1979
-Industrial Relations 1969
-The Environmental Act 1995
- The Environmental Rules
1997
-Bangladesh National Building
Code 2006
-Maternity Benefit Act 1953
&1959
-BEPZA Instruction
-ILO
- International Standard like-WRAP,SA 8000, ISO,OHSAS18001
-International Codes of
Conduct like-BSCI,FLA,ETI
-Brand Buyers Code of Conduct
Types of Audit
1.
1st Party Audit: This is the technical term used when conformity audit/assessment
to a standard, specification or regulation is carried out by the supplier
organization itself. In other words, it is a self-audit/assessment. In a word
it is called “In house-internal”
2.
2nd Party Audit: This indicates that the conformity audit/assessment is carried out
by a customer of the supplier organization. An audit driven by a customer with
the primary goal of satisfying itself that a supplier is in compliance with a.
“Out house-customer”
3.
3rd Party Audit: The conformity audit/assessment is performed by a body that is
independent of both supplier and customer organization. An external audit that
is conducted by an independent organization upon another organization. Powerhouse-registrar/certification
4.
Internal and External
Audit: Internal audits are
audits that are carried out by an organization on itself to confirm to
management that the compliance implementation system is in good working order. external
audits: 2nd party and 3rd party
Close
System Audit
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