Statistical Knowledge Improves the Value of Audit "When to Say When"

Article

Griffin, Gary G.   (1992, ASQC)   BFGoodrich Aerospace, Vergennes, VT 05491

Annual Quality Congress, Nashville TN    Vol. 46    No. 0
QICID: 9870    May 1992    pp. 518-523
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Article Abstract

The author describes how to build an internal audit system that is accurate, cost effective, and flexible.

The first step is to plan and organize the audit program itself by creating an audit checklists and a rough schedule. The checklist should include the number of observations to be made for each characteristic. Choose a method for data collection at the beginning. Next, identify the total population of the characteristics. From there, analyze cost vs. confidence level to determine the sample size. There is a direct correlation between the size of the sample and the degree of confidence; however, there is also a direct correlation between the size of the sample and the cost of the audit. After choosing a sample size, refine the preliminary checklist into a standardized checklist for the auditors.

BFGoodrich used this method to analyze a set of their data and found that it delivered a high confidence level. They were able to reduce the size of their sample, and thus the cost of their audit, based on this success. The author demonstrates that this auditing process grants a high return on investment.

Keywords

Audits,Confidence intervals,Data analysis,Data collection,Quality control (QC),Simmonds Precision Quality System


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