A factory audit checklist helps examiners review critical operating processes within a plant.
A company's leadership is responsible for implementing adequate and functional controls in corporate operating processes and production systems. A manufacturing firm generally establishes internal controls in factories and plants to prevent operating losses resulting from error, fraud or technological malfunction. These losses may also originate from noncompliance with safety laws, government regulations and industry practices.
Control Environment
A factory's control environment consists of all internal and external elements affecting production activities. An auditor reviews these elements to learn about control effectiveness in manufacturing processes. Internal elements include human resource policies, safety standards, job specifications and the work environment. External elements may consist of laws and regulations, unions' initiatives and industry standards.
Working Conditions
An auditor reviews working conditions at a plant or factory to make sure these conditions adhere to regulatory guidelines and corporate policies. This review is important to prevent fines and litigation. The auditor may review working hours, production processes and quality-control policies. An examiner also evaluates control adequacy in warehouses, production systems and maintenance activities.
Compensation Policies
Compensation policies consist of financial arrangements and procedures through which factory management pays employees. An auditor ensures that the factory has a written compensation policy that conforms to local laws and industry practices. The auditor also reviews overtime remuneration procedures and learns about the factory's policies concerning meal breaks and personal breaks.
Labor Compliance
Labor compliance requirements help a factory manager or plant supervisor ensure that workers receive fair treatment when performing tasks. An auditor reviews corporate policies with respect to underage and forced labor. For instance, the auditor may ask a plant supervisor whether there is a mandatory age for school attendance in the region.
Staff Representation
Staff representation procedures help employees discuss labor issues with factory leadership or department heads. An auditor ensures that workers have the ability to approach management on issues of concern. The auditor also may review corporate policies regarding employee representation, including union representation. Alternatively, the examiner may seek evidence of unequal treatment between staff representatives and other employees.
Facilities
An important element in a factory audit checklist is geography. An auditor reviews a factory's location, ensuring that the external environment does not pose risks for production staff and is appropriate for manufacturing activities. The auditor also learns about internal conditions, such as equipment and machinery that factory staffs use in production activities.
Safety Requirements
Safety procedures consist of policies, standards and guidelines that factory management uses to ensure worker safety. These procedures may include fire protection and health care coverage for accidents occurring in manufacturing facilities. An auditor ensures that corporate safety policies adhere to regulatory guidelines, such as Occupational Safety and Heath Administration rules.
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