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Auditing Best Practice

Total Quality Management and Internal Auditing

by Jeffrey Ridley

Executive Summary

  • The concept of total quality management (TQM) requires a total commitment by everyone in an organization to a vision of quality and continuous improvement, controlled and measured in all its practices, products, and services it provides to its customers.

  • The concept of TQM requires the same commitment, controls, and measures by the suppliers of products and services to the organization.

  • This vision of total quality by suppliers and to customers applies to both internal and external suppliers and customers.

  • TQM is an important contributor to good corporate governance practices.

  • The profession of internal auditing requires, in its code of ethics, all internal auditors to achieve high standards of quality and to implement continuous improvement in all the practices, products, and services they provide to their customers.

  • Internal auditing can and should contribute to an organization’s TQM policies and programs in the best practices of its independent and objective assurance, consultancy, and teaching roles.


The 1980s and 1990s saw a worldwide increase in the teaching and implementation of quality schemes. Most of these programs focused on economics and customer satisfaction, with controlled processes, key performance indicators, and feedback mechanisms. All involved a need for continuous improvement. All required total commitment. Many evolved from existing quality control and assurance functions, and many were new, established because of regulatory, competitive, or cost pressures.

During this period “quality objectives” in business and public-sector organizations moved into all levels of direction and management decision-making. Strategic plans embraced the need for quality and customer satisfaction, if not delight. Directors of quality appeared on many boards. The results could be seen in a growth of quality cultures and quality system standards, fuelled by many governments and consultants. Competitive national and international quality awards were created to stimulate the development of these cultures. These awards still attract many organizations to quality self-assessment programs and external quality audits across all sectors.

TQM becomes embedded in an organization when quality programs are created by a “total commitment” to quality in all strategies, structures, and systems. Quality gurus across the world have created exciting quality principles, motivating many organizations to adopt TQM practices. These often bring significant benefits, not just for the organization, but also for its customers, suppliers, employees, and all other stakeholders. Best-practice internal auditing achieves high levels of quality in all its services and reviews quality achievements by the organization in all its planning and engagements.

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Further reading


  • Bain, Neville, and David Band. Winning Ways through Corporate Governance. London, UK: Macmillan Business, 1996.
  • Davies, Adrian. A Strategic Approach to Corporate Governance. Aldershot, UK: Gower, 1999.
  • Oakland, John S. Total Organizational Excellence: Achieving World-Class Performance. Oxford, UK: Butterworth-Heinemann, 2001.
  • Oakland, John S. Total Quality Management. Oxford, UK: Butterworth-Heinemann, 1989.
  • Ridley, Jeffrey. Cutting Edge Internal Auditing. Chichester, UK: Wiley, 2008.


  • Chartered Institute of Internal Auditors (UK and Ireland). “Total quality management: The implications for internal audit departments, PBN 1.” 1992.
  • Chartered Institute of Internal Auditors (UK and Ireland). “A quality system manual for internal auditing.” 1993.
  • Chartered Institute of Internal Auditors (UK and Ireland). “Quality assurance and improvement programme.” 2007. [Available to members only].
  • Committee of Sponsoring Organizations of the Treadway Commission (COSO). “Internal control—Integrated framework.” AICPA, 1992.
  • COSO. “Guidance on monitoring internal control systems.” 3 vols. AICPA, 2009.
  • Gupta, Parveen P., and Manash R. Ray. “Total quality improvement process and the internal auditing function.” IIA Research Foundation, 1995.
  • Institute of Internal Auditors (IIA). “Internal auditing in a total quality environment: A reference manual.” 1993.
  • Institute of Internal Auditors (IIA). “International Professional Practices Framework (IPPF).” 2011.
  • IIA UK and Ireland, see Chartered Institute of Internal Auditors (UK and Ireland).
  • International Organization for Standardization (ISO). “ISO 9000 series.” 2010.
  • Oakland, John S., and Mike Turner. “Global sourcing and outsourcing and the pursuit of quality: Dream or nightmare? Three ways for companies to improve.” Oakland Consulting, 2008. Online at:
  • Organisation for Economic Co-operation and Development (OECD). “Principles of corporate governance.” Revised 2004. Online at:
  • Ridley, Jeffrey, and Krystyna Stephens. “International quality standards: Implications for internal auditing.” IIA Research Foundation, 1996.


  • Chartered Institute of Internal Auditors (UK and Ireland):
  • Committee of Sponsoring Organizations of the Treadway Commission (COSO):
  • Institute of Internal Auditors (IIA):
  • International Organization for Standardization (ISO):

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