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A Toolkit for Responsible Businesses
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The Audit Team

Personnel

Your social compliance team consists of your social compliance staff at headquarters, as well as the personnel in the field coordinating and/or carrying out audits.  For companies with an internal audit program, the audit team members are company employees; for companies that use external auditors, the audit team members are comprised of hired auditors from outside entities (whether for-profit or non-profit firms).  Some companies use both internal and external auditors, depending on the sector or location of the facility.

All three of the auditing approaches below can be reliable and credible, as long as they are well-managed by your social compliance team and operate within the framework of a comprehensive social compliance program.  However, each approach has certain advantages and disadvantages.  Click on the terms below to learn more:

  • Internal auditors
  • Internal auditors are company employees who are trained in the skills and competencies of social auditing.  One advantage to using internal auditors is that they are likely to be easier to communicate with; for example, if there are changes in policy, it is easier to ensure consistency among your own staff than with hired external auditors.  Internal auditors also may have a deeper understanding of the company’s full social compliance program and may be able to make contributions to it beyond auditing.  On the other hand, since internal auditors are company employees, some stakeholders are likely to question the credibility of their findings.  In addition, if internal auditors are not local to each location of sourcing, they may lack some understanding of local conditions and also not be able to provide appropriate follow-up support to each facility.

  • External auditors
  • External auditors are audit professionals with defined skills and competencies, employed by social audit firms outside your company.  They are a flexible workforce and may be available in geographic locations where it is not cost-effective for your company to maintain internal auditors.  On the other hand, since external auditors are also paid by the company to do audits, some stakeholders may still doubt the credibility of their audit findings.  In addition, some external audit groups may have their own systems in place that cannot be fully adapted to match your company’s own protocols or parameters.

  • Independent auditors/monitors
  • Independent auditors/monitors are audit professionals accredited by institutions or mechanisms; their role is to ensure that auditing takes place while eliminating any direct financial transaction between the company and the auditor.  Typically, a company pays a separate, independent institution for auditing services, and/or for membership in that body. The institution accredits auditors under its established standards and is responsible for scheduling and oversight of all audits.  While this is designed to increase the credibility of the audit, in some sectors or geographic locations, this type of arrangement may not be available.  In addition, even without a direct financial transaction, some stakeholders may still have concerns about the degree of an auditor’s independence from the audited entity.  Varying degrees of independence exist, and independence ultimately needs to be judged on a case-by-case basis.

If your company opts to use internal or external auditors, it may be necessary to engage independent entities for certain roles within your social compliance system if you wish to ensure maximum effectiveness and credibility.  See Step 7, Independent Review for a larger discussion of independent monitoring and verification.

Auditor Competencies

Whether internal, external or independent, all auditors must possess specific skills and knowledge in order to carry out audits effectively.  In the past few years, several organizations have made efforts to formalize and document the standard skills and knowledge that an auditor should possess.  Necessary knowledge includes a detailed understanding of international labor standards, industry production environments and processes, and local cultures and languages. 

Two widely used standards for the social auditing profession are below:

In addition to these general competencies, it’s important that auditors also be trained in specific protocols for handling sensitive situations involving children and/or adult victims of egregious exploitation.  Auditors should be prepared to interact with children and take measures on behalf of children that are age appropriate.  Procedures should also be in place to ensure that both children and adult victims of egregious forced labor receive immediate care and services from qualified individuals or organizations.

Team Composition

The size and composition of an audit team depends on the size and type of facility to be audited, the number of workers in the facility, and the nature of the workforce, including the languages and cultural composition of the workers.  If the facility is large and a variety of languages are spoken, auditors who speak every language must be available.  Gender of the workers is also an important consideration; for example, it normally is preferable for women to be interviewed by a woman in order to facilitate more comfortable discussions about issues such as sexual harassment.

Many companies prefer to recruit auditors from the countries where they will perform audits.  There are advantages and disadvantages to this approach.  On the positive side, they know the culture, language and customs of the country, and hiring local auditors also contributes to sustainable local capacity-building.  On the negative side, local hires can be more susceptible to influence, intimidation, family pressures, bribery and even safety concerns.

The team leader should ensure that the team functions interactively.  Because violations can often be subtle, or deliberately concealed from auditors, the team should not simply divide up work responsibilities; in many cases, more than one auditor should examine the same issues, and the team should come together to assess findings and ensure that connections and patterns are identified.  The team should collectively agree on the final audit findings.

Example In Action

Better Work Assessment Teams

Better Work has several regulations in place for evaluation teams, requiring two “enterprise advisors” [auditors] to be present for each assessment.  Better Work advisors are hired locally and receive extensive training.  A new advisor is always paired with a more experienced colleague, and no two advisors are paired on consecutive visits to a particular factory.  In many cases, advisors conducting assessments for a particular factory are not responsible for providing additional advisory services to that factory.  

For more information, see Better Work’s Services Fact Sheet.

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