IS-BAO Internal Audit Manual - IBAC

1 IS-BAO . Internal Audit Manual International Business aviation Council (IBAC). Suite , 999 University Street Montreal, Quebec, H3C 5J9, Canada Tel 1-514-954-6198 Fax: 1-514-954-6161. IS-BAO . Internal Audit Manual Copyright International Business aviation Council (IBAC). All rights reserved No part of this document may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without the prior permission of IBAC. Operators who have purchased the IS-BAO are granted permission to reproduce this document in whole or in part, for use in their Internal Audit program. IS-BAO Internal Audit Manual International Business aviation Council (IBAC). RECORD OF AMENDMENTS. Number Date Date Entered Entered By 1 January 1, 2005 Included Included 2 January 1, 2006 Included Included 3 January 1, 2007 Included Included 4 January 1, 2008 Included Included 5 January 1, 2009 Included Included 6 January 1, 2010 Included Included 7 January 1, 2011 included included 8 January 1, 2012 Included Included 9 January 1, 2013 Included Included 10 January 1, 2014 included Included January 1, 2014 page - i IBAC All rights reserved IS-BAO Internal Audit Manual International Business aviation Council (IBAC).

2 Page intentionally left in blank January 1, 2014 page - ii IBAC All rights reserved IS-BAO Internal Audit Manual International Business aviation Council (IBAC). LIST OF EFFECTIVE PAGES. Page No. Amendment No. Effective Page No. Amendment No. Effective Date Date I thru viii January 1, 2014 1 thru 90 January 1, 2014. January 1, 2014 page - iii IBAC All rights reserved IS-BAO Internal Audit Manual International Business aviation Council (IBAC). Page intentionally left in blank January 1, 2014 page - iv IBAC All rights reserved IS-BAO Internal Audit Manual International Business aviation Council (IBAC). FOREWORD. This Manual is prepared by the International Business aviation Council (IBAC) and is issued under the authority of the IS-BAO Standards Board. The Internal Audit Manual has been developed for the assistance of operators who have implemented, or are in the process of implementing, the IS-BAO - an International Standards for Business Aircraft Operations.

3 It is designed to provide the operator with a systematic approach to assessing their conformity with the provisions of the IS-BAO . It should be of use to operators in determining their preparedness for an IS-BAO registration Audit and for the development of a process for ongoing assessment of the appropriateness and effectiveness of the safety management activities. The Audit procedures were developed in recognition of proven industrial management auditing concepts. The procedures will ensure that audits are completed consistently and in accordance with a systematic, objective and proven process. January 1, 2014 page - v IBAC All rights reserved IS-BAO Internal Audit Manual International Business aviation Council (IBAC). Page intentionally left in blank January 1, 2014 page - vi IBAC All rights reserved IS-BAO Internal Audit Manual International Business aviation Council (IBAC).

4 TABLE OF CONTENTS. Record of Amendments ..i List of Effective Pages .. ii Foreword ..v Table of Contents .. vi Purpose .. 1. Purpose Statement .. 1. Structure of the Manual .. 1. Definitions and Audit Terminology .. 1. IS-BAO an International Standard for Business Aircraft Operations .. 3. Background .. 3. IS-BAO Standards Board .. 3. Keeping the IS-BAO Current .. 3. IS-BAO Internal Audits .. 4. Internal Audit Programs .. 5. Audit Objectives and Scope .. 5. Audit Principles .. 6. Audit Procedures .. 9. The Audit Standard .. 9. Audit Opening 9. Audit Protocols .. 10. Using the Audit Protocols .. 10. Conducting the Audit .. 10. Determining if an Audit is 11. Judgement and Decision Making .. 11. Closing Meeting .. 12. Evaluating the Operator's SMS .. 13. What is a Safety Management System (SMS)? .. 13. Measuring Safety Performance .. 13. Stages in the Development of a Safety Management System.

5 14. Determining the Objectives of the Evaluation .. 14. Preparations to Evaluate the SMS .. 15. Scoping the Evaluation .. 16. Measuring Soundness, Appropriateness and Effectiveness .. 16. Preparing Audit Findings .. 21. Audit Reports .. 27. Audit Forms .. 29. Appendix A - Auditing Aircraft Management Companies .. 89. January 1, 2014 page - vii IBAC All rights reserved IS-BAO Internal Audit Manual International Business aviation Council (IBAC). Page intentionally left in blank January 1, 2014 page - viii IBAC All rights reserved IS-BAO Internal Audit Manual International Business aviation Council (IBAC). PURPOSE. Purpose Statement The Internal Audit Manual provides guidance operators for the conduct of Internal audits pursuant to the IS-BAO standards established by the IS-BAO Standards Board. Structure of the Manual The IS-BAO Internal Audit Manual consists primarily of standards and protocols for the conduct of IS-BAO audits.

6 Explanatory and guidance material is included where considered necessary for clarity and guidance. Definitions and Audit Terminology The following definitions and explanatory material apply to the IS-BAO auditing processes. Adequate: fulfilling minimal requirements; satisfactory; acceptable; sufficient. Assessment: an appraisal of procedures or operations based largely on experience and professional judgement. Audit : a systematic and objective review of an operator's operations and maintenance framework to verify conformity with IS-BAO standards, and good aviation safety practices. Audit activities: those activities and procedures by which information is obtained to verify the audited operator is in conformity with applicable IS-BAO provisions. Such activities may include, but are not limited to, interviews, observations, inspections and the review of files and documents.

7 Audit conclusion: the outcome of the Audit provided by the auditor after consideration of the Audit objectives and all Audit findings. Audit finding: a problem or cause-and-effect statement, and is accompanied by specific examples of the observed condition. These are significant issues requiring the operator's immediate attention. Findings may relate to one or more non-conformities but should be sufficiently significant to require urgent action. Audit leader: an individual accredited by the accredited auditing organization responsible for the planning and conduct of an Audit , including the production of an Audit report. Audit report: a standardised means of reporting the Audit findings to operators. Closing meeting: a meeting at the end of the Audit , the purpose of which is to brief the client on the Audit findings. Compliance: a product or activity that meets required characteristics and was performed in accordance with the required processes and system requirements.

8 The output of one or more processes and the controls under which the processes occurred. Conformity: meets required characteristics. The fulfilment of a requirement in the IS-BAO . Convening The flight department manager or other responsible manager, who convenes the manager: Internal Audit . Evaluation (SMS): a systematic assessment of the appropriateness and effectiveness of an operator's efforts to manage the safety of the operation. Hazard: the condition or circumstance that can lead to physical injury or damage. Inspection: the basic activity of an Audit , involving examination of the specific characteristics of the operator's systems, procedures, processes and documents. January 1, 2014 page - 1 IBAC All rights reserved IS-BAO Internal Audit Manual International Business aviation Council (IBAC). Non-conformity: the non-fulfilment of a requirement specified in the IS-BAO .

9 Major non- a non-conformity that in itself constitutes a significant risk to the safety of the conformity: operation. Note: A significant risk to safety is any risk identified as moderate or high via the methodologies described in ICAO Doc 9859, Safety Management Manual . Minor non- a non-conformity that does not constitute a significant risk to safety. It may be an conformity: isolated instance of non-conformity, a lack, or error in documentation of a process or procedure that was correctly executed, or a similar instance. Objective evidence: information, which can be proved to be true, based on facts obtained through observation, measurement, test or other means. Objectivity: freedom of bias engendered by the illogic of emotion or prejudice. Operator: A person, organization or enterprise engaged in or offering to engage in an aircraft operation.

10 Procedure: a series of steps followed in a methodical manner to complete an activity what shall be done and by whom, when, where, and how it shall be completed; what materials, equipment, and documentation shall be used, and how it shall be controlled. Process: a system of activities that uses resources to transform inputs into outputs. Product: the end result of a procedure or process. Protocol: a document, which organizes Audit procedures into a general sequence of Audit steps and describes the steps in terms of specified standards or practices to be verified. Quality assurance: that part of the overall management of the IS-BAO Audit program that focuses on providing confidence that quality requirements of the program are being fulfilled. Random sample: sample drawn in such a manner that every possible item has an equal chance to be selected.