Company Confidential Registration Management Committee 1 Asking the Right Questions Right Dale Gordon Aerojet Rocketdyne July 16, 2014

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RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 3 Appearance Matters

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 4 APPEARANCE - FORMALITY OF THE AUDIT PUNCTUALITY - DO NOT WASTE AUDITEE TIME PREPAREDNESS - CRITICAL TO SUCCESS FAIRNESS - BE UNDERSTANDING OF ERRORS CALM - AUDITOR CAN SET THE TONE POLITE AND COURTEOUS - BE POSITIVE DIRECT AND CONCISE - DON’T INTERROGATE COMMUNICATION - ORAL, WRITTEN, BODY OBSERVANT - ATTENTION TO DETAIL LISTENING - PAY ATTENTION Be Professional

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 5 Know Your Customer

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 6 Remember Who You are Auditing: METHODS –OPEN ENDED QUESTIONS –PROBING - TELL ME MORE –SILENCE - IS GOLDEN –PARAPHRASING - RESTATEMENT CROSS CHECK WITH OTHERS SUPPORT WITH DOCUMENTATION / RECORDS CLOSE WITH STATED POSITION - OKAY OR NO

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 7 What’s the Risk?.

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 8 WEIGH THE CONSEQUENCES Risk may go undetected, or even increased by the application of insufficient, inadequate, or incapable resources including: Designs, Personnel, Time Equipment / tools Processes or Materials, Plans, instructions Inspections / tests Workspace and environment Others ?

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 9 ALLOW FOR MULTIPLE SOLUTIONS Risk may be controlled, reduced or eliminated by use of: Root Cause Analysis, Corrective and/or Preventive Action Design enhancement / redundancy Improved processes capability Fool-proofing / mistake-proofing Increased / improved detection methods Protective margins / buffers Back-up / contingency plans Advancing the “state of the art”

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 10 Prior Enterprise Business Model Customer Support Pack & Ship & Replace ENGINEERING Help Sell it & DESIGN IT! MANUFACTURING & PROCUREMENT MAKE IT BUY IT QUALITY MAKE SURE IT LOOKS LIKE THE PRINT! MARKETING SELL IT! Customer & Regulatory Requirements

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 11 CONSIDER BUSINESS PROCESSES Plan the Business Resource the Business Generate Orders Fulfil Orders Resolve Customer Problems Create Customer Solutions Build Customer Relationship

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 12 JUST THE FACTS FOCUS ON THE CONTROL SYSTEM NO RECOMMENDATIONS NO SUGGESTIONS NO BIAS NO INSPECTING OVERALL CONCLUSIONS

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee The Report Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. 13

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee The Report An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 14

RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee The Report Conclusion Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ABC Company, Inc. as of December 31, 20XX, and the results of its operations and its cash flows for the year then ended in accordance with U.S. generally accepted accounting principles. 15

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RMC Workshop Long Beach, CA 16 – 17 July 2014 Registration Management Committee 17 Aerospace Markets

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