Three basic evaluation methods exist for any work activity: inspection, compliance auditing and management auditing. The first method, inspection, measures a process's output against certain characteristics. These characteristics, generally identified as form, fit and function, are specified, and the process output either possesses those characteristics or it doesn't. As a result, an inspection's outcome is always binary: pass or fail.

In contrast, compliance audits check on the implementation of written manuals, procedures and work instructions. The compliance audit evolved in the 20th century as business practices became more complex. The first use of compliance auditing appeared in financial transactions, because tax collectors and bank examiners needed assurance that the financial data were correct. This concept of verifying compliance was picked up by the quality profession in the 1960s and applied to the military and the nuclear power industry. Compliance audits are still used in high-risk activities, where there is a desire to verify that the activities are being performed in strict compliance to approved requirements. Third-party registration audits, regulatory inspections and most supplier audits measure compliance. The application of a compliance audit results in stability and assurance that rules are being followed.

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