How To Conduct Effective Internal Audits
Internal audits are critical in any business not just to comply with standards the business have in place but also to ensure the company is providing a good service, meeting legal requirements, reducing waste, increaseing profits, also a clear outline of the internal audit process can help engage stakeholders and manage expectations along the way
1 – GET TO KNOW THE BUSINESS
REVIEW:
· Financial reviews
· Business and process documentation
· Meaning of industry specific terms
· Risk inherent in business activities
2 – CONDUCT INTERVIEWS AND RESEARCH
UNDERSTAND:
· Who the stakeholders are
· Incentives for risk taking
· Current and anticipated business changes
· Financial/transaction significance trends
· Current control environment: resources, systems, processes, policies, and cultural changes
3 - ASSESS CONTROL ENVIRONMENT
ESTABLISH:
• Staffing
• Regulatory obligations
• Regulatory reporting
• Risks due to strategy, physical environment, IT, financial crime, fraud, financial exposures and customers
4 - DEFINE INTERNAL AUDIT CHARTER
OUTLINE:
• Responsibilities
• SLAs
• Expectations
• Methodology
• Audit Universe
5 - DEVELOP INTERNAL AUDIT PLAN
DOCUMENT:
• Risk-based priorities
• Resource requirements
6 - EXECUTE INTERNAL AUDIT PLAN
CONDUCT:
• Kick off meeting
• Activities within agreed scope
• Work on time and on budget
• Issue identification and validation
• Issue tracking
• Audit progress and issue updates for auditees
7 - GATHER FEEDBACK FROM STAKEHOLDERS TO IMPROVE SERVICE DELIVERY
8 - KEEP UP TO DATE WITH BUSINESS AND REGULATORY NEWS
UPDATE RISK ASSESSMENT AND INTERNAL AUDIT PLAN
IDENTIFY POTENTIAL IMPROVEMENTS
9 - CONCLUDE AUDIT, ESTABLISH REMEDIAL ACTION PLANS AND ISSUE REPORT
CONCLUDE:
• Closing meeting
• Action planning
• Draft report
• Reviews
• Distribution of final report
• Audit performance review
• Audit certification & follow up
I hoped you found this brief article helpful, please remember this is advice for general audits and some companies may not allow you access to all the information listed, in this case you would have to try and research with external sources for example companies house for financial records etc, always remember never to exceed your authority when auditing, if anyone has any questions on internal audit programmes or needs assistance in building the documents, please feel free to email me Craig@CAWConsultancy.co.uk
1 – GET TO KNOW THE BUSINESS
REVIEW:
· Financial reviews
· Business and process documentation
· Meaning of industry specific terms
· Risk inherent in business activities
2 – CONDUCT INTERVIEWS AND RESEARCH
UNDERSTAND:
· Who the stakeholders are
· Incentives for risk taking
· Current and anticipated business changes
· Financial/transaction significance trends
· Current control environment: resources, systems, processes, policies, and cultural changes
3 - ASSESS CONTROL ENVIRONMENT
ESTABLISH:
• Staffing
• Regulatory obligations
• Regulatory reporting
• Risks due to strategy, physical environment, IT, financial crime, fraud, financial exposures and customers
4 - DEFINE INTERNAL AUDIT CHARTER
OUTLINE:
• Responsibilities
• SLAs
• Expectations
• Methodology
• Audit Universe
5 - DEVELOP INTERNAL AUDIT PLAN
DOCUMENT:
• Risk-based priorities
• Resource requirements
6 - EXECUTE INTERNAL AUDIT PLAN
CONDUCT:
• Kick off meeting
• Activities within agreed scope
• Work on time and on budget
• Issue identification and validation
• Issue tracking
• Audit progress and issue updates for auditees
7 - GATHER FEEDBACK FROM STAKEHOLDERS TO IMPROVE SERVICE DELIVERY
8 - KEEP UP TO DATE WITH BUSINESS AND REGULATORY NEWS
UPDATE RISK ASSESSMENT AND INTERNAL AUDIT PLAN
IDENTIFY POTENTIAL IMPROVEMENTS
9 - CONCLUDE AUDIT, ESTABLISH REMEDIAL ACTION PLANS AND ISSUE REPORT
CONCLUDE:
• Closing meeting
• Action planning
• Draft report
• Reviews
• Distribution of final report
• Audit performance review
• Audit certification & follow up
I hoped you found this brief article helpful, please remember this is advice for general audits and some companies may not allow you access to all the information listed, in this case you would have to try and research with external sources for example companies house for financial records etc, always remember never to exceed your authority when auditing, if anyone has any questions on internal audit programmes or needs assistance in building the documents, please feel free to email me Craig@CAWConsultancy.co.uk
