3 September 2014 SonaliRaut, CA, CISA DGM-Internal Audit ... Webin… · Reporting responsibilities...
Transcript of 3 September 2014 SonaliRaut, CA, CISA DGM-Internal Audit ... Webin… · Reporting responsibilities...
� Role and responsibility of Internal Audit
� Sharing of best practices◦ Model of operation
◦ In conduct of audit assignment
◦ Other functions of audit◦ Other functions of audit
� Conduct of meetings
� Actionables tracking
� Reporting to Audit Committee
� Team engagement
� Thoughts on best practices
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� Reporting responsibilities to Audit Committee and management◦ Companies Act, 2013
◦ Institute of Internal Auditors
� Conduct and timely completion of audits� Conduct and timely completion of audits
� Organisational set-up of the function
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� Adopt co-sourcing model instead ofoutsourcing
� Participation of Chief Internal Auditor (CIA)◦ in Closing meeting of every audit assignment
◦ Reports issued under CIA signature◦ Reports issued under CIA signature
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� Planning
� Scheduling
� Execution ◦ Pre-audit
◦ Field work◦ Field work
� Closing of assignment
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� Risk based Annual Audit Plan
� Based on inputs sought from◦ Audit Committee from time-to-time
◦ Business unit heads
◦ Chief Finance officer (CFO)◦ Chief Finance officer (CFO)
◦ Statutory auditors
◦ Past audit reports
� Circulation of annual calendar to all businessunit heads and CFO
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� Communicate commencement and closingdates of audit well in advance◦ at least 10-15 working days in advance
◦ Recipients-direct auditees, regional heads, CFO
◦ Areas to be covered in audit◦ Areas to be covered in audit
◦ Audit objective and scope
� Model the number of days for pre-audit, fieldwork and review
� Circulation of day wise audit schedule
� Mock closing meeting
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� Pre-audit◦ Walkthroughs with auditees
◦ Rounds of discussion of audit objective, scope andchecklist
◦ Procuring data from auditees for analysis andsample selectionsample selection
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� Field work◦ Should start with an Opening meeting◦ Continuous interaction for sharing and resolving ofqueries with auditees◦ Continuous internal reviews with agreed timelines◦ Draft report circulation◦ Mock Closing meeting◦ Mock Closing meeting� Discuss observations� Seek draft management response◦ Pragmatic recommendations◦ Seek management responses in writing◦ Specific Action Plan and target date◦ Final Closing meeting◦ Release final report within 15 days of Closing meeting◦ Documentation
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� Time bound and meeting invites for blockingof calendar
� Presentation-focused, crisp and engaging
� Feedback sessions◦ Auditees-on areas for improvement◦ Auditees-on areas for improvement
◦ Auditor-Give feedback to auditees
◦ Internal with team
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� Track target dates for actions taken andreport status to Audit Committee on halfyearly basis
� Compliance testing during the next audit andhighlight deviations, if anyhighlight deviations, if any
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� At least two Audit Committee meetings in ayear exclusively for discussion of internalaudit agenda
� Report significant audit findings� Advance review with management team ofpresentations to be madeAdvance review with management team ofpresentations to be made
� Papers of agenda sent at least a week inadvance
� Effective time management� Systematic follow-up on actionables of allaudit findings
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� Retention of talent◦ Monthly meets of the team◦ Declaring a best performer of the month
� Encourage participation of team in the meets eg. presentation on topics of interest, academic or of professional interestacademic or of professional interest
� Annual off-site meet� Performance appraisal◦ Measurable goals◦ Appraisals are based on empirical data captured foreach assignment
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� Some other good practices could be:� Use of tools for statistical sampling
� Rotation of high fliers in organisation
� Development of auditing and soft skills
� Involvement of audit team in process improvements
Continuous review and revisit of the internal � Continuous review and revisit of the internal audit practices adopted is the key
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