Beginning auditor (1)
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Transcript of Beginning auditor (1)
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Beginning Auditor Tools & Techniques
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TopicsTopic Unit
• Understanding Internal audit today
• Internal auditing today
• Understanding organization • Audit Planning• Interviewing
• Performing the work • Process Documentation• Audit Program• Emerging Tools
• Communicate Results • Testing• Reporting• Selling Results
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Internal Auditing Today
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Definition of Internal Auditing
Internal Auditing is an independent, objective assurance, and consulting activity designed to add value and improve an organization’s operations.
Internal Auditing helps an organization accomplish its objectives to evaluate and improve the effectiveness of risk management, control, and governance processes
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Services & Value-added
IA Service▫Quality Assurance▫Coaching/Trainer
- มี�ความีเป็�นอิ�สระ
- มี�ความีเที่��ยงธรรมี
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Core Service- ชื่��ป็ระเด้�น/ข้�อิบกพร#อิง
- ให้�ความีเชื่��อิมี&�น- ให้�ค'าป็ร(กษา
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- ส�บสวนกรณี�ที่,จร�ติ
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Roles of Internal AuditorsRole Appropriat
eInappropriat
e
Provide management with assurance about the design and functioning of controls.
Serve as an internal control advisor to the organization.
Lead system implement projects.
Guarantee that controls are designed appropriately.
Help to revise policies and procedures
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The Audit Model
Planning
Performing
CommunicatingMonitoring
Quality Assurance
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Examples : Audit Model StepsAudit Model Stage Steps
Planning • Review documentation and data• Conduct interviews• Assess risks• Define control objectives• Plan to audit work
Performing • Process Flowchart• Conduct walkthroughs• Testing• Document test results
Communicating • Report on finding and make recommendations.
• Render an overall opinion• Solicit management action plans
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Examples : Audit Model Steps (Cont.)
Audit Model Stage Steps
Monitoring • Monitor the implementation of action plan
Quality Assurance • Survey audit customer• Conduct supervisor reviews• Conduct internal assessment
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Audit Planning
IPPF Mandatory Guidance
2200-Engagement Planning:“Internal auditors should develop and
record a plan for each engagement.”
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Audit Planning : Introduction
OverviewThis unit covers the following topics :•Audit Project Planning•The opening meeting
Objective : To identify the components of an audit project plan.
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Considerations of Audit Project Plan
Consideration•The objectives of the activity being
reviewed.•The significant risks to the activity.•The adequacy and effectiveness of the
activity’s risk-management and control systems.
•Opportunities for making significant improvement to the activity’s risk-management and control systems.
•Audit customer constaints and availability.
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Audit Project Plan
Components
Objective Scope
Why are we auditing this activity?
- What will we review?- What are the boundaries of the
audit?
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Planning Audit ProjectsStages Actions
Understanding of the activity being audited.
• Preliminary survey to determine the objectives, system, apparent risk.
• Discussion with audit customer.• Interviews with individuals affected by the
activity.• Review of management reports.• Review of IA literature relevant to the
activity.• Onsite observations.• Analytical Audit procedures.
Understanding of risks and controls.
• Review or creation of process flowcharts.• Review or creation of process narratives.• Walkthroughs• Document of risk and control.
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Planning Audit Projects (Cont.)
Stages Actions
Project Planning • Development of audit programs• Issuance of engagement letter to the audit
customer.
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Audit Opening MeetingsTypical Objectives
• Define the overall objectives of the audit.• Explain the audit process and the anticipated schedule.• Introduce the team members.• Explain your expectations for responses to information and
data requests (Appropriateness, Completeness, Timely response).
• Gain the audit customer ’s concurrence with your expectation.
Best Practices
• Set agenda• Have the entire audit team present• Aim to build rapport and trust
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Interviewing
“ห้&วใจข้อิง Interviewing ค�อิ การ ”ฟั.ง และ ค�ด้
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Interviewing : Introduction
OverviewThis unit cover how to interviewing is
used within an audit as well as best practices for conducting and documenting interviews.
Objectives To identify the components of
interviews.
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Stages of an interview
Planning
Interviewing
Documenting
Following up
The advance work
The interview itself
The recording of information
The pursuit of related information and the fulfillment of commitments to the interviewee.
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Best Practices for Planning Interviews
•Establish the purpose for interview.•Communicate and share information with
your audit team.•Send advance information:
▫The interview’s purpose.▫The topics to be covered▫The documentation that the interviewee
should provide.▫The anticipated length of the interview.
•Make a list of the topics and related questions.
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Best Practices for Planning Interviews (cont.)
•Decide type of documentation (note or tape recording).
•Gather copies of pertinent reference documents such as prior audit reports, flowchart, etc.
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Best Practices for Conducting Interviews
Begin
• Notifying the interviewee how the interview will be document.
• Checking for understand.
During
• Having a professional, sincere manner.
• Helping the interviewee stay on track.
• Seek permission to continue discussion, or reschedule, if the interview is exceeding its allotted time.
Close
• Asking a capstone question.• Summarizing what the interview
covered.• Review commitments made.• Informing the interviewee of the next
steps.• Thanking the interviewee.• Leaving your contact information.
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Cone System
Opening Question
Probing Question
Closed Questio
n
Use the “Cone” system of questioning to structure your questions on each topic.
• Tell me about, describe, explain, etc.
Start with an
opening questions
• Who? What? When? Where? Why? How?
Continuing with
probing questions
• Do you?, Is it true that?, Would you say that? Etc.
Ending with a
confirm questions
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Interview Practices to Avoid
•Coming into the interview believing you are expert.
•Conveying a “gotcha” attitude.•Asking closed questions except as the final
step in the “cone” system.•Interrupting when the interviewee is
speaking.•Failing to critically assess or independently
verify information provided.•Avoid using leading and double question.
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Active Listening Skill
•Showing interest and giving verbal and non-verbal feedback.
•Letting the interviewee respond fully without interrupting.
•Respecting the interviewee’s responses.•Maintaining appropriate eye contact.
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Best Practices for Documenting Interviews.
• Develop your own note-taking system. Use abbreviations.
• Set up topic in your notes.Before
• Put a question mark (?) in the margin if you need to clarify a point.During
• Reread your notes. Distinguish facts from the opinions or views of the interviewee.
• Complete you notes, preferably within one hour of the interview.
• Write sentence summary.• List document provide by the interviewee.• List document promised or commitments made by the
interviewee.• Have someone else review the interview write-up
After
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Process Documentation
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Introduction
OverviewThis unit covers two forms of process
documentation : narratives and flowcharts.
Objective To identify the common forms used
during process documentation.
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Form in Process Documentation
•Narrative1. Narratives are step-by-step, chronological
descriptions of process or activity, written in sentences.
2. Narratives describe who has responsibility for them.
3. Further, they may explain where the controls are within the process activity.
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Form in Process Documentation
•Flowchart1. Flowcharts are graphic representations of
the chronology or steps within a process or activity.
2. Flowcharts may serve as procedures or work instructions used by those within the audited activity, or they may be created by the auditor.
• Basic Flowchart Shapes Action
Decision
Document
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Walkthroughs
Walkthroughs are designed to confirm or validate process documentation and to identify gaps or errors in the documentation.
Walkthroughs Type1. A process walkthrough2. A shadowing walkthrough3. A transaction walkthrough
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Audit Program
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Introduction
OverviewThis unit covers the way audit work
programs are typically developed and used.
ObjectivesTo identify the components of audit
programs.
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Tailoring Audit ProgramsIPPF Mandatory Guidance2240 : Engagement work programInternal auditors must develop and document work programs that achieve the engagement.
2240.A1Work programs must include the procedures for identifying, analyzing, evaluating, and documenting information during the engagement. The work program must be approves prior to its implementation, and any adjustments approved promptly.
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Tailoring Audit Programs (cont.)To development of audit programs, the auditor must record conclusions about the control activity as the following:1. Is the control a key control?2. Is the control adequately designed?3. Will the control be test during audit?4. Is the control operating as intended?
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Tailoring Audit Programs (cont.)General Activity•Review the audit programs, if any, from
prior audits.•Confirm the objectives of the activity with
the audit customer.•Tailoring audit programs.•Document supervisory approval
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Audit Program Characteristics•Indicate the relative priority of the work
steps, and allot time accordingly.•Include positive and clear instructions in
the work steps.•Incorporate flexibility, and permit auditor
initiative and judgment in deviating from prescribed procedures.
•Include only what is needed to perform the audit work
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Audit Program Components
•Audit objective•Audit scope•Audit program test steps, with testing
objective for each test step.
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Emerging Tools
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Introduction
OverviewThis unit covers emerging software
tools for automating the audit process.
Objective To identify emerging tools that
automate the audit process.
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Overall Considerations for Audit tools
•Which software, which version is appropriate for your organization and your internal audit activity?
•What are the system-implementation considerations?
•Which tools will add the greatest efficiency?
•What fits your budget?•What is the learning time, and what is the
availability of training?
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Examples ToolsActivity Tools
Electronic Working Paper • Idea• Team Mate (PWC)
Data analysis and Data Extraction • ACL• Idea• Microsoft Access
System Security • ACL• Idea• Tripwire
Continuous Monitoring Tools • SAP
Control Self Assessment Tools • Option Finder
Survey Tools • Zoomerang TM• Survey Monkey• Web Surveyor
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Testing
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Introduction
OverviewThis unit covers the requirements for
audit evidence and the methodologies used to gather that evidence.
Objective To identify the methods for obtaining
and presenting audit evidence.
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Standard for Audit Evidence
Sufficient Reliable
Relevant Useful
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Analytical Procedures
Analytical procedure should be used to examine and evaluate information to develop and support audit conclusion
Comparison
Relationship
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Sampling
“ Confidential level is high when sampling size is large.”
•Statistic sampling : Mathematically•Judgmental sampling : Base on Professional
assessment•Random sampling : Every item in data set
has an equal chance of being selected
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Testing
Attribute Testing•An attribute is indicates a control is
operating.•A deviation is the absence of the desired
attribute.
Variable Testing•Variable testing is used to reach a
conclusion, expressed in units.
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Documentation of Test ResultSection Content
Heading • Audit Title• Audit Number• Scope area• Date on which working paper was completed• Work paper no.
Objective • The Testing objective
Method • Sample selection method• Testing Method• Data source
Result • Detail result of the test
Summary • Summarized result
Conclusion • Testing conclusion reached on the testing objective
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Documentation of Test Result (cont.)
Section Content
References • Cross References to related documents
Noted • Any additional explanations needs
Name • Auditor’s name
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Reporting
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Introduction
Objective To identify the process to report audit
finding.
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Component of Audit Reporting
Criteria Conditions Causes EffectsRecommen
d/Action Plan
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Selling The Result
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Best Practices for Exit Conferences
Purpose1) To minimize misunderstandings.2) To clarify the audit results.3) To allow the audit customer to express
their opinion.
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Best Practices for Exit Conferences (cont.)
Best Practices1) Ensure that the right people attend.2) Provide the necessary document.3) Set agenda and manage the meeting.4) Explore an resolve as many issues as
possible.5) Provide clear messages.6) Thank the audit customer for
cooperation.7) Hold a post-meeting debriefing with the
audit team.
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Wrap-up Activity
•Working paper clean-up and review•Performance appraisal•Audit customer survey
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Monitoring Activity
•Follow-up on audit customer issues•Tracking of issues to closure of action
plans
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Best Practices for Monitoring
•Decide on what to monitor based on risk•Be open to management requests for
consulting related to closing issues•Make management responsible for
updating progress made, with internal audit responsible for verification that issues are closed.
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Thank You For Your Participation