What are the factors required to be considered when establish an audit program?
What are the Factors to be considered in Internal Audit Planning Contents
Definition of Auditing:The word ‘Audit’ is originated from the Latin word ‘audire’ which means ‘to hear’. In the earlier days, whenever there is suspected fraud in a business organization, the owner of the business would appoint a person to check the accounts and hear the explanations given by the person responsible for keeping the account and funds. According to Montgomery, a well-known author, “auditing is a systematic examination of the books and records of a business or the organization in order to ascertain or verify and to report upon the facts regarding the financial operation and the result thereof.”
The importance of internal audit planningPlanning the internal audit programme is the key to an effective and efficient internal audit. Effectiveness means attainment of the internal audit objectives and efficiency means conduct of the audit with the maximum utilization of the internal audit resources. Thus planning results in high returns from the exercise, and the low cost of resources deployed. An appropriate internal audit plan enables:
List of qualifications for internal auditorFollowing are the required qualifications of an internal auditor:
Role of internal auditorFollowing are the role of Internal Auditors:
The different stages in internal audit planningThe internal auditing process is essentially comprised of three main stages, namely: 1) Planning: Internal Audit planning is based on an annual cycle that runs in line with each academic year. Each Internal Audit will cover all key activities of the institution at least once and some areas that are considered to be high risk or high priority are often covered more than once. Each summer the Internal Auditors meet with Strategic Planning to plan the internal audit schedule for the academic year identifying the areas for review. Strategic Planning then notifies Colleges and Services about audits involving them in order to try and schedule a time during the year that is most convenient for the audit to take place. 2) Fieldwork: The auditors’ fieldwork concentrates on determining how well a unit is managing the risks identified at the planning stage and what controls are operating to help them do this. This can take a variety of forms that includes interviews and detailed testing/analysis of documents or transactions. When the fieldwork stage is completed, the auditors usually have a list of significant findings that are used to prepare a draft audit report. However, prior to this, the auditors will usually have arranged to discuss any key issues with the nominated audit contact before completion of the fieldwork (see above). We encourage this aspect of the audit as the nominated contact can offer insights and work with the auditors to determine the best method of resolving any issues that arise. 3) Reporting: When the fieldwork is finished, the auditors draft a report. A feedback meeting may be held with the unit to discuss the audit findings, conclusions, and recommendations – the unit can give comments on the findings and reach an agreement on any recommendations identified – before the formal draft report is produced. The formal draft is then sent to Strategic Planning, who coordinates the response to the audit findings prior to the final report being published. Included in the draft is an action plan that identifies the recommendations made in the report and as part of any response, it will be necessary to complete the action plan. This involves explaining how the recommendations will be implemented, by whom, and within what time scale. Dissimilarities between external audit and internal audit
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