Our principal product is the final report in which we express our opinions, present the audit findings, and discuss recommendations for improvements. They are comprehensive and serve many functions. They connect the client’s accounting records and financials to the auditor’s opinion. They are the support of the audit opinion. Working papers are a vital tool of the audit profession. Upon completion of the fieldwork, the auditor summarizes the audit findings, conclusions, and recommendations necessary for the audit report discussion draft. However, in more complex situations, memos and/or e-mails are written in order to ensure full understanding by the client and the auditor. Hopefully, the client can offer insights and work with the auditor to determine the best method of resolving the finding. Various techniques including sampling are used during the fieldwork phase.Īs the fieldwork progresses, the auditor discusses any significant findings with the client. These procedures usually test the major internal controls and the accuracy and propriety of the transactions. The fieldwork stage concludes with a list of significant findings from which the auditor will prepare a draft of the audit report.Īfter completing the preliminary review, the auditor performs the procedures in the audit program. It is during this phase that the auditor determines whether the controls identified during the preliminary review are operating properly and in the manner described by the client. The fieldwork concentrates on transaction testing and informal communications. This program outlines the fieldwork necessary to achieve the audit objectives. Preparation of the audit program concludes the preliminary review phase. Click here for an annual internal control review plan. The review of internal controls helps the auditor determine the areas of highest risk and design tests to be performed in the fieldwork section. In doing this, the auditor uses a variety of tools and techniques to gather and analyze information about the operation. The auditor will review the unit's internal control structure, a process which is usually time-consuming. S/He talks with key personnel and reviews reports, files, and other sources of information. In this phase the auditor gathers relevant information about the unit in order to obtain a general overview of operations. It is important that the client identify issues or areas of special concern that should be addressed. The internal auditor meets with the senior officer directly responsible for the unit under review and any staff members s/he wishes to include. This letter communicates the scope and objectives of the audit, the auditors assigned to the project and other relevant information.ĭuring this opening conference meeting, the client describes the unit or system to be reviewed, the organization, available resources (personnel, facilities, equipment, funds), and other relevant information. The client is informed of the audit through an announcement or engagement letter from the Internal Audit Director. Following is a sample flowchart of the process that you may find helpful:ĭuring the planning portion of the audit, the auditor notifies the client of the audit, discusses the scope and objectives of the examination in a formal meeting with organization management, gathers information on important processes, evaluates existing controls, and plans the remaining audit steps. One of the key objectives is to minimize this time and avoid disrupting ongoing activities. As in any special project, an audit results in a certain amount of time being diverted from your department's usual routine. Client involvement is critical at each stage of the audit process. Audit ProcessĪlthough every audit project is unique, the audit process is similar for most engagements and normally consists of four stages: Planning (sometimes called Survey or Preliminary Review), Fieldwork, Audit Report, and Follow-up Review. If you have tools or resources that you would like added to these pages please send them to here for sample documents used in the audit process.įor a brief overview including a summary of types of audits click here. It also is designed to provide a resource for sharing tools and techniques for each of the distinct phases of the audit process. The purpose of providing this page is for those audit organizations that have not explained to their clients how, in general, the audit process works. I see quite a few audit organizations that include a Web-based explanation to their clients how the audit process works. Every successful audit is based on sound planning and an atmosphere of constructive involvement and communication between the client and the auditor.
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