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The business book, the ultimate resource. Conducting an
internal audit. Voice
activation applied, sorry for typos. To examine
and evaluate the activities to help staff effectively do their
responsibilities. Furnishings
staff, analysis, appraisals, recommendations. Usually
conducted by inside staff member. Why
not outside individual.(let's start a new company). Should be a
continuous process. The
Advantages. Management's
attention will be directed to the key business issues. Gives
management confidence, identifies opportunities for improving, early notice
of potential problems. Disadvantages. Time-consuming,
take managers away, threatening staff members. Checklist. 1. List objectives, relative to assignment. Financial,
how is the money handled. Process and
individuals. Administrative
controls, are they conducted to business.
Commonsense? What systems
are in place, across the department and across the enterprise. Value for money? Know your
priorities. 2. Prepare a detailed brief. Sets detailed
priorities, main issues, portion of time spent per priority. 3. Choose your auditor. 4. Inform your auditor. Brief them. Strategic or
business plans. Standing
orders, goals and memorandums, internal procedure manuals, key personnel,
organizational chart. Verify
communications are clear between parties. Agree on the
objectives of the audit. Agree on a
timetable, plan of action and find out if further information is needed. 5. Identify the key controls to meet audit
objectives. Existing
procedures for controlling the key areas to be examined. 6. Evaluate the controls. Can they be improved. Where is the weakness, or fraud likely to
show. Call into the
system, as a new customer, and verify a successful operation.(nobody does
this,). See No. 7. 7. Test the system. Choose what number of activities or transactions at
random. Trace backwards. What are the
procedures and rules. Do the people
follow them. Degree of compliance. 8. List areas for further investigation. Find areas of
concern that need more thorough investigation. Look at
closely. Increased
timeframe, so exceptions are not the rule. Was it an
exception, or a recurring problem. 9. Consider whether you are getting value for
your money. Has the
market been tested, are the systems working in the most efficient way. 10. Draft a report. All findings,
including recommendations, discuss it with everyone who participated in the
audit. This will
help verifying the auditor has not misinterpreted information or processes. 11. Produce the final report. Should
include an action plan, what areas are requiring strengthening, verify
recommendations are practical, have a timetable, and a time to monitor
progress. Use the knowledge of the
auditor as a guide. That
monitoring process, should be more covered in book. 12. Take action. Act on the findings, monitor actions, changing written
instructions, manuals, procedures, alerting to staff, may be additional
training. The dos. Brief staff
on the benefits of audit. Concentrate
on the high-risk elements identified. Set an action
plan as realistic. Keep staff
informed, especially with positives.
The negatives will come no matter what. Monitor
progress toward action plan. The dont's. Do not rely
on audit as a day-to-day management technique. Don't expect
the miracle cure. Thoughts
starters. Have you
defined the nature and scope of the internal audit. Have you
establish what the system is trying to achieve. Have you
identify the key controls. Are your
staff informed. End of data. |
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