Audits protect your company from fraud and negligence. They also identify performance improvements and verify the accuracy of your financials.
An internal audit is conducted by members of the same organization or business, and an external audit may be conducted by a regulatory agency or governmental agency.
There are six specific steps in the audit process that should be followed to ensure a successful audit. Requesting Documents After notifying the organization of the upcoming audit, the auditor typically requests documents listed on an audit preliminary checklist.
These documents may include a copy of the previous audit report, original bank statements, receipts and ledgers.
In addition, the auditor may request organizational charts, along with copies of board and committee minutes and copies of bylaws and standing rules. Preparing an Audit Plan The auditor looks over the information contained in the documents and plans out how the audit will be conducted.
A risk workshop may be conducted to identify possible problems. An audit plan is then drafted. Scheduling an Open Meeting Senior management and key administrative staff are then invited to an open meeting during which the scope of the audit is presented by the auditor.
A time frame for the audit is determined, and any timing issues such as scheduled vacations are discussed and handled. Department heads may be asked to inform staff of possible interviews with the auditor.
Conducting Fieldwork The auditor takes information gathered from the open meeting and uses it to finalize the audit plan. Fieldwork is then conducted by speaking to staff members and reviewing procedures and processes.
The auditor tests for compliance with policies and procedures. Internal controls are evaluated to make sure they're adequate. The auditor may discuss problems as they arise to give the organization an opportunity to respond.
Drafting a Report The auditor prepares a report detailing the findings of the audit. Included in the report are mathematical errors, posting problems, payments authorized but not paid and other discrepancies; other audit concerns are also listed.
The auditor then writes up a commentary describing the findings of the audit and recommended solutions to any problems. Setting Up a Closing Meeting The auditor solicits a response from management that indicates whether it agrees or disagrees with problems in the report, a description of management's action plan to address the problem and a projected completion date.
At the closing meeting, all parties involved discuss the report and management responses. If there are any remaining issues, they're resolved at this point.Online shopping from a great selection at Books Store. 11 The nature of further audit procedures refers to their purpose (tests of controls or substantive procedures) and their type, that is, inspection, 4 Audit procedures performed for the purpose of assessing risk (risk assessment procedures) are discussed in paragraphs through of section Finally, as part of Internal Audit's self-evaluation program, we ask clients to comment on Internal Audit's performance.
This feedback has proven to be very beneficial to us, and we have made changes in our procedures as a result of clients' suggestions.
An audit procedure is a systematic, methodical technique that enables a corporate reviewer to assess the adequacy of operating policies and production mechanisms.
Review procedures require a combination of investigation skills and accounting acumen that auditors generally possess after years of .
Attendance & Leave Audit Procedures Page | 1 Questions () Attendance & Leave Audit Procedures Rev/ Goal: To educate leave coordinators on how to execute the business processes as they apply to leave audits and timesheets.
Resources: University Attendance and Leave Administrator. Audit procedures are an important area of the syllabus, though candidates often use inappropriate audit procedures to answer questions. The following tips will help you to understand the concepts and write appropriate audit procedures.