Internal Audit Process Review
Risk’s agenda has to be to unleash potential by mastering risk through strategic enhancement and value creation.
In today’s global landscape, risk management has transcended from a choice to a necessity. As businesses and organizations navigate an ever-evolving terrain, adeptness in identifying and promptly addressing emerging risks is paramount for leaders.
Gradual shift in the role of internal audit
Traditionally, Internal Audit (IA) functions have predominantly concentrated on compliance and internal control systems (ICS). However, offering insights on an organization’s primary risks has not traditionally been a primary focus of IA.
In today’s landscape, a contemporary IA function must grasp the organization’s primary risks and actively pinpoint emerging risks to provide value. This empowers IA to aid the organization in allocating resources efficiently to mitigate risks and advance its strategic objectives further.
To achieve this, IA has to have a profound understanding of the business and operations across all levels of the organization.
Leverage Technology
IA must evolve its methodologies to leverage technology more extensively in audit execution. This not only enhances efficiency in IA delivery but also yields deeper insights into the business, enhancing IA’s perceived value and credibility.
Be conscious of the fact that IA has to go “Beyond Assurance”
IA must be mindful that it cannot only offer assurance but also furnish insights into the business, which can be harnessed to enhance business processes or gain a competitive edge.
How do we help organisations
We assist our clients in the following ways:
- Identify Business Risks: Begin by identifying and understanding the key risks facing the organization. This includes internal and external factors that may impact the achievement of business objectives. Engage with stakeholders across various levels of the organization to gather insights and perspectives on potential risks.
- Assess Risk Impact and Likelihood: Evaluate the potential impact and likelihood of each identified risk on the organization’s objectives. This assessment helps prioritize risks based on their significance and likelihood of occurrence. Consider factors such as financial impact, regulatory compliance, reputation, and strategic alignment.
- Map Significant Accounts: Identify significant accounts, processes, and activities within the organization that are most susceptible to risk or have a material impact on financial reporting or operational performance. This may include key financial accounts, critical business processes, high-value transactions, or sensitive data.
- Develop Audit Plan: Based on the findings from the risk assessment and significant account mapping, develop an Internal Audit Plan that outlines the scope, objectives, and approach for auditing high-risk areas and significant accounts. Prioritize audit activities based on risk severity, materiality, and strategic importance to the organization.
- Engagement Planning: Define the scope, objectives, and timeline of the audit. Identify key stakeholders and determine the resources needed to execute the audit effectively.
- Risk Assessment: Conduct a thorough risk assessment to identify and prioritize key risks facing the organization. Consider both internal and external factors that may impact the achievement of organizational objectives.
- Audit Program Development: Develop a detailed audit program outlining the specific procedures and tests that will be performed to address the identified risks. Customize the audit program based on the organization’s size, industry, and unique risk profile.
- Fieldwork Execution: Execute the audit procedures outlined in the audit program. This may involve conducting interviews, reviewing documentation, testing controls, analyzing data, and performing substantive procedures to assess the accuracy of financial information and the effectiveness of internal controls.
- Documentation: Document the audit findings, including observations, evidence gathered, and conclusions reached. Ensure that audit documentation is clear, concise, and sufficiently supported to withstand scrutiny.
- Communication: Communicate audit progress, findings, and any emerging issues with key stakeholders, including management and the audit committee. Provide regular updates throughout the audit process to ensure transparency and alignment.
- Issue Resolution: Discuss audit findings with management and work collaboratively to develop appropriate action plans to address identified issues. Monitor the implementation of corrective actions and provide ongoing support and guidance as needed.
- Reporting: Prepare a comprehensive audit report summarizing the key findings, observations, and recommendations resulting from the audit. Present the audit report to management and the audit committee for review and discussion.
- Follow-Up: Monitor the implementation of audit recommendations and track progress towards resolution of identified issues. Follow up on outstanding items and ensure that corrective actions are effectively implemented.