![]() ![]() Audit reports should be a representation of the events and transactions that have taken place. Be sure also to mention things that are working well in audit reports. 4) Write balanced audit reportsĪudit reports that only include deficiencies and problems are sure to provoke the ire of process owners. Documenting events will help reduce tension since auditors will have evidence to substantiate, authenticate, and prove the findings raised in the audit. ![]() Proper documentation is critical to the audit work as it is the only evidence of the work done. The auditor should clarify matters that are raised as a finding by writing to the auditee to respond to them before including them in the audit reports. It's also vital to provide auditees the chance to make clarifications to assumptions gained during fieldwork. It's essential to be thorough in this information gathering, but internal auditors should also use what doctors would call, "good bedside manner." Show appreciation for the auditee's schedule and work to create as little disruption as possible. ![]() Interviews, inquiry, and observation are used to understand the audit environment, regulatory environment, and activities carried out by the auditee. 3) Use care during fieldworkĭuring the audit process, the internal auditor uses interviews as one of the instruments to solicit information. The entry conference opens the door for the management or the auditee to ask questions and get responses that can help settle any misunderstandings, which in the long run will reduce or prevent tension between the internal audit and the auditee. It also provides an opportunity to hear again any concerns the audit clients have so they can be addressed early, before they develop into points of contention. This is one of the avenues to educate managers on the purpose of the audit assignment. Besides conveying the goal of adding value, it is the means to outline the audit plan and audit program to the auditee. An entry conference provides an opportunity for the audit team to explain the key audit thrust areas to the auditee to add value to the entity or auditee operations and not to act as a detective to find faults with the auditee. The opening conference is the initiation of the audit work or the internal auditor's formal introduction to the client. A copy of the audit plan should then be made available to the auditee to prepare them for the audit assignment. Not only does it increase the transparency of the audit process, but it also lessens the idea that an outsider is coming in to look over someone's shoulder. Typically, managers will be far less critical of a process that they had a hand in developing. Accepting input from the auditee will reduce or eliminate tension elements as they are aware of what the audit is to do at their function or process to improve the system. ![]() This will bring about mutual understanding on the scope of the audit. For effective execution of an audit, it becomes imperative that internal audit involves the audit client in the audit planning. The audit plan is the framework for the performance of audit work. 1) Involve auditees in audit plan development Here are nine measures to manage tension with auditees during audit assignments. Indeed, by using a few strategies to manage tension and involve audit clients in the planning and decision-making process, internal auditors can keep those tensions to a minimum. While some conflict may be unavoidable, internal audit doesn't have to have a strained relationship with the managers of functions and processes it audits. Internal audit's unique relationship with the audit committee Inequitable distribution of resources to the internal audit unitĭisclosure of risks to the audit committeeĭisputed ratings and opinions of the internal audit The process of expressing an opinion on the client's operations, financials, and controls unavoidably leads to a certain amount of conflict or tension between the internal auditor and the auditee or audit client.Īccording to Richard Chambers, president and CEO of the Institute of Internal Auditors, tension between internal audit and management can arise from the following: This role is unique because the internal auditor is an agent that monitors other managers' actions who are employed by the same organization. Internal audit's role is to provide independent assurance that an organization's risk management, governance, and internal control processes are operating effectively. As the saying goes, "you can't make an omelet without breaking a few eggs." It's likely an expression internal auditors have heard or even used themselves to characterize the tension that can result from auditing a particular function or process. ![]()
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