The Audit Process

Internal Audit projects are generally broken down into four phases: Planning, Fieldwork, Reporting, and Follow Up

Planning

During the planning phase, the auditor gains a thorough understanding of the unit or process in order to develop a specific audit plan and scope. The understanding is gained through:

  • Interview with the director
  • Questionnaires
  • Review of the policies and procedures manual
  • Review of any previous audit reports

The Director or department head will be notified of the audit and an entrance meeting will take place to discuss the following:

  • The scope and objectives of the audit
  • Risks and other concerns
  • The audit report process
  • The time frame for the audit.
  • Any requests for information such as org charts, policies and procedures manual, etc.

Fieldwork

The fieldwork phase consists of several steps:

  • Interviews with staff to document their functions and operations
  • Identifying controls relative to the audit objectives
  • Testing the controls
  • Transaction testing
  • Analysis of results
  • Other analytical procedures

Audit Findings – The auditor will communicate any issues identified, validate the findings, and partner with management to develop suitable solutions.

At the conclusion of fieldwork, the auditor will hold an exit meeting with the Director or department head to discuss the audit results. This is an opportunity to help the auditor better understand any results that require more context or to explain those that may have been misinterpreted. The auditor and client will achieve a consensus regarding the accuracy of the audit observations and the facts pertaining to the data.

Reporting

During the reporting phase, communication takes place in multiple ways:

  • Draft Report –The results of the audit are compiled, presented, and discussed with management, along with recommendations.
  • Management Response – Within 10 days, management provides a response to each audit finding that details what is to be implemented to resolve the finding and includes an expected completion date.
  • Final Report – This is a combination of the draft report and management response that is distributed to the area audited, the area’s Vice President, the Vice President for Financial and Accounting Services, the Director of Accounting and Financial Services, and the President. Final reports are also available to the Board of Regents upon request. 

Follow Up

Internal Audit will review the status of the corrective actions taken. A report of the present status will be issued to all recipients of the original audit report. If necessary, Internal Audit will continue to follow up on corrective actions taken until they have been addressed in a satisfactory manner.