IA REPORT.docx - UNDERSTANDING AND PLANNING AUDIT...

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UNDERSTANDING AND PLANNING AUDIT ACTIVITIES INTRODUCTION The Definition of internal auditing clearly states that internal audit activity helps an organization accomplish its objectives by bringing a systematic, disciplined, approach to evaluate and improve the effectiveness of risk management, control, and governance processes. As such, the internal auditing process may be divided into four major categories based on internal auditing standards. 1. Engagement Planning 2. Performing the Engagement 3. Communicating the Results 4. Monitoring Progress (not typically performed in an external audit) PLANNING/DESIGNING AN AUDIT In and engagement, planning play is a vital role in achieving the objectives of such engagements consequently, poor planning will result in: 1. Failure to achieve audit objectives 2. Audits that are insufficient in scope with unidentified risk 3. Make inefficient use of resources EXTENT OF PLANNING The extent of the audit planning process depends on the nature and complexity of the engagement. If it is the first time a specific area has been audited, more time will be required in the planning process to address variety of unknown element. If the area has been audited in the past, time must be set aside to ensure that there have been no major changes in the structures and controls during the interim. NATURE OF PLANNING Planning is a continuous process, covering both annual planning for the audit function as whole and planning of the individual audit. As such, the plan should be looked on as provisional and should be continuously reviewed by the internal auditor to identify any modification required to bring the same in the line with changes, if any, in the audit environment. PURPOSES OF PLANNING To establish objectives and scope of the engagement. To assist in the direction and control of audit work. To help ensure that attention is devoted to critical aspects of the audit work. To help ensure that work is completed in accordance with pre-determined targets. To help ensure that skills and time of the staff are appropriately utilized. To ensure that auditors and management share the same agenda and each engagement adds value to the client. To ensure that the skills and time of the staff are appropriately utilized.
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PLANNING CONSIDERATIONS IIA Practice Advisory for Engagement Performance Standard 2201 enumerates the following: 1. The objectives of the activity being reviewed and the means by which the activity controls its performance.
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  • Spring '15
  • sia
  • Financial audit

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