Term
| What are some natures of findings |
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Definition
- Sometimes called deficiencies
- Has a negative connotation
- Sometimes called conditions
- Do not want invoke a defensive attitude |
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Term
| What does Standard 2310 state? |
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Definition
- Internal Auditor should identify sufficient, reliable, and relevant info to achieve engagement objective
- Results should include observations and recommendations
- Should be factual and unbiased
-Clarity is important |
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Term
| What should be considered when deciding if a defect should even be reported? |
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Definition
- significance
- Factual
- No bias
- Can be resolved
- Convincing enough to compel actions |
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Term
| How do you "add value" to state your findings? |
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Definition
- clear positive impact on organization
- Finding before a system is implemented far better than after implementation
- Hard dollar recoveries |
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Term
| What should you remember about something that is "insignificant?" |
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Definition
1) ex. clerical error - the happen
2) Should not be overlooked, but not dwelled on
- discuss with the responsible person
- see that situation is corrected
- not in working paper
- keep out of audit report |
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Term
| What should you remember about MINOR findings? |
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Definition
- Requires reporting as it usually is more than human error
- will continue to have adverse effect if not addressed
- Can be addressed in Management letter
- Ie: Misuse of Petty cash. misuse of expense reports |
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Term
| What should you remember about MAJOR findings? |
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Definition
- these are findings that would prevent organization from meeting objectives
- Ie: errors in payments, credit limits extended even though payments on account are not being made
- Must be reported and addressed quickly |
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Term
| What are the 2 key elements for reporting findings? |
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Definition
1) Goals and objectives: may be why management wanted the audit to begin with
2) Quality of the accomplishment |
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Term
| What should be the CONDITION of the report findings? |
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Definition
Heart of the finding: Facts from the audit; must be able to withstand attack; must have facts straight
Ex. at a retail store like Stew Leonards – we checked the scales in deli – 25% of the time the scales were incorrect by more than 5% |
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Term
| What do you need to know about the CAUSE and EFFECT of report findings? |
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Definition
Cause: Why goals were not met
- Need to identify why goal was not met
- Problem solving solution
Effect: answers the "so what question"
- Can you measure in dollars?
- Can you measure in customer satisfaction/dissatisfaction? |
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Term
| What should be included in the CONCLUSION of the report findings? |
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Definition
- Professional judgments based on results and experience of auditor
- Should present potential courses of action
- Procedures should be improved and HOW they should be improved |
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Term
| What should be included in the RECOMMENDATIONS of the report findings? |
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Definition
- Course of action to rectify conditions
- Strengthen Internal Controls
- Unsatisfactory condition is auditors responsibility, Correcting condition is managements responsibility |
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Term
| What must be done when DISCUSSING FINDINGS? |
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Definition
- IA should talk with those who know the facts
- Results of audit must be discussed with management
- Management should agree/disagree with finding in writing
- Timeline for addressing problems mentioned in report |
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Term
| How should the audit FOLLOW UP on report findings? |
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Definition
It is the auditors responsibility to follow up:
- Should have a timeline of addressing issues
- At end of timeline plus extra time (usually a month or two), auditor makes appointment to go back to review progress towards changes
- Additional corrective action taken if needed |
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