After voicing your concerns about the Chief Internal Auditor/ Audit Executive role and obtaining satisfactory changes you
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Question:
You have already put together some draft process maps and procedure charts outlining how you envision your internal audit function to perform its audits. You have also drafted a high level two-year audit plan, indicating the mix of assurance, advisory and follow up work that your function would perform, for the consideration of the Audit Committee to approve. To obtain additional feedback, you have shared draft copies of your proposed audit process and high level audit plan with TechSpark's Chief Executive Officer and Chief Financial Officer.
Barry Biner, TechSpark CEO has called you to his office to discuss some questions he has about your materials. As you may recall, Barry is not very familiar with internal audit.
Barry starts his meeting with you by explaining that he has reviewed your draft audit plan and had some questions. He is confused as to why so much time is spent "planning" audits. "Would it not make more sense for internal audit to focus on performing audits? It would seem that spending more time performing audits would allow the internal audit function to perform engagements on more areas of the company, which would add more value."
Barry was also confused about why so much time was allocated in year 2 of the audit plan for "follow-up" work. "What's the point of auditing an area we have just reviewed? This sounds like we're just repeating work, there is no value added here. Wouldn't it make more sense to audit new and different areas instead?"
Barry explains that he had also reviewed your proposed audit process charts and maps. He is particularly concerned about how audit observations are shared. "What is the point of an exit meeting with the auditee? If you have performed your audit properly, there doesn't seem to be any need for this meeting". Lastly, Barry gets the impression that some observations may not be reported to Senior Management/ Audit Committee (and would only be shared with the auditee). "Our organization is very concerned about the results of your work and wants to receive thorough updates on all work performed and observations found. This includes recommendations and advice provided in your consulting work. It can never hurt to share information!"
Required:
A) Address Barry's concerns regarding the time spent on planning. Explain the stages of an engagement and the role each stage plays. Ensure to explain the relationship between the stages
B) Address Barry's concerns regarding follow-up engagements. Why does internal audit perform this work and what value does it have for the organization? What would be the impact of not performing follow-up work
C) Address Barry's concerns regarding exit meetings. Why does internal audit hold exit meetings (what value do they provide)? What would be the impact of not holding exit meetings?
D) Address Barry's concerns regarding the communication of engagement observations/findings. Will all engagement observations (and advisory recommendations) be reported to audit committee? Why or why not?
Related Book For
Auditing An International Approach
ISBN: 978-0071051415
6th edition
Authors: Wally J. Smieliauskas, Kathryn Bewley
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