PROJECT $-$ EXECUTING AN AUDIT ENGAGEMENT Choose a business process.

Email instructor for approval.

Your project must include the following components:

$1.$ Engagement Letter

$2.$ Engagement Plan

$$ Determine engagement objectives and scope

$$ Prepare the engagement letter

i$.$ Document your understanding of the auditee

$$ Provide a written description of business

$$ Provide a detailed description of the process objective

$($include a narrative, flowchart and whether it is an operations, reporting, strategic, or compliance objective$)$

ii$.$ Develop a test plan for the engagement

$$ Determine the nature, timing and extent of procedures required to gather evidence $($types and sources of relevant information$)$

iii. Identify and assess risks

$$ Identify business risks threatening the process $($brainstorm barriers that might threaten the achievement of the objective$)$

$$ evaluate the impact and likelihood of risks

iv$.$ Identify key controls

$$ Identify key controls in place to mitigate those risks $($activities designed to reduce the risk$)$

Principles of Internal Auditing $$AC$2360$ Winter Semester $2024$ Page $1$

v$.$ Evaluate the adequacy of the key controls

$3.$ Engagement Performance

vi$.$ Conduct tests to gather evidence

$$ Document the audit procedures used $($inquiries$,$

observations, inspecting documents, reperformance, recalculation, confirmation$).$

vii. Evaluate audit evidence gathered and reach conclusions

$$ Are the key controls adequate?

$$ Are they operating efficiently?

$$ Are the risks mitigated to an acceptable level?

$$ Does the design and operations of key controls support the

achievement of the objectives?

viii. Formulate recommendations

$4.$ Engagement Communication

$$ Prepare a written communication to the board and senior management of audit results and recommendations