Many choices must be made by internal audit executives as they go about their work: How do you evaluate risk? What should be audited? How can one get the skills required to carry out particular audits? What audit technology should be used? How can you form an internal audit team? And so on. In these areas, we sometimes make smart judgments and sometimes we don't. Let's discuss some common issues in the internal audit works.
What are the issues faced during Internal Audit Works?
So, here are six frequent habits or faults that many internal auditors should abandon or reconsider:
1. Exaggerating independence and objectivity
2. Attempting to finish the full audit plan
3. An overemphasis on adhering to Professional Practice
4. Misapplication of co-sourcing and outsourcing
5. Believing you are doing "risk-based auditing"
6. Safeguarding continual audits and monitoring systems
Exaggerating independence and objectivity:
While internal audit often reports to the CEO or another member of the C-suite on a daily basis, its independence stems from a functional reporting connection to the board of directors, notably the audit committee.
Make every effort to do your assignment to the best of your ability. In most circumstances, everything will be OK. You may campaign for a reporting structure that would increase independence, but proceed carefully; it may not be worth causing an uproar, and the backlash could be severe.
READ MORE ABOUT BMS INTERNAL AUDIT
Attempting to complete the whole audit plan:
Some C-suite officials and audit committee members set the expectation that after an audit plan has been authorised, an internal audit should finish it completely, without exception, within a year. However, astute internal audit executives understand that such an expectation is unrealistic if they are to be nimble and sensitive to the changing demands of a dynamic firm.
An excessive focus on Professional Practice:
While seeking conformity across all Standards will undoubtedly help your internal audit function improve, it will not inevitably transform it into a fantastic one. Yes, pursuing conformity with the Standards makes sense, but don't emphasize it to the point where it risks making internal audits less relevant in your firm.
Misapplication of co-sourcing and outsourcing:
If the internal audit strategy is established with the greatest risks in mind, almost no single internal audit function will ever have all of the skills, expertise, and competency required to complete all audits. The resources required to accomplish the audit plan at a high level must come from someplace.
In such a circumstance, leverage co-sourcing and guarantee that staff internal auditors carefully shadow hired subject matter experts to gain from their skills while remaining part in the project.
Belief that you are doing "risk-based auditing":
We all view hazards differently, and our biases enter the calculation, whether consciously or unintentionally. So everything done based on risk (or "risk-based") is only as accurate as the quality of our analysis, knowledge of the issue, and capacity to cognitively regulate our biases.
So, if we plan something ahead of time and begin work on it tomorrow, the risks on almost everything in the organisation have changed in the interim, but we didn't go back and change our risk assessment and the factors that led to a particular project being on the audit plan, which have most likely changed by now.
Keeping continuous audits and monitoring systems safe:
What does this have to do with continuous auditing and monitoring? The organisation must run itself, and we should not be doing anything that may be considered operational when it should be done by someone else outside of internal audit. So, if we can devise some kind of automatic programme that continuously checks some component of the business, that's fantastic. However, do not confine it to internal audit. That basically makes us the cops who are always on the lookout for things to go wrong. Turn
We, BMS Auditing have a dedicated team to evaluate all your work and improve the risk and provide better results.
Just sit and relax when we are around you.