Each Internal Auditor, most likely has a different approach in conducting the Internal Audit Process.
Here are 7 important Internal Audit techniques on having the right mind-set in your organization:
1.) Be part of a solution, do not polarize, or divulge your initial internal audit findings outside of the "need to know" personnel
It is irrational to widely publicize initial audit findings for the sake of communication. The Internal Auditor’s task is classified information. Divulging pre-mature results leads to wrong impressions, can be taken out of context, and it leads to divisiveness causing you to be part of the problem, not part of a solution. This is sensitive information that is not for disclosure to everyone. Unproven Audit Findings can disrupt the workflow in an organization. So it's better to coordinate with only the relevant personnel on your vetting of Internal Audit Findings.
2.) During the course of Internal Audit Engagement services, don’t rely on verbal accounts “per se”. Investigate, dig deeper, expand, and let company documents tell the story.
Verbal accounts without supporting documents in court is considered “Hearsay.” Facts should be black and white and supported by substantial evidence that is not circumstantial in nature. Ensure Audit Findings are consistent with verbal accounts and corroborated with certified Internal Documents.
3.) Do not socialize with personnel under the course of audit until the Internal Audit Process lapsed
Socializing with personnel is not ethical to practice, and will lead to the impression that the Internal Audit Process being done is just a smokescreen. Professional distancing is recommended. Having this deep influence or connection to personnel under the course of audit is futile and self-serving. No one will believe the credibility of your Internal Audit Report if your outside time is well spent on backdoor conversation with the personnel being audited.
4.) Maintain Professional Independence
Internal Auditors are not directly linked to other department heads. Otherwise, there is an issue of impartiality in favor to the specific department involved. They act independently and unilaterally and are not answerable to other department heads other than the Audit Committee (usually) or whomever he/she is assigned.
Illustrative Example: A Sales head/marketing head should not be in coordination with an Internal Auditor during a sales issue, otherwise, heavy influence can be imposed to the Internal Auditor to act in their favor.
5.) The rule and importance of Audit and Paper Trail
One strategy for problem solving and data analysis is back tracing of documents.The Paper Trail is used to identify the history of events and transactions, and help auditors determine If there are anomalies of alteration, tampering, or padding.
6.) Make a positive impact
Internal Audit reporting is not just about disseminating the negative side of the business, it can also give management the assurance that your organization is heading to a Fraud – Free Environment. Giving positive feedback is allowable and does not deviate from your goals as an internal auditor.
7.) Verify all reports generated by the company’s software
System generated reports should be verified with hard copy documents such as sales invoices, official receipts, collection receipts, delivery and transmittal sheets, or other forms. Inconsistency between system reports and hard copy documents can be an indication of a more significant issue.
Internal Auditing takes years of mastery; you don’t have to be an expert in the first years but you have to be at your best when it comes to Data analysis as Audit Findings will not knock at your door way, waiting to be claimed. You are part of the story on how you Audit Findings will unfold. Being an Internal Auditor will teach you to be vigilant about everything, it’s not an easy task but a rewarding one.
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Download Internal Auditor's Checklist: 4 Stages of the Internal Audit Process - Step by Step