Written by Reginald Chan on November 15, 2020

How to Conduct a Successful Audit?

Conducting an audit can be more difficult than it seems. However, it is mandated by ISO Management System Standards. Successful audits can be great tools for your organization. They let you know what you are doing right and what needs to improve. Internal audits can help you streamline your company’s processes to promote efficiency. They can give you insight into compliance issues. The following are a few tips to conduct a successful audit.

1. Initial Planning

Initial audit planning is important. It ensures that everyone on your team knows the purpose of the audit and what is expected of them. During the initial planning stage, you need to answer the following questions;

  • Does the audit aim to address specific enterprise risks?
  • Why is the audit project important?
  • How will the audit help the organization meet its objections?
  • Has this process been audited in the past? If so, what were the results?
  • What significant changes have been made since the last audit?

2. Schedule an Open Meeting

Schedule a meeting that involves the administrative staff and senior management before conducting an audit. The open meeting is a chance to present the scope of your audit. During the audit, you can determine the timeframe of your audit and discuss other important issues. Heads of the department may inform members of their teams about possible interviews with the auditor. Take the following steps to prepare for a planning meeting with the relevant stakeholders:

  • Validate your flowcharts and draft narratives with experts in the subject  
  • Outline important process steps by flowchart, narrative, or both.
  • Create a pre-planning questionnaire to facilitate the meeting

3. Choose the Right Audit Software

The right audit software can make work easier for you. It can help you get a closer look into the finer details and inner workings of your business. The tools in safety audit software can improve your general performance. They can help you identify inefficient procedures and under-performing departments.

If you completely rely on traditional auditing, you may spend a lot of time in the auditing process. Traditional auditing demands the use of manual methods in many functions. The larger the organization, the more difficult traditional auditing will be. Automated auditing software eliminates the possibility of human error and you can do everything without disruptions.

4. Have a Clear Set of Processes

Having a set of processes will make your job as an auditor a lot easier. The main purpose of having a specific audit process is to standardize your operations. Standardized processes use the best practices. A standardized process will:

  • Communicate audit expectations effectively
  • Mitigate risks
  • Engage staff members
  • Maintain consistent quality
  • Make it easy to identify what went wrong
  • Automate repetitive tasks and save time
  • Promote efficiency

Following specific audit processes will protect you against audit error. Mistakes can have significant consequences.

5. Create an Audit Program

After understanding the process and risks involved, you need to create an audit program. The program should include the following details:

  • Process risks
  • Process objectives
  • Control attributes such as:
  • Control frequency
  • Whether the control mitigates the risk of fraud
  • Whether the control prevents or detects risk events

6. Request Financial Documents

Once you have notified the organization about an upcoming audit, you may request the documents listed on your preliminary checklist. The documents include receipts, ledgers, a copy of the last audit report, and original bank statements. Other important documents include the organizational charts, copies of their standing rules and bylaws, and copies of the committee and board minutes.

7. Maintain Independence and Objectivity

The audit activity has to be independent and the auditors must remain objective. If an auditor has been assigned to a department, they should have no professional or personal association with the processes being audited. They should be able to report all non-conformities without fear or bias. As an auditor, you have to examine all the available evidence objectively before determining the findings.

8. Expertise In Subject Matter

Conducting an audit based on information from the internal company is a good idea when you are trying to assess process controls and the effectiveness of operations. However, you need external expertise to ensure that your audit matches the changing landscape of the industry. Use at least one of the following when evaluating the design of your processes:

  • Relevant blog posts
  • Subject Matter Expert (SME)
  • Articles from top business periodicals

9. Initial Document Request List

When preparing to conduct an audit, you need to request and obtain the relevant documentation. Make your request for the documents before starting the planning process. They may help you understand the relevant applications, processes, and important reports. Some of the most important things to request include;

  • Access to the main applications required in the process
  • Procedure documents, policies, and organization charts
  • Reports used in managing the efficiency and effectiveness of processes

10. Conduct Onsite Fieldwork

Gather information from an open meeting and use it to finalize your plan. You can conduct fieldwork by speaking to the members of staff and reviewing the processes and procedures. Evaluate internal controls and ensure that they are adequate. If there are any problems, discuss them as they arise and give the company a chance to respond.

  1. Draft a Clear Report

After fieldwork, you need to prepare a detailed report of your findings. Important things to include in your report include mathematical errors, payments that were authorized but not paid, posting problems, and any other discrepancies. Write a commentary with the details of your findings. Recommend solutions where appropriate.

Businesses all around the country need procedures to record, monitor and calibrate the functions, inputs, and outputs of different departments. They need to assess the efficiency of all departments and their contribution to the company’s goals. Without a proper auditing process, it may all be difficult or impossible. Employers and their supervisors may not always provide objective feedback. Relying on their opinion may give you inaccurate information. Audits add credibility to your financial statements. They give your shareholders confidence and help you detect and avoid fraud.

Article written by Reginald Chan
A meticulous entrepreneur by nature, Reginald is a sought-after success coach, digital marketing consultant and TEDx speaker from Asia. Currently, he teaches others how to make money online for free.

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