Internal Audit Basics 1
An independent, objective assurance, and consulting activity, designed to add value and improve and organization's operations.
Internal Audit / Internal Audit Function
The phase of an audit where objectives, scope, and resources are determined, and a strategy is developed to guide the audit process effectively.
Planning Phase
The phase of the audit where auditors collect evidence, perform tests, and conduct interviews at the client's location to gather information for their audit conclusions.
Fieldwork Phase
The phase of communicating audit results, findings, and recommendations to stakeholders through formal documents, reports, or presentations, facilitating transparency, accountability, and decision-making in organizations.
Reporting Phase
The process of verifying that audit recommendations have been implemented and that identified issues have been addressed, ensuring that risks are mitigated, and compliance requirements are met.
Follow-up
An unbiased mental attitude that internal auditors must maintain throughout the audit process to ensure credible results.
Objectivity
A description and schedule of audits to be performed over a certain period; includes areas to be audited, type and scope of work, and high-level objectives
Audit Plan
Meeting where preliminary findings and observations are communicated.
Exit Conference / Exit Meeting
Auditee official response to audit findings
Management Response / Auditee Response
Auditee provides updates to corrective actions
Status Updates on Agreed Action
The quality of being honest and having strong moral principles, ensuring consistency and fairness in actions and decisions.
Integrity
Discuss audit purpose and timing with the client
Entrance Conference / Entrance Meeting
Document that summarizes and record all the activities and evidence obtained during an audit or investigation
Workpaper
The process of communicating audit findings, conclusion, and recommendations
Communicating Results
The process of confirming that corrective actions were implemented
Validation of Implementation
The probability of a risk occurring
Likelihood
Gather information about the audited area
Background Review
Information collected by auditors during an audit to support their findings and conclusions.
Audit Evidence
Specific corrective actions, including timeline, that management commits to taking in response to audit findings.
Agreed Action Plans
Internal Audit reports to management and Audit Committee on the status of agreed action
Reporting to Management
The freedom from conditions that threaten the ability of internal auditors to carry out their responsibilities in an unbiased manner.
Independence
The overall process of identifying, analyzing, and evaluating potential risks that could impact an organization's ability to achieve its objectives.
Risk Assessment
Evaluating controls to determine if they were designed properly and operating effectively
Control Testing
A formal document summarizing the audit findings, conclusions, and recommendations, communicated to management, the board, and other stakeholders.
Audit Report
Presenting the follow-up report and escalating unresolved high-risk issues to Audit Committee.
Reporting to Audit Committee