Question

Answer all the questions:
n/b ALL answers MUST be answered in your own words, copying out the text will NOT earn you good marks
Question 1
Discuss comprehensively the 8 steps to Performing an Internal Audit (20)

Answer 1

Internal Audit :-

Internal Audit Is An Audit Which Will Helps The Organization To Add Values And Improves An Organization's Operations. Internal Audit Provides Objective Assurance And Consulting Activity.

*Steps To Perfom An Internal Audit *

1) Identify Areas That Need Auditing :-

Identify Departments Which Are Perform As Per The Policies And Procedure Written By The Organization Or By Regulatory Agencies.

This Can Maintain As Complex As Manufacturing Processes Or As Simplistic As Accounting Procedures.

2) Determine How Often Auditing Needs To Be Done :-

It Will Helps To Know When To Audit, For Eg Manufacturing Process May Required Daily Audits For Quality Control. While The HR Function May Only Require An Annual Audit Of Records And Process.

3) Create An Audit Calendar :-

A Structured And Systemic Approach To The Process Of Auditing Can Ensure The Function Gets Completed. Scheduling Audit On The Business Calender ensures That It Is Done Consistently.

4) Alert Department Of Scheduled Audit :-

It Is Simply Notice Of An Audit Given To The Department So They Can Have The Necessary Documents And Materials Ready And Available For Reviewer. A Surprise Audit Should Be Done When There Is Suspicious And Unethical Or Illegal Activity.

5) Be Prepared :-

The Auditor Should Come And Also Prepared With An Understanding Of Policies And Procedure Of Organization And A List Of Items That Will Reviewed. The More Prepared Auditor Leads To Effective Audit And Also Efficient.

For Eg HR Audit May Focused On Employee Files Etc

6) Interview Users :-

In This Process The Auditor Reviews The Users For Eg Auditor Should Interview Employee And Ask Them To Explain Their Work Process.

And Compare Employee's Explanation With Company's Written Policies.

That Will Helps An Auditor To Understand The Employee's Competence And Identify The Areas That Needs Additional Training.

7) Document Results :-

In This Step An Auditor To Identify The Gap Compliance And Figure Out A Way To Bridge That Fill The Gap.

8) Report Findings :-

Auditor Creates Easy To Read Report, Which Is Reviewed By The Top Level Management Of The Company. And Improvement Plan Should Be Developed For Areas That Have Gaps In Practice Compliance. By Using Focued PDCA Model An Auditor Facilitate Structured Process Implementing This Type Of Improvement.

Note :- Focus PDCA Model -

F Stands For Find

O Stands For Organize

C Stands For Clarify

U Stands For Understand

S Stands For Select

And PDCA Stands For Plan, Do, Check And Act.