Page 325 - Accounting Best Practices

c15.qxd 7/31/03 3:27 PM Page 314
Internal Auditing Best Practices
314
advisor to new managers, and one with whom a long-standing and friendly rela-
tionship can be forged that will assist in the conduct of future audits. This
approach completely contravenes the more adversarial situation that typically
arises between a new manager and an internal auditor.
Cost: Installation time:

15–7 AVOID OVER-AUDITING OF INTERNAL AUDITS
Many internal audits involve the repetitive review of the same topical areas, if
only because these areas are perceived to have the highest degree of financial risk
to a company, and so are worthy of constant review. When internal audits are
repeated on a regular basis, the managers of these audits will usually pull out the
work papers from the last audit that was conducted on the same area, and simply
copy out the same auditing requirements. This can result in over-auditing,
because the internal audit manager never questions why each of the tasks needs
to be completed a second time. Many of the audit procedures noted in the work
papers may have been intended to be one-time reviews to investigate perceived
problems that have since been overcome with new control systems, rendering the
original audit steps no longer valid. Given this constant tendency to copy previ-
ous audits, a nonessential audit step may have been repeated dozens of times,
simply on the grounds that if it was done before, it should be done again.
A better approach is to conduct a brief, formal review of the upcoming inter-
nal audit with the internal audit team assigned to do the work. This group should
review the results of the last internal audit, pore over the control chart (if any) for
the area to be reviewed, and come up with a new audit plan for every engage-
ment. By doing so, the team avoids the mindless repetition of early audit steps
that are no longer valid, and concentrates on the key issues that will result in the
most valuable audit results. Also, by including the entire audit team in this
review, a company will find that there is much better buy-in to, and understanding
of, the work being done, which may both increase employee efficiency and
reduce long-term turnover in the internal audit staff.
Cost: Installation time:

15–8 COMPLETE ALL INTERNAL AUDIT WORK PAPERS
IN THE FIELD

The objective of an internal audit is to complete a report that describes any control
issues found. However, one would think that, from the perspective of the internal
audit team, the objective would be to move on to the next internal audit as
quickly as possible. There is a preference among internal auditors to continually