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Internal Auditing Best Practices
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15–10 CREATE AN ON-LINE INTERNAL AUDIT LIBRARY
An internal audit team will go on most audit engagements without a great deal of
company expertise to back them up. If they encounter an unusual problem in the
field, they have no one to turn to for advice. Similarly, if they encounter a control
problem, they have no way of knowing if it is an isolated issue or if it has been
uncovered in other places within the company. These problems can be reduced by
setting up an on-line internal audit library that contains records from previous com-
pleted audits, as well as who worked on them and how they can be accessed. Fur-
ther, the library can hold updates on all of the most recent accounting standards, as
well as cross-indexed data on problems or unusual audit scenarios encountered dur-
ing other company audits. By accessing this information, audit teams can save a
great deal of research time that would otherwise be spent combing through the
company directory or the paper-based audit files to find the same information.
Setting up such a system requires each internal audit manager to create an
electronic summary-level report on each audit as it is completed, which is then
forwarded to the company webmaster for inclusion in the library. Also (and
involving much more time), staff must be assigned to the same task for all previous
audits for at least the past few years, and preferably for at least the last five (in
order to build up a reasonable base of information). This can be a substantial
effort. Finally, accounting standards can be easily obtained from various CD-
based products for posting on the on-line library. Be sure to obtain an accounting
standards product that contains an index search capability, so that users can easily
search for items of particular interest.

Cost: Installation time:

15–11 CREATE AND DISSEMINATE INFORMATION FROM
A BEST PRACTICES DATABASE

A large company will have many internal auditors combing through its processes
in many locations and possibly on multiple continents. These auditors will build a
store of knowledge about best practices that is based only on what they have seen,
and which they will likely recommend to other business units as they travel through-
out the company on various audit projects. Though this will result in the spread of
best practices through a company over time, it is a very inefficient way to do so—
knowledge will only be applicable if an auditor happens to be assigned to another
business unit whose processes could benefit from that person’s specific knowl-
edge, and it will be lost when an internal auditor retires or leaves employment.
A much better way to spread the use of best practices is to store the informa-
tion in a central database. It should be entered into the database as soon as an
audit is completed; it can also be validated in terms of its effectiveness by specif-
ically reviewing its results during a repeat audit at a later date. Auditors can also