Page 330 - Accounting Best Practices

c15.qxd 7/31/03 3:27 PM Page 319
319
15–15 Use Workflow Software for Internal Audits
areas investigated; during the process some department managers demand
reviews of other areas, while others put forth considerable effort to avoid them,
on the grounds that they take up too much staff time. The internal audit manager
is caught in the midst of this maelstrom, trying to please everyone while still
scheduling audits for those areas in which he or she has a feeling that some prob-
lems may lurk. A simple way to revise this scheduling process is to base all audits
on the concept of risk to the company.
To schedule based on risk, a company must devise a ranking for risk levels,
with number one being any potential control problem that could place the com-
pany in grave financial danger, while lower levels of risk can be assigned a lesser
category. Then the internal audit manager can assign a risk ranking to each
requested audit, while also conducting a review of other control areas to see if
there are other areas of risk that are not currently being addressed. The upshot of
this process is a clear ranking of audit reviews that is highly defensible and that
will focus the bulk of company audit attention on those few key control processes
that are at the most risk of causing financial trouble.
The main issue to be aware of is that the internal audit committee should for-
mally approve of this scheduling process, so that the internal audit manager can
use that committee’s support when telling other company managers that their
requested audits will not occur quite so quickly as they would like.

Cost: Installation time:

15–15 USE WORKFLOW SOFTWARE FOR INTERNAL AUDITS
Larger companies with many internal auditors face the following challenge: They
have a difficult time controlling the activities of their auditors, rarely have a good
knowledge of prior audits already completed, require extra travel time to return to
company locations to clear hanging audit issues, and cannot readily see if the
same auditing problems are cropping up in multiple parts of the company. These
problems result in significant inefficiencies in work efforts.
One can resolve these problems by installing workflow software that has
been tailored to the particular needs of the internal auditing environment. For
example, workflow software contains forms and templates that are commonly
used in most audits, allowing the staff to save time that would otherwise be spent
creating work papers from scratch. In addition, information entered directly into
the workflow database through these on-line forms can be reviewed from a cen-
tral location by audit managers, thereby reducing the amount of time spent travel-
ing to remote company locations. Further, this information is then available to all
auditors, anywhere in the company, for immediate review.
If audit documents must be approved by multiple people, the software can
send an electronic version of the documents to each person in turn, and wait for
each one’s approval before being sent to the next person in the approval process.