Numerous companies and audit teams are under tough scrutiny from the SEC and PCAOB. At least 50% of any inspections conducted identify notable deficiencies when it comes to the audit of internal controls. Most companies have amended their reports to disclose any material weakness. SEC has previously taken action against various individual company executives based on their internal controls.
With the increased scrutiny of the external auditors, it’s prudent to find a good strategy for processing, testing and documenting internal controls. If you want to come out ahead and skip the common mistakes made by internal auditors, here are a few things you need to do.
Remember To Add Value
You might choose to micromanage the auditing team and waste a lot of time without adding any value. Therefore, you need to find where you fit in and provide the value designated to you during the entire auditing process.
You need to outline a good path from start to finish allowing you to spend time wisely. It’s prudent to start planning early and avoid wasting time by figuring out a plan when the process has started. Your role is simply as a consultant to help senior management understand the underlying problem.
Consider The Big Picture
Make sure your reporting and documentation to the audit committee has increased effectiveness and efficiency. For instance, rather than hunting for numbers, you should consider reporting the current numbers to the audit committee efficiently. With dashboards and reports that update automatically, you can always get back to analysis effortlessly.
Provide Solutions To Problems Before They Occur
You need to consider how to handle anything unexpected before it actually happens. That means that you need to have a solution in place before anything occurs. That way, your team is in the position to handle the situation effectively and efficiently.
Don’t Stress Yourself With Massive Audit Reports
If you are writing audit reports that are too long, you need to stop doing it because nobody has the time to read it. Rather than wasting your time with these reports, create a real-time dashboard that updates the reports and provides real-time processes and metrics. With increased visibility in the organization, your reports would be easier to manage.
Don’t Alter Audits
Needless to say altering audit findings is not a smart thing to do, so don’t do it. We saw a report on Barclay Simpson about such behaviour – avoid it at all costs.
You should use these tips to avoid common internal audit mistakes. If you’ve found this article helpful, share it with the rest of the audit world. We are pretty sure they are going to thank you for doing it.