Effective Audit Programs Consider Objectives First

Thanks to excellent white papers like this one, creating audit and assurance programs can seem as easy as one, two, three, four and five! At least on the face of it. And that is where audit programs can go awry. The auditor often doesn’t take into consideration the objectives they actually want the program to accomplish as they move through the five planning phases.

Anyone can follow an audit program, but if they tailor their execution to meet the four key objectives of a world-class audit and assurance program it will be faster, more efficient and ensure that they are doing the right things to mitigate risk.

So what key objectives should an audit process have? They include:

1. Formally documented audit procedures and sequential steps.
2. Procedures that are repeatable and easy to use by internal or external auditors who need to perform similar audits.
3. Documented testing methods that will be used (compliance and/or substantive).
4. Generally accepted audit standards that relate to the planning phase in the audit process.

These objectives should be considered when preparing each of the five audit and assurance planning process steps, which include: 1) Determine audit subject, 2) Define audit objective, 3) Set audit scope, 4) Perform pre-audit planning and 5) Determine audit procedures and steps for data-gathering.

Well-documented Procedures Save Time and Money

Take the first objective—formally documenting audit procedures and sequential steps—this links to all five key planning steps because if an audit professional takes any shortcuts, they might miss what the true audit subject is and won’t have a clear understanding of the audit objective. This can cause numerous issues that adversely affect the planned audit. Its scope may be too narrow, too broad or even incorrect. It may take too much or too little time to conduct. Key steps might be missed and the right resources may not be allocated. The execution may involve unnecessary work. All of these issues impact the effectiveness of the audit and can increase its costs. Undocumented or poorly documented procedures will require partial or complete revisions, which risk incurring additional costs. Many of us have heard (or experienced ourselves) situations where charges were increased due to poorly documented procedures, which required rework by the audit team and additional charges to be incurred by the client.

Make it Repeatable

Testing and testing tools have evolved over the years as technology has improved. The use of data visualization tools like QlikView and Tableau provide the ability to do ongoing monitoring instead of just testing a particular time period. At the recent EuroCACS conference in Dublin, the IT Audit Directors Forum participants discussed data visualization and how it can be applied to, and used for, the creation of audit and assurance programs for enterprise resource planning (ERP) systems. We’re now seeing testing tools that look specifically at the concept of data visualization and how it should be considered when determining which testing tools an audit and assurance program will require.

Understand Those Audit Standards

Finally, the planning process should look at how the program will meet generally accepted audit standards around the planning phase of the audit process. If the auditor does not understand the standards they are applying, it will result in a longer-than-needed audit time, and likely a failure to select the right personnel and audit focus. The auditor also wants to make sure he/she completely understands the purpose of the particular audit being undertaken. As an aid to information systems auditors, ISACA has developed ITAF: A Professional Practices Framework for IS Audit/Assurance, which contains the necessary standards and guidelines useful in planning and conducting IS audits.

In the end, audit and assurance programs are only effective if they focus on achieving the four key objectives every audit should have. Without a single-minded emphasis on the objectives throughout the process, an audit could easily miss its mark in terms of subject, objectives, scope, planning, data-gathering and, ultimately, success.