Getting Started With: The Audit Plan

Summary

This video script offers a comprehensive guide to developing an audit plan, emphasizing its importance in internal auditing. It outlines the need for a year-round, collaborative effort involving key stakeholders and aligning with organizational goals. The script advises on creating an audit universe, selecting audit projects based on risk and resources, and seeking feedback before finalizing the plan. It also stresses the importance of flexibility and regular reassessment to ensure the plan remains relevant and effective.

Takeaways

• 📅 The audit plan is a list of projects the internal audit department will perform over a defined period, often based on annual or fiscal calendars.
• 👤 The Chief Audit Executive (CAE) is typically responsible for preparing and executing the audit plan, but input from other team members is also valuable.
• 📝 An audit plan is required by the International Standards for the Professional Practice of Internal Auditing (IIA standards).
• 🤝 Developing an audit plan is a year-round activity that involves regular meetings with key stakeholders throughout the organization.
• 🔍 The audit plan should consider perspectives from Senior Management, the audit committee, and other risk professionals.
• 💡 Before developing the audit plan, consider using an annual audit survey to solicit feedback from individual contributors.
• 🌐 The term 'audit universe' refers to a tool that documents all the auditable processes in an organization.
• 📈 Audit engagements should align with the organization's needs and the resources available, including auditors and subject matter experts.
• 📋 The audit plan should be flexible and subject to change, with periodic reviews to ensure it remains timely and relevant.
• 📝 The plan should be submitted for approval through the organization's approval process, which may include Senior Management, the audit committee, or the full board.
• 🔗 The IIA provides additional resources such as websites, webinars, publications, and formal guidance to help in developing the audit plan.

Q & A

What is the primary purpose of an audit plan?

The primary purpose of an audit plan is to list the projects the internal audit department will perform for a defined period, typically based on annual or fiscal calendars, and to align these projects with the organization's goals and risk management processes.

Who is typically responsible for the preparation and execution of the audit plan?

The Chief Audit Executive (CAE) is typically responsible for the preparation and execution of the Department's audit plan.

Why is it important to involve others in the development of the audit plan?

It is important to involve others in the development of the audit plan because managers and individual contributors can provide valuable input based on their skill sets, areas of expertise, and knowledge of the organization's strategic direction and risks.

What does the IIA standard 2010 require regarding the audit plan?

IIA standard 2010 requires the CAE to develop a risk-based plan to determine the priorities of the internal audit activity consistent with the organization's goals.

Why is it recommended to have regular meetings with key stakeholders throughout the year?

Regular meetings with key stakeholders throughout the year are recommended to ensure that the audit plan remains relevant and timely, and to gain insights into the organization's risk management gaps.

What is an audit universe and why is it useful?

An audit universe is a tool that documents all the auditable processes in an organization, such as departments, processes, locations, or product lines. It is useful for determining which areas should be audited based on risk objectives.

How should the audit projects be selected for the plan?

Audit projects should be selected based on the organization's needs, resources available, and risk objectives. They should cater to the team's strengths and address any gaps by bringing in outside experts or adding headcount.

What are some considerations when deciding on the audit projects?

Considerations include following up on previous audit findings, significant changes to the organization such as mergers and acquisitions, and any mandatory projects required for regulatory compliance.

Why is it important to prioritize objectives and strategic risks when deciding on audit projects?

Prioritizing objectives and strategic risks ensures that the audit plan focuses on areas most critical to the organization's success and risk management, rather than just following a predefined rotation.

What should be done before submitting the audit plan for approval?

Before submitting the audit plan for approval, it is advisable to solicit feedback from trusted individuals within the organization and incorporate their input to enhance the plan.

How should the audit plan be treated once it is approved?

Once the audit plan is approved, it should not be set in stone. It should be flexible and subject to periodic review and adjustment to ensure it remains relevant to the organization's changing risk landscape.