INTERNAL AUDITING How to plan an internal audit
To begin with, create a list of all the areas within your business that need, or would benefit from, an audit. This may include the following elements: ● IT and security ● human resources ● accounting: ❍ payroll process ❍ expenses process ● purchasing: ❍ purchase invoice process ❍ purchase order process ● sales: ❍ sales invoice process ❍ sales order process ❍ sales quote process ● manufacturing ❍ preparation of Item A ❍ production of Item A ❍ finish/quality control process ● shipping ❍ stock process ❍ shipping process.
Table 2: Non-compliance report Process
Findings
Process 1
Procedure completed in accordance to outline of Process 1. No risks found.
Process 2
Equipment used as part of Process 2 suffering notable wear and tear. Product quality affected by this.
Process 3
Data is stored accurately and safely in accordance to outline of Process 3. No risks found.
With your list in place, you can then set out the frequency of the audits. With this information, you can create an internal auditing calendar for the year.
Creating a calendar
Internal audits should not be treated as an optional process. Drawing up a calendar ensures that the audits will be completed on time and frequently. Your internal auditing calendar doesn’t need to be anything fancy. A simple template to follow is set out in Table 1: The internal auditing calendar. The calendar is a benefit to all departments. It allows you to alert the next department to be audited in advance, which is recommended so that they can prepare the correct documentation for you to review. It also gives the internal auditor a chance to locate the process documents, review how the process should be followed and write up relevant questions, before they observe it in action. The process for conducting a successful auditing programme is set put below.
Internal audits should not be treated as an optional process. Drawing up a calendar ensures the audits will be completed on time.”
Compliant?
auditor should then monitor the employee performing a given process, preferably in a natural scenario (i.e. the task needed doing that day). Asking the employee questions about the process they are performing will give the auditor insight as to whether or not the member of staff: ● is following the process properly; and ● understands the process and the risks it is designed to mitigate. Depending on the answers, the auditor can make a note of areas that may need refresher sessions, or aspects of the process that may not have aged well (such as inefficient practices compared to technology that has been brought into the workplace).
Write up
After the interview observation, the auditor will then write up their findings, as well as flagging up any areas of concern. Again, the report document can be as simple or as detailed as you require, as long as the findings are recorded. In the event of a process found to be non-compliant, the auditor will need to recommend further measures in an action plan. They may also need to raise a non-compliance report (see Table 2), depending on your company and its quality compliance measures and recognitions.
Creating an action plan
The action plan can then be put in place to iron out any shortcomings or risks the internal audit uncovered. This should include the findings, Amy Hodgetts is a copywriter for Mediaworks, the corrective action, who will take ownership Interview and observation a digital marketing agency, of implementing the corrective action, and the The auditor should review the process documents and a content writer and deadline for doing so. There should also be a and create questions based off the correct web content optimiser. follow-up date to ensure the corrective action has process. With questions in hand, the internal been applied (see Table 3). Internal auditing is a critical process for any business. Make sure the checks Table 3: Corrective action report are done regularly to maintain optimum performance. ● Finding Corrective NonOwner Deadline for Review
action compliance recommended report number
Process 2 Replace hydraulic NCR4 torque wrench power head. AIAWORLDWIDE.COM | ISSUE 107
Author bio
implementation
George
01/12/19
Sources: 01/01/19
https://thethrivingsmallbusiness.com/ internal-audit-process/ https://www.accaglobal.com/an/en/ member/sectors/internal-audit/learn/ brief-guide.html
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