The purpose of performing an internal audit is to assist organisations with achieving it’s objectives. This is to ensure that internal business operations and practices are kept consistent.
It can be quite time consuming when performing an internal audit. Depending on the department in question, audits can be carried out frequently or rarely. Anywhere in between daily and annually.
Continue reading to discover the 8 simple steps to performing an internal audit.
Performing an Internal Audit – 8 Simple Steps
1. Identify areas that need to be audited
The first step is to identify an areas and departments that follow company policies and procedures. Create a list of the areas that require a review.
2. Determine how frequently an audit is needed
As mentioned above, audits may be needed daily, weekly, monthly, or annually. This depends on the area in question.
3. Create a calendar to keep track of the audits
To ensure that all audits are completed, it is advised to create an audit calendar. The calendar will help to keep track of goals and objectives and if these have been achieved. Scheduling audits on the business calendar ensures that audits are conducted consistently.
4. Notify departments of scheduled audits
Ensure that you give the appropriate departments notice of an audit so they can be prepared for it. A surprise audit should only be done if there is suspicion of unethical or illegal activity. Department managers should not feel threatened by an auditor but view them as a valued resource to help them better manage their area.
5. Make sure you are prepared
The auditor should come prepared with an understanding of policies and procedures and a list of items that will be reviewed. For example, an HR audit may focus on employee files. The more prepared the auditor is, the more efficient the process will be.
6. Conduct interviews with users
Auditors should interview employees and ask them to explain their work process. Compare the process, as the employee explained it, to what the written policy says. This step is to gain an understanding of employee competence and identify areas that need additional training.
7. Document the results
Document the results and any differences in practice to how the policies are written, when policies are complied with and when they are not. Again, the goal is to identify gaps in compliance and to figure out a way to bridge that gap.
8. Report Findings
Create an easy to read audit report. These reports should be reviewed with senior management and an improvement plan should be developed for areas that have gaps in practice compliance.
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