Tips for a Smooth Audit

The following tips are intended to assist your department in having a successful and smooth audit.

Tip #1: Understand your role in the audit process

Management role – As responsible management, you will be asked to discuss your operating unit’s operations and processes and associated internal controls. You may also be asked how you ensure compliance with any important regulations and to provide documentation that describes your department’s activities, policies, and procedures.
Process Owner – Each process included under the audit typically has one or more process owners. These individuals regularly perform the process and can explain the nature and timing of their activities. For example, if we are auditing the processing of invoices we would meet with the person (or persons) who are responsible for reviewing, approving and processing payments.

Audit Liaison – An audit liaison can help to smooth out the audit process by being the go-to person for the auditor or audit team. This person will receive all audit requests and redirect those requests to the appropriate department representatives. The audit liaison will then collect audit requests and forward them to the auditor according to agreed upon deadlines.

Audit Planning – In the audit planning phase, the auditor determines the objectives, scope, timing, and resources needed for the audit. Your department will be provided with an overview of the audit during an introductory meeting. This is the time to speak up if you have questions about the audit timing or approach.
Assessing the Design of Internal Controls – During this phase of the audit the auditor will meet with the various process owners to gain an understanding of key activities and related internal controls. Being able to provide examples of procedural manuals, forms, etc. used to support a particular activity can greatly assist the interview process when the auditor is gaining an understanding of how your responsibility area operates.
Testing Transactions and Analyzing Results – Testing transactions helps the auditor to confirm that activities were described accurately and that internal controls are working effectively. Testing may involve sampling a population or using data analytics software to test the entire population of transactions.
Reporting – During this phase the auditor will present the results of the audit as a draft report which summarizes, identified risks, observations, and recommendations to improve internal controls, management oversight, or general process improvements. Department management is typically requested to provide a written response to each recommendation.

Miscommunications – Take the time to teach the auditor how you manage activities within your department so that you are speaking the same language. Ask for clarification if the auditor asks for something (using terminology you are not familiar with) before spending time gathering what may be the wrong information.
Scheduling Issues – Provide your schedule and any timing constraints to the auditors as soon as you are notified of a pending audit. We understand that there is never an ideal time for an audit; we may be somewhat flexible in the timing of certain phases of the audit, but it is in everyone’s best interest to establish a schedule and stick to it.
Disclose Known Issues – Outline your department’s strengths and weaknesses so that the auditor will spend less time alerting you to problem areas that you already know about and will be able to instead allocate more time to collaborating with you on practical solutions to improve your department’s control environment.
Ask Questions – To increase your ability to provide the auditors with what they need, ask the auditors how the audit area was selected and be prepared to describe any operating, financial or strategic risks that you are aware of. We welcome questions where we can provide guidance and advice.

To continue with the audit process, you can return to the audit process page.