Internal Auditing, Examination and Technical Analysis

Objectives:

By the end of the course, participants will be able to:

1. Understanding the scope of the audit planning process
2. Techniques for organizational risk assessment
3. Appreciating how audit planning impacts audit sampling
4. Understanding the relationship between materiality and audit sampling
5. Techniques to select audit samples for balance sheet and income statement
6. Define internal audit, its scope and function within the company
7. List the internal audit standards constituting the framework of the internal audit activity
8. Distinguish the types of internal audit assignments related to operational, compliance or financial internal audit
9. Describe the internal audit fieldwork guidelines and apply techniques for risk identification, controls identification and controls testing
10. Select the appropriate internal audit test tools and list the advantages and disadvantages of each
11. Identify best sampling techniques in an internal audit assignment in terms of sample size or sample selection
12. Recognize fraud and express internal auditor’s responsibility upon fraud detection 

Course Outline:

Internal Audit Standards: 

• Attribute standards
• Performance standards 

Types of Internal Auditing: 

• Performance auditing
• Operational auditing
• Financial auditing: accounting cycles audited by the internal audit function
• Compliance auditing
• 20 questions directors should ask about the internal audit function 

Audit Pre-Engagement Planning: 

• Overview of audit process
• How pre-engagement planning impact substantive testing
• Engagement evaluation
• Engagement letter
• Discussions with those charged with governance
• Types and volumes of transactions
• Preliminary analytical review
• Review of prior year management report
• Understanding the entity and its environment 

Audit Planning at Engagement Level: 

• Planning and risk assessment
• Risk assessment at assertion level
• Inherent risk assessment
• Accounting records
• Journal entries environment
• Commitments and contingencies
• Concept of materiality
• Materiality calculation
• Principles of substantive testing 

Audit Sampling: Assets: 

• Applicable audit assertions
• Applicable international standards on auditing (ISA’s)
• Property, plant and equipment
• Intangible assets
• Group companies
• Investments
• Inventories
• Trade receivables
• Cash and equivalents 

Audit Sampling: Capital and Liabilities: 

• Applicable audit assertions
• Capital and reserves
• Financial liabilities
• Related parties
• Trade payables
• Provisions and Accruals
• Other (i.e. group identified needs) 

Audit Sampling: Income Statement: 

• Applicable audit assertions
• Revenue
• Contracts
• Cost of sales
• Other income
• Employee costs
• Operational expenses
• Finance costs
• Common mistakes
• Best practices 

Audit Methodology: 

• Audit methodology according to individual phases and areas
• “Project initiation” phase
• The “Project proposal” phase
• The “Project planning” phase
• The “Project realisation” phase
• The “Project completion” phase
• Behavioural competence
• Overall evaluation
• Basic audit structure
• Audit of procurement process
• Audit of engagement with contractors 

Audit Implementation and Reporting: 

• Practical implementation of the audit process
• Common issues of the process
• Ethical considerations
• Dealing with stakeholders
• Application of resources
• Writing the audit report
• Audit report content
• Presenting / implementing audit report
• Implementation of best practices

WORKSHOP STYLE: 

A mixture of short presentations, interactive discussion, individual exercises and group work. The emphasis throughout is on a practical approach using case material and examples.