2100-Preliminary Survey And Research

 

Definition

The Preliminary Survey Process begins with the draft audit objective and hours budgeted for the project.  Initial research should be performed during the planning process to increase the auditor’s efficiency.  It should be emphasized that the audit objectives(s), scope and procedures should be constantly reassessed throughout the audit process to ensure efficient use of audit resources.  In addition, ideas for future audits identified during the audit should be documented in the workpapers.

 

Objective 1: Using professional judgment and available information, determine the most appropriate audit objective(s) and scope.

 

Procedures:

·        Determine department’s mission and objectives from talking to the Department Head, reviewing the department’s annual report or web page, etc.

·        Determine the organizational structure of the department and the related campus or central administration structure from reviewing the department’s organization chart.

·        Develop a listing of functions that management considers being critical; ensure that functions considered critical be included.  (Consider the functions where there is risk that error or unreliable information would adversely affect the department’s operations and/or their ability to efficiently and effectively accomplish their objective.  Also consider those functions that would adversely affect the University’s overall mission/objective.  As an example, reviewing recap statements is always a critical function because each department not only has responsibility for ensuring the correctness of their own transactions, but also the responsibility to ensure that transactions not relating to their department are not posted to their accounts).

·        Determine key financial and administrative data relevant to the audit from other department reports.

·        Identify control processes to monitor critical functions for compliance with established standards.

·        If relevant, identify issues and concerns raised in prior audits of the department.

·        Unless otherwise warranted by the audit objective, the Audit Scope should include current processes.

 

 

 

 

Objective 2: Determine the audit program steps and audit procedures needed to gather sufficient, relevant and useful evidence to meet the established objective(s).

 

Procedures:

·        Using the information gathered above, select the appropriate audit approach.

·        Determine the evidence necessary to reach conclusions on audit objectives.

·        Identify the tests and other procedures to be performed to gather the required evidence.

·        Prioritize the objectives, steps and procedures so that the most important and significant are performed first.  This will assist the auditor in keeping focused on completing the audit by developing sufficient information to report on the audit early in the process.  If necessary, the audit can be ended (e.g., as a result of revised objectives, budget changes, new audit requests), before all of the originally anticipated procedures are performed.

·        Prepare an Audit Program appropriate for completion of the audit.

 

Initial Research

Review all the recap sheets (balances and activity) for the department under review.  Review account balances for overdrafts.

 

When applicable, the following documentation should be reviewed or considered.

·        Review Permanent Files – Permanent files provide previous audit reports, organization charts, resource references, applicable laws and regulations, internal control reviews, etc.  They eliminate repetitive investigation and documentation.  Flowcharts, questionnaires, etc. need only be updated for changes that have occurred since the last audit.

·        Review Previous Internal Audit Reports and Audit Workpapers – These provide a record of previous audit issues, observations and recommendations for the area or subject under review.  In addition, workpapers provide a record of the audit work performed and the basis for the audit report and comments.  Workpapers are a record for details of account balances, internal controls and operating procedures.  The workpapers can be a review medium for determining the adequacy and effectiveness of the audit scope and for revising the audit procedures.  The previous audits’ workpapers also facilitate follow-up during the current audit.

·        Review Previous Reports from the External Auditors’ Compliance and/or Financial audits.

·        Consult with Auditors from other Universities/Organizations – Others who have audited or are familiar with a University operation/system or specialized subject matter may be consulted for technical assistance, answers and ideas.

·        Consult with Technical Experts to learn about a technical subject or to request technical assistance/guidance in a new or specialized subject matter or area.

·        Review Library Database Searches – Searches are available from University and other local libraries and can be useful in audits of specialized or technical areas/subjects.

·        Review ACUA Internal Control Questionnaires and Audit Guides – Available for various college and university operations and systems.

·        Review Accounting/Auditing manuals and books.

·        Review Academic Handbooks and Course Catalogs (for reviews of academic departments).

·        Review AICPA Guide to Audits of Colleges and Universities.

·        Review University Statutes, Bylaws and General Rules – Concerning University Organization and Procedures.

·        Review Policy and Rules for Civil Service Staff – Policies (and rules and regulations applicable to the interpretation and implementation of the policies) that provide uniform guidelines for the management of the Civil Service staff of the University.

·        Review Board of Trustees Bylaws and agenda items/minutes.

·        Review Campus Telephone Directory – The telephone directory provides general information and is useful in determining the reporting structure (for example, the McNeese State University Campus Telephone Directory includes All-University Organization, Campus Officers, Deans, secretaries, etc.).

 

Output

It is anticipated that the Preliminary Survey Process will generate a few workpapers.  These include a listing of critical auditee processes with an explanation/justification supporting the proposed audit objectives and scope, the Audit Program, Audit Procedures and any workpapers generated to support data gathered.

 

 

 

Return to Table of Contents

Return to Office of Internal Audit Main Page