5 tips to avoid internal audit mistakes
Audit teams and companies are coming under increased scrutiny by the PCAOB and the SEC. Up to 50 percent of Big 4 audits that the PCAOB inspected had significant deficiencies related to the audit of internal controls.
Companies have amended filings to report previously undisclosed material weaknesses. In addition, the SEC has taken action against individual executives based solely on internal controls. With the increased scrutiny of external auditors, you need a sound strategy and process for documenting and testing internal controls.
According to a recent article, there are several common mistakes that internal auditors make. You can avoid them and come out ahead—just remember these five things:
- Don't forget to add value It's no secret—audit can be synonymous with micromanagement. Make sure that when you are working with your audit team, you don't spend valuable time micromanaging the process. You have value to add, so add it. Adopt an efficient workflow process that you can trust, and stick to it.
- Plan, plan, and plan some more Outlining an explicit path from the beginning will ensure that your time is spent where it should be. Start planning early, so you don't waste time figuring out a plan later. Your goal is to provide a consulting engagement to help senior management get to the root of the problem.
- Keep the big picture in mind Increase the efficiency and effectiveness of your documentation and reporting to the audit committee. Stop hunting for numbers. Instead, report up-to-date numbers to your audit committee with ease. Create reports and dashboards that automatically update—allowing you to get back to analysis.
- Worry about scope creep When something unexpected turns up, how will you handle it? Have a plan in place before a surprise occurs, so you and your team will know how to resolve the situation efficiently and effectively.
- Eliminate stress of massive audit reports No executive has time to read a report the length of a novel. Spend time working on a real-time, executive-level dashboard that features key metrics and processes. Increase visibility across your organization, and make your reports easier to manage.
At a time when your controls and process are under pressure, be sure to avoid these top internal audit mistakes. Find out how you can make the pressure easier to bear and get your internal controls in shape, here.