Table of Contents
The Key Steps for Planning
In an auditing process, there are various steps that should be taken in order to ensure that the result is effective. After understanding the activities that are involved in the auditing process, an internal auditor must take note of several steps.
First, there should be an establishment of priorities by selecting the areas in which audit should be carried out and the consideration of risks associated with management programs (Abbott, Parker & Peters 2012). Various audit departments have to integrate and coordinate with other compliance activities, if applicable. When choosing the priority areas, audit managers should identify critical business processes that require auditing by breaking down and rating the risk areas. They also need to understand the availability of continuous audit data for the identified risk areas. Additionally, there is the consideration of corporate ramifications of auditing particular areas.
Audit managers have to choose the applications that should be audited in this step, and rapid demonstrations of results are of great value for the organization (Djukic & Djordjevic 2014). Thus, this stage may decrease support for continuous auditing in any given firm. After the demonstration that a project has been completed successfully, there is negotiation with the relevant auditors in order to ensure that there is an implementation of the audit plan that has been agreed (Djukic & Djordjevic 2014). This stage is followed by the identification of monitoring and continuous audit rules. There is also the determination of the frequency of the process. Additionally, there should be the configuration of continuous auditing parameters, which is followed by a follow-up to the process. Finally, the final step includes the communication of results that have been obtained.
The Benefits of Planning
Audit planning is a vital process, from its beginning to the end. Firstly, it ensures that appropriate attention is devoted to all important areas in auditing (Pizzini, Lin & Ziegenfuss 2015). There is also the fact that potential problems in an organization’s departments are identified in a prompt manner in order to prevent any shortcomings that might occur in the process. Audit planning also ensures that work is completed in an expeditious manner and coordinated properly (Zhu & Xue 2014). Additionally, audit planner makes sure that there is the development of a general strategy as well as a detailed approach to the expected timing, nature and extent of the audit in question. This planning leads to the auditor becoming aware that the process has to be undertaken in a timely and efficient manner.
Auditing plans allow auditors to obtain sufficient and appropriate evidence for all circumstances that might influence in the process. Another benefit of audit planning is that it helps keep all the costs that are involved in audit at a reasonable level. Thus, it is possible to state that this process helps avoid misunderstandings that might occur between the client and the hired auditor. Finally, it lets auditors know the scope of the audit that they are supposed to carry out, and to what level they should be committed to the job (Pizzini, Lin & Ziegenfuss 2015). In the long run, planning ensures that the entire auditing course has been a success and that all disagreements have been solved amicably. The result is that the process will lead to satisfaction of all involved parties - the auditor and the client.
The Challenges of Planning
There are various challenges that might be faced during the process of audit planning. One obstacle is the complexity of the activity. The process is usually complicated because there are many issues associated with it. Certain measures should be taken for a plan to be regarded as complete or workable. This solution sometimes leads to security vulnerabilities. The process should include a wide array of transactions so that there is a complex security mechanism that provides proper results for a firm.
Another challenge is the customization that is needed for the process (Vijayakumar & Nagaraja 2012). The implementation of any plan requires a certain level of customization in order to ensure that there is uniqueness between one process and the other. For instance, in a company that has various departments, there has to be customization of each department’s planning. However, the problem is that it is usually difficult to develop a standardized approach or methodology that ensures proper conduction of an audit.
Finally, there is rarely adequate attention towards security. The implementers of an audit plan must pay attention to security during the process realization (Zhu & Xue 2014). As a result of the limited emphasis that is put on security-related implications, the surveillance of the plan becomes lax, thus making the implementation of the problem identification and audit process very costly. The element of timeliness might also be stressed or emphasized by the client, which makes it impossible for the auditor to guarantee security of the operation.
How the Challenges Can Be Overcome
There exist several strategies that can be considered to ensure that the challenges of the audit planning process have been overcome. Firstly, the complexity of the process can be solved by ensuring that the auditor employs easy and simple methods in a way they are supposed to be exerted (Vijayakumar & Nagaraja 2012). This approach will ensure that complicated measures are not included in the plan. Thus, there will be timely execution of the auditing activities.
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The challenge of customization can be resolved by making sure that each department is audited at its own time. As a result, there will be no need to come up with simultaneous and unique planning processes for every departments. Additionally, it is vital to ensure that a simple plan is used in order to make any customization that would be required easier to implement (Zhu & Xue 2014). Finally, in order to deal with the issue of customization, the auditors must ensure that they are conversant with all types of audit plans that are available in the market. In such a way, every customization need will be easy to handle.