Fundamentals of Risk Management

Internal audit activities
415
TAbLE 
35.1
Undertaking an internal audit
Planning
1
Initial contact: to inform the client (audit target) or involved association about the 
auditing and its objectives.
2
Initial meeting: conference meeting, so that the client can describe the areas for 
review and state the available resources and processes.
3
Preliminary survey: the auditors will gather all the needed data so they can have
a good overview of the auditing.
4
Review internal control structure: the auditor will determine the priority areas for 
the audit to review.
5
Audit programme preparation: the audit programmes will outline the required 
fieldwork related to the audit topic/area.
Fieldwork
1
Testing for the critical internal controls: this process tests if randomly selected 
records are accurate.
2
Regular updates: the auditor will carry out financial reporting, mostly in oral 
communication and the client may help in resolving any issues raised.
3
Drafting the audit summary: when fieldwork is done, the auditor will summarize 
findings, conclusions and recommendations.
audit report
1
Audit report: the report will be reviewed by the audit team before presenting it to 
the client for further review.
2
Creating the report: comments and suggestions on the first draft are taken into 
account in producing the final report.
3
Distribution of the final audit reports to people involved, senior management, audit 
committee, as agreed.
Follow-up
1
Audit follow-up: response from the client will be reviewed, so that the findings 
may be tested and resolved.
2
Reporting the audit follow-up: the effects of resolved and unresolved findings will 
be included in the follow-up.

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