THE AUDIT PROCESS
When an audit begins, the department being audited is informed in advance. An entrance conference is held for the auditors and department members to meet each other and discuss the objectives of the audit. Issues or processes that members of the department would like included in Audit Service's scope of work may be defined at this time. During the initial planning phase, Audit Services may talk with managers, General Counsel, and other offices to get different perspectives on operations and where to focus resources during the audit.
Since each department is unique in its size, purpose, staffing and procedures. The audit procedures that are followed during the fieldwork phase depend on the nature of the audit and are designed to focus on operations or controls that have been identified as high risk or the most problematic for the department. Test work may be expanded, eliminated, or otherwise adjusted as the audit progresses.
During a typical audit, Audit Services performs an evaluation of the internal controls and tests the compliance by tracing a sample of transactions through the operations' processes. Office policies and manuals are reviewed, processed and systems are tested, and documents maintained by the department are examined. Key personnel may also be interviewed. Compliance with University policies are reviewed, as is compliance with procedures that are important and specific to the department's mission.
Throughout the audit process, Audit Service staff will keep relevant staff members advised of findings and attempt to resolve any issues that arise during the audit. Occasionally, a serious or urgent problem is discovered that Audit Services will bring immediately to the attention of the appropriate senior officer(s) for corrective action. An audit of one department may produce findings and recommendations for another department within the University to address.
When the fieldwork is completed, Audit Services prepares a draft of the audit report which is provided to department management for discussion and review. The report is usually formatted with the background and scope of the audit, a brief summary of the positive findings and a list of observations that were identified in the audit. Observations which require a response from outside of the unit being audited are referred to the area's manager for response.
An exit conference is scheduled with Audit Services and relevant managers to discuss the substance and wording of the report and how management intends to respond to the observations. If there are significant changes to the draft, a second draft of the report may be issued.
The final version of the audit report incorporates management's responses to each recommendation. It is distributed to the President, VP of Finance, and the senior officers and department managers responsible for the operations being reported upon. Some final internal audit reports are requested by external auditors.