The Institute of Internal Auditors (IIA) describes internal audit procedure as an objective and independent quality procedure that has to be carried out to ensure that the organization’s risk management, control and governance process are streamlined and systematic. The internal audit procedure is the last procedure in the quality chain, and is designed to ensure that all the processes that went into the production of a product went according to set methods. It is a checklist that helps the organization to add value to the operations.
The internal audit procedure is usually carried out in 10 steps, each of which logically follows the previous one.
- Notification: this is a formal announcement of the fact that that internal audit procedure is about to commence. The auditor will send out a list of items that she is seeking to audit with the organization.
- Plan: once the auditor notifies the organization of an impending audit; she will plan how to go about the audit. This is done by assessing the risks inherent in the processes the organization has put in place.
- Meet: the auditor next meets with the senior management to define the purpose and scope of the internal audit procedure.
- Doing the rounds: once the audit schedule has been chalked up, the auditor will be meeting with each of the important or concerned staff to discuss the audit and the role they have in it.
- Information: the auditor will then announce to the staff the date and nature of the internal audit procedure and what they need to do when.
- Report: after the initial round of audits, the auditor will come up with a draft of the audit findings, which will be circulated to the concerned members of the staff.
- Response: the next round of the internal audit procedure is for the management to analyze the audit report and offer its response to it. This consists of three steps –whether the organization agrees or not with the report; how it plans to correct the areas of disagreement, and how much time all these could take.
- Closing: at the closing meeting, the management can list out its reservations or opposition to the audit findings, if any.
- Distribution, where the final report is distributed to the members of the staff.
- Follow-up, meaning a signal from the auditor saying that the audit has been completed, is the last step of the internal audit procedure.
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