Audit Reporting and Follow-Up.

STRATEGIC AUDIT
BSMA
INTERNAL AUDIT PROCESS
2
STRUCTURE OF THE AUDIT ROADMAP
DEFINITION
3
REPORTING – WORKING PAPER
DEFINITION
The results of the fieldwork conducted by Internal Audit are

compiled into a final Audit Report, which contains objective, expertise-
based information on the results of the audit.
At the same time, the audit report serves as a record of the
work performed by Internal Audit employees.
4
OVERVIEW OF REPORT CONTENTS
DEFINITION
The implementation report is primarily a description of

observations and findings made during the audit. The report is used
to explain the audit results to the company’s operational management.
It should include the following elements:
• clear presentation of the issue identified during the audit,
• comparison of as-is and to-be situation, and
• result of the comparison of the current condition with the desired
criteria.
5
AUDIT WORK PROGRAM
DEFINITION
6
OVERVIEW OF REPORT CONTENTS - MANAGEMENT SUMMARY
DEFINITION
The management summary is a condensed version of the original

findings and recommendations of the implementation report, grouped
by certain aspects of content.
The summary should also point out the consequences of failure to
implement the recommendations and refer to any actions already
resolved and/or introduced during the audit.
7
AUDIT WORK PROGRAM
DEFINITION
8
OVERVIEW OF REPORT CONTENTS - IMPLEMENTATION REPORT
DEFINITION
The implementation report consists of two sections: the actual

audit results and the monitoring section for the implementation update
of necessary actions.
It lists all the observations and findings and provides notes in
separate columns on how to eliminate weaknesses. Presentation of the
draft reports can either be done or not during the closing meeting.
9
AUDIT WORK PROGRAM
DEFINITION
10
THE 5 C’S IN AUDITING
5 Cs
CRITERIA CONDITION CAUSE CONSEQUENCE CORRECTIVE

ACTION
11
OVERVIEW OF REPORT CONTENTS - BOARD SUMMARY
DEFINITION
The Board summary presents all Board-relevant findings either

for information, for decision, or for action. It is produced, distributed,
and discussed with the board separately from the implementation
report.
Priority Board issues are reserved for matters that must be
reported during an audit and allow Internal Audit to involve the Board
actively.
12
AUDIT WORK PROGRAM
DEFINITION
13
CONFIDENTIALITY
DEFINITION
The confidentiality of audit reports is critical for many reasons,

and careful consideration must be given to the parties who receive the
report.
Audit reports are normally distributed to those responsible in the
audited area at the draft stage. The persons responsible in the audited
area have an opportunity to comment on the drats, either agree with
or reject the draft, and make additions or corrections.
14
DISTRIBUTION OF REPORT
DEFINITION
Final versions of the audit reports should be distributed within

two to four weeks after the end of the audit. This meets an important
requirement on the part of Internal Audit for timely implementation of
the audit results.
15
STRUCTURE OF THE AUDIT ROADMAP
DEFINITION
16
AUDIT FOLLOW-UP
DEFINITION
The follow-up phase serves to ensure that all recommendations

given after the basic audit are implemented by the deadline.
The follow-up phase breaks down into four sub-phases: status
check I, follow-up I, status check II, and follow-up II.
17
AUDIT WORK PROGRAM
DEFINITION
18
AUDIT FOLLOW-UP - STATUS CHECK I
DEFINITION
The status of operational management can be classified as

follows:
a. Open: Recommendation has not yet been implemented.
b. In process: The persons responsible have started to implement
the recommendation.
c. Closed: Implementation of the recommendation has been
completed.
19
AUDIT FOLLOW-UP – FOLLOW UP I
DEFINITION
A follow-up must be conducted for each standard and special audit.

• recording the actual implementation status of the
recommendations based on information or documents submitted
by the auditees
• gathering evidence that implementation has in fact taken place
and the new situation is practiced on a day-to-day basis
• updating the audit report
20
AUDIT FOLLOW-UP - STATUS CHECK II
DEFINITION
The status of operational management can be classified as

follows:
a. In process: Implementation of the recommendation has not yet
been completed.
b. Reasonably controlled: Internal Audit has performed a final test.
c. Open: Recommendation has not yet been implemented.
d. Done: A matter can be resolved conclusively.
21
AUDIT FOLLOW-UP – FOLLOW UP II
DEFINITION
If the auditors find out during the follow-up I that the

implementation of recommendations and actions is not having the
desired success and if the rating of the basic audit was red the
escalation process will proceed and after a status check II, the auditors
will schedule a follow-up II.
The follow-up II deals exclusively with the items still outstanding.
22

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STRATEGIC AUDIT

The results of the fieldwork conducted by Internal Audit are

The implementation report is primarily a description of

The management summary is a condensed version of the original

The implementation report consists of two sections: the actual

CRITERIA CONDITION CAUSE CONSEQUENCE CORRECTIVE

The Board summary presents all Board-relevant findings either

The confidentiality of audit reports is critical for many reasons,

Final versions of the audit reports should be distributed within

The follow-up phase serves to ensure that all recommendations

The status of operational management can be classified as

A follow-up must be conducted for each standard and special audit.

The status of operational management can be classified as

If the auditors find out during the follow-up I that the

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