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INTERNAL AUDIT SHARED SERVICE (IASS) AUDIT PLANNING

INTERNAL AUDIT SHARED SERVICE (IASS) AUDIT PLANNING. The Annual Planning Process. Scope of Internal Audit Section’s Work; Key Core Deliverables for 2012/13 Approach to Developing the Annual Audit Plan; Step 1 – Understand the Council; Step 2 – Define the Audit Universe;

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INTERNAL AUDIT SHARED SERVICE (IASS) AUDIT PLANNING

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  1. INTERNAL AUDIT SHARED SERVICE (IASS)AUDIT PLANNING The Annual Planning Process

  2. Scope of Internal Audit Section’s Work; • Key Core Deliverables for 2012/13 • Approach to Developing the Annual Audit Plan; • Step 1 – Understand the Council; • Step 2 – Define the Audit Universe; • Step 3 – Assess the inherent risk; • Step 4 – Assess the strength of the control environment • Step 5 – Calculate the audit risk; • Step 6 – Determine the annual audit plan.

  3. SCOPE OF INTERNAL AUDIT’S WORK Control environment – comprising:- • Risk Management; • Control and • Governance.

  4. KEY CORE DELIVERABLES FOR 2012/13 • Assurance • Delivery of the Annual Plan; • Responsive to Transformational change; • Meet the requirements of our External Auditors; • Risk Based approach; • Implementation of Audit Recommendations; • Governance; • Counter Fraud; • Support the Audit Committee.

  5. Approach to developing the Annual Audit Plan STEP 1 Understand the Strategic and Operational Priorities together with Risk.

  6. STEP 2 • Define the Audit Universe • Distinct units or functions of the Council; • Business / organisational processes; • Requests from Senior Management; • Requests from Directors (CMB) • Regulatory or statutory requirements • Potential audits based on experience or instincts.

  7. STEP 3 • Assess the inherent risk of each auditable entity based on impact and likelihood criteria so the plan is focussed on the most risky areas. • RISK ASSESSMENT PROCESS

  8. Step 3 – Continued • APACE – Audit Planning and Control • Environment. • Internal Audit’s Management Information System with an in built Risk Assessment Process. (see handout 1)

  9. Step 3 – continued…. • Audit Risk Model – (See Handout 2) • Three Key Factors: • The size of the risk or exposure; • The likelihood that the risk will materialise and • The probability of the consequences being detected if the risk does materialise.

  10. Step 4 Assess the Strength of the Control Environment. • Assessment based on:- • Knowledge of the control environment, • Information obtained from other assurance providers; • Corporate importance and sensitivity; • Materiality; • Outcomes and timing of previous audit coverage, • Management Concerns.

  11. Step 5 Calculate the Audit Risk. • This step is largely mechanical – but is always carefully reviewed. • The plan should be based largely – but not exclusively – on the results. • Flexible audit plans are invariably more successful in meeting organisational needs.

  12. Step 6 Determine the annual audit plan. • Determine the timing and overview for each audit review; • Consider additional requests for audit reviews, for example grants audits, ad hoc and service specific requests.

  13. Audit Committee • The proposed annual plan of work is presented to the Audit Committee for approval. • Monitored during the year as the risk profile of the Council changes; • Audit Committee regularly kept informed of progress against the Annual Audit Plan.

  14. Questions

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