Import into RefWorks 1. This ensures the authenticity of the content of financial reporting to provide reasonable assurance to stakeholders and it becomes another important system arrangement to ensure reliable financial reporting.
Compare management system records to requirements by J. The specific MS documentation should be reviewed prior to the performance phase of an external or internal audit.
The performance phase normally starts with the opening meeting. Review of elements of the audit criteria might verify the existing MS documentation is conforming, potentially nonconforming or nonconforming see Figure 1.
Overall, I believe the most important outcome of a review is verification there is a system ready to be audited.
Documentation All relevant MS documents, records and previous audit reports—in fact, all MS documentation related to the audit criteria—should be included in the review see the input box in Figure 1.
Examples include the MS manual, operations manual, procedures, flowcharts and checksheets. The physical existence of documentation may verify specific elements of the audit criteria. Audit criteria could require documents such as a procedure, manual or specific records that can be verified as physically existing during the document review.
Verifying that documentation addresses specific audit criteria requirements goes a level beyond the verification of the physical existence of documents, procedures or records. For example, if the audit criteria require causes of nonconformities to be identified, an auditor could verify that the procedure includes a step to identify causes of nonconformities.
What you learn here, however, is inconclusive. Even if the specific requirement is addressed in the documentation, the organization might not be practicing it. If your industry sector requires MS documents to incorporate text to address all requirements, there will be a nonconformity if a procedure does not address specific elements in the audit criteria.
Some industry sectors require documentation that has word-for-word traceability between the MS documentation and audit criteria. Requirements of the standards and regulations related to the processes and products being audited. Sections of the MS manual that relate to the processes being audited.
Any procedures that relate to the audit. Process models or other documentation describing the processes being audited and their interaction with other processes.
Work instructions, forms and records pertinent to the audit. Additionally, document reviews for second-party audits may include purchasing documents, such as a contract, specifications, purchase order requirements and other agreed-on forms or records.
Performance Next, ISO says the review should take into account the size, nature and complexity of the organization, as well as the objectives and scope of the audit see the logistics box in Figure 1.
The objectives of the audit are paramount. The documents reviewed should be consistent with the scope, such as physical location or area, and audit criteria. The size, nature and complexity of the organization might have a major effect on time needed to conduct a document review.
The larger and more complex the organization and processes, the longer the review. There is a minimum time needed to conduct a document review, however, regardless of the size or complexity of an organization because the same audit criterion has the same elements that must be verified.
ISO says that in some situations, the document review may be deferred until the on-site activities start if this will not be detrimental to the effectiveness of the audit. It is perfectly acceptable to make the document review a prerequisite before the opening meeting. For external audits, there are several reasons for conducting the document review at the auditee location, such as: Intranet access security issues.
An extremely large or small amount of documentation. The confidential information issues. Usually, however, the auditee can provide the documents or access ahead of time. For internal audits, document reviews can be part of a routine audit of an area, rather than a separate document review.
Along the same lines of guidance, the standard says that in other situations, a preliminary site visit can be conducted to get a suitable overview of available information.Literature Review The theoretical basis for establishing a relationship between financial performance and internal control systems has been documented in various literatures.
Review selected key issues related to boards and audit committees. 4. Consider the role of the IAF in the governance structure.
Participants Management Board of Directors Audit Committee Internal and External Auditors Regulators/Associations The early internal audit literature, e.g., Sawyer, often portrayed. literature review The accounting definition of internal controls refers to a company’s system of checks and balances used to prevent loss and ensure adequate financial reporting.
Internal auditing in the Middle East and North Africa: A literature review Author links open overlay panel Mahmoud Al-Akra a Waleed . Request PDF on ResearchGate | The Americas literature review on internal auditing | Purpose – By conducting the global Common Body of Knowledge (CBOK) study, The Institute of Internal.
literature review According to Harvey and Brown (), the major components of internal controls are control environment, accounting system and control procedures.