3rd September 2014 Sonali Raut, CA, CISA DGM-Internal Audit, Voltas Ltd.
Role and responsibility of Internal Audit Sharing of best practices Model of operation In conduct of audit assignment Other functions of audit Conduct of meetings Actionables tracking Reporting to Audit Committee Team engagement Thoughts on best practices 03/09/2014 2
Reporting responsibilities to Audit Committee and management Companies Act, 2013 Institute of Internal Auditors Conduct and timely completion of audits Organisational set-up of the function 03/09/2014 3
Adopt co-sourcing model instead of outsourcing Participation of Chief Internal Auditor (CIA) in Closing meeting of every audit assignment Reports issued under CIA signature 03/09/2014 5
Planning Scheduling Execution Pre-audit Field work Closing of assignment 03/09/2014 7
Risk based Annual Audit Plan Based on inputs sought from Audit Committee from time-to-time Business unit heads Chief Finance officer (CFO) Statutory auditors Past audit reports Circulation of annual calendar to all business unit heads and CFO 03/09/2014 8
Communicate commencement and closing dates of audit well in advance at least 10-15 working days in advance Recipients-direct auditees, regional heads, CFO Areas to be covered in audit Audit objective and scope Model the number of days for pre-audit, field work and review Circulation of day wise audit schedule Mock closing meeting 03/09/2014 9
Pre-audit Walkthroughs with auditees Rounds of discussion of audit objective, scope and checklist Procuring data from auditees for analysis and sample selection 03/09/2014 10
Field work Should start with an Opening meeting Continuous interaction for sharing and resolving of queries with auditees Continuous internal reviews with agreed timelines Draft report circulation Mock Closing meeting Discuss observations Seek draft management response Pragmatic recommendations Seek management responses in writing Specific Action Plan and target date Final Closing meeting Release final report within 15 days of Closing meeting Documentation 03/09/2014 11
Time bound and meeting invites for blocking of calendar Presentation-focused, crisp and engaging Feedback sessions Auditees-on areas for improvement Auditor-Give feedback to auditees Internal with team 03/09/2014 13
Track target dates for actions taken and report status to Audit Committee on half yearly basis Compliance testing during the next audit and highlight deviations, if any 03/09/2014 14
At least two Audit Committee meetings in a year exclusively for discussion of internal audit agenda Report significant audit findings Advance review with management team of presentations to be made Papers of agenda sent at least a week in advance Effective time management Systematic follow-up on actionables of all audit findings 03/09/2014 15
Retention of talent Monthly meets of the team Declaring a best performer of the month Encourage participation of team in the meets eg. presentation on topics of interest, academic or of professional interest Annual off-site meet Performance appraisal Measurable goals Appraisals are based on empirical data captured for each assignment 03/09/2014 16
Some other good practices could be: Use of tools for statistical sampling Rotation of high fliers in organisation Development of auditing and soft skills Involvement of audit team in process improvements Continuous review and revisit of the internal audit practices adopted is the key 03/09/2014 17
Thank You sonaliraut@voltas.com 03/09/2014 18