BACK TO BASICS
management to explain major risks they
face in achieving business objectives.
Framing the discussion in this way
focuses attention on challenges and
opportunities for improvement rather
than on how managers are performing.
Auditors should tell management in
advance that they will be asked about risks
so they can have time to think about their
answers before the meeting.
rating and explain the meaning of ratings scores.
Did we ask for your input and participation during the audit?
Did we treat your personnel with
Auditors should present the questions
during the opening meeting and then
review them during the closing meeting
when management is asked for its formal feedback.
REPORTING One key area of interest to
management will be the way in which
internal auditing plans to communicate
the results of the audit. Auditors should
discuss the audit reporting and follow-up
process, as well as any other planned
means for providing audit feedback.
When explaining these processes, auditors may want to use the word results
rather than findings to describe the information to be provided. Because findings
often carries a negative connotation, using
this term may give the impression that
the audit group intends primarily to look
for deficiencies in management’s work.
The term results, however, carries a more
favorable connotation, and using it can
help establish a positive starting point for
The discussion of reporting should also
cover whether or not the auditors will
issue a formal rating or opinion on the
status of controls at the end of the audit.
If a formal rating will be issued, auditors
should review the criteria used for the
WRAP-UP Because managers are often
pressed for time, they will likely be anxious to know how long the audit will
last. Auditors should either set a firm
exit meeting date or offer a target date
for the conclusion of the audit. Some
audit groups also share the budgeted
number of audit days with the audit CLOSING MEETING
client to convey the level of effort to The closing, or exit, meeting represents
be expended on the engagement. In the final chance for internal auditing to
addition, some groups tell management display its professionalism and presen-the price of the audit to the organiza- tation skills, as well as an opportunity to
tion, using the number of budgeted days maintain a positive relationship with the
multiplied by the average cost of an client. Auditors usually hold the exit meet-audit day. Providing this information ing at the end of fieldwork and approach
focuses everyone on the importance of it as a “nonevent.” In other words, there
efficiency and effectiveness during the should be no surprises during the exit
engagement. meeting, and all issues should be resolved
before the meeting begins. To ensure the
final meeting runs smoothly, auditors may
need to conduct a series of pre-exit meetings to tie up any loose ends. Then, the
“real” exit meeting — often attended by
senior managers who did not directly participate in the audit — can be confined to
a presentation and discussion of the audit
process and results, rather than serving as
a working meeting. During the discussion, auditors should keep the following
areas of concern in mind.
FEEDBACK Many audit groups ask for
audit client feedback, often in the form of
a client service evaluation, after the engagement is complete. Auditors should set the
stage for this evaluation during the opening meeting, as the evaluation questions
can then be used as a “contract” between
internal auditing and the client regarding
how the auditors should conduct themselves during the audit. Useful questions
for client evaluations include:
Were we professional?
Did we keep you informed on the
status of the audit?
Successful Meeting Habits
Several principles can be used to increase the effectiveness of almost any type
of meeting. Keeping these practical tips in mind for opening and closing meetings will help focus your discussions and increase meeting productivity.
‡Plan the meeting well in advance.
‡Publish the location, attendees, and reason for the meeting in advance.
‡Invite the right people, and make sure that everyone who attends feels free
‡Distribute lengthy materials in advance of the meeting.
‡Bring extra copies of meeting materials, in case any of the participants forget
to bring their own.
‡Prepare a formal agenda and stick to it.
‡Begin and end the meeting on time.
‡Stay focused on the objective of the meeting.
‡Treat all meeting participants with respect, and maintain a positive attitude.
‡Use audiovisual aids effectively, and develop a contingency plan in case of
‡Be sure everyone knows the “next steps” and who is responsible for each.
‡Record the results of the meeting in the audit workpapers or within other
BALANCED REPORTING Although most
audits will identify issues that management needs to address, auditors should
refrain from focusing entirely on the
negative results of the engagement. In
most cases, the majority of items examined during an audit do not lead to any
negative findings — an indication that
most of the client’s activities are functioning effectively. Internal auditors
should balance their reporting by mentioning these positive outcomes of the
review. For example, auditors should be
sure to tell management about the
important controls they tested and found
working well. This discussion can be
particularly useful if the auditors can link
the working controls to the key risks
identified by management in the opening meeting.
DRAFT REPORT AND RATING Most audit
departments try to prepare a draft audit
report for management’s review at least a
day before the exit meeting. Review of
INTERNAL AUDITOR FEBRUARY 2004