The Audit Observations Update Dashboard
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Many companies still do not have tools to track, monitor and report audit observations.
The Audit Observations Update Dashboard is a simple design and effective approach to keeping
track of, monitoring and reporting on audit observations.
An effective method to strengthen internal controls.
OBJECTIVE & FEATURES
✅ THE DASHBOARD
The Audit Observations Dashboard was created to help you if you do not have automated
systems for tracking, monitoring, and reporting audit observations. It is an Excel-based template
that can make monitoring audit observations more efficient.
✅ THE OBJECTIVE
• Strengthen Internal Controls
• Addressing manual tracking challenges.
• Excel platform for familiarity.
• Integrated tracking, monitoring, and reporting.
• Generating presentable visual insights.
✅ KEY FEATURES
1. No. of Observations: Displays the total number of observations recorded in the system.
2. Description of Observations: Provides a brief description of each observation made during
audits.
3. Level of Risk: Indicates the risk level associated with each observation – High, Medium, or
Low.
4. Due Date: Shows the deadline for addressing each observation.
5. Completion Status: Displays whether each observation has been completed (Y) or not (N).
6. Overdue Status: If an observation is past its due date, it's marked as 'overdue.'
7. Bar Graph: A graphical representation of observations categorized by risk level (High,
Medium, Low) for easy visualization.
8. Status Column: Provides updates on recent audits, findings, and upcoming audits, giving a
snapshot of the audit progress.
9. Justification and Plan Challenges: If an observation is overdue, this column explains the
reasons and outlines the plan to address the challenges.
10. Revised Dates: This column highlights revised completion dates for overdue observations.
11. Automatic Updates: Key statistics, such as the number of observations and bar graphs,
update automatically as new data is entered.
THE REPORTING PROCEDURE OF AN INTERNAL AUDITOR
The reporting procedure of an internal auditor is a critical aspect of their role in an organization. Internal
auditors are responsible for evaluating and improving the effectiveness of an organization's risk
management, control, and governance processes. Here's a general outline of the reporting procedure for
an internal auditor:
Planning and Preparation:
Before starting an audit, the internal auditor should develop a detailed audit plan. This plan should
include the objectives of the audit, scope, criteria, and the audit methodology to be used.
The auditor should also identify the key stakeholders and establish communication channels with them
to keep them informed throughout the audit process.
Conducting the Audit:
The internal auditor performs the audit fieldwork, which involves gathering evidence, conducting
interviews, and testing controls.
They should maintain thorough documentation of their findings, including any deviations from
established policies or procedures.
Preliminary Findings:
After completing the audit fieldwork, the internal auditor typically holds an exit meeting with the
auditee, where preliminary findings and observations are discussed.
The auditee has an opportunity to provide input and clarification on the findings.
Drafting the Audit Report:
Based on the audit findings, the internal auditor drafts an audit report. The report should include an
executive summary, a detailed description of findings, and recommendations for improvement.
The report should be clear, concise, and supported by evidence.
Review and Approval:
The draft audit report should be reviewed by relevant stakeholders within the organization, such as
management and compliance officers, to ensure accuracy and completeness.
The report may also undergo a peer review within the internal audit department for quality assurance.
Finalizing the Audit Report:
After incorporating feedback and making any necessary revisions, the internal auditor finalizes the audit
report.
The report is dated and signed by the internal auditor, indicating their responsibility for its content.
Distribution of the Audit Report:
The final audit report is distributed to key stakeholders, including senior management and the board of
directors.
A clear distribution list is maintained to ensure that all relevant parties receive the report.
Management's Response:
Management is usually given an opportunity to respond to the findings and recommendations in the
audit report. Their responses are often included as an appendix to the report.
It's essential for internal auditors to adhere to professional standards and maintain independence and
objectivity throughout the reporting process to ensure the credibility of their findings and
recommendations. Additionally, the specific reporting procedures may vary depending on the
organization's policies, industry regulations, and the nature of the audit.
ENTERPRISE RISK MANAGEMENT (ERM);
is a process that organizations use to identify, assess, prioritize, and manage risks that could impact their
ability to achieve their strategic objectives and goals.
some key concepts and components related to ERM:
1. **Risk Identification:** ERM starts with identifying potential risks that an organization may face.
These risks can be internal (e.g., operational, financial, compliance) or external (e.g., market, economic,
geopolitical).
2. **Risk Assessment:** Once risks are identified, they need to be assessed in terms of their potential
impact and likelihood of occurrence. This often involves assigning risk scores or ratings to different risks.
3. **Risk Prioritization:** Not all risks are of equal importance. ERM prioritizes risks based on their
potential impact and the organization's risk appetite. High-priority risks are those that could significantly
affect the achievement of strategic objectives.
4. **Risk Mitigation:** After identifying and prioritizing risks, organizations develop strategies to
mitigate or manage them. This can include implementing controls, diversifying investments, purchasing
insurance, or making changes to business processes.
5. **Risk Monitoring and Reporting:** ERM is an ongoing process. Organizations continuously monitor
the risks they have identified and assess whether their risk management strategies are effective. Regular
reporting to senior management and the board of directors is essential.
6. **Integration with Strategic Planning:** ERM should be integrated into the organization's strategic
planning process. This ensures that risk management is aligned with the overall strategic objectives and
that risks are considered when making strategic decisions.
7. **Compliance and Governance:** ERM often involves ensuring that the organization complies with
relevant laws and regulations. It also includes governance structures to oversee and manage risk
management activities.
8. **Stakeholder Communication:** Effective communication of risks and risk management strategies to
stakeholders, including investors, employees, and regulators, is crucial for transparency and
accountability.
9. **Scenario Analysis and Stress Testing:** ERM may involve scenario analysis and stress testing to
understand how different risk scenarios could impact the organization's financial performance and
viability.
10. **Technology and Data Analytics:** ERM increasingly relies on technology and data analytics to
identify, assess, and monitor risks. This includes the use of risk management software and data-driven
insights.
It's important to know that the COSO model interrelated with ERM framework.
Balanced Scorecard:-
The "Balanced Scorecard" (BSC) concept was originally introduced by Robert Kaplan and David Norton in
a Harvard Business Review article in 1992 and later expanded in their book "The Balanced Scorecard:
Translating Strategy into Action.
it involves the measurement and management of financial and non-financial performance metrics to
support strategic objectives.
Framework:
1. **Translate Strategy into Action**: help organizations translate their strategic goals and objectives
into measurable performance indicators that can be tracked and managed.
2. **Financial Perspective**: focus on financial metrics such as profitability, cost control, and return on
investment to assess the financial performance of the organization.
3. **Customer Perspective**: work to understand customer needs and preferences, measuring
customer satisfaction, loyalty, and other relevant factors that impact the organization's success in serving
its customers.
4. **Internal Process Perspective**: analyze and optimize internal processes, identifying areas for
improvement and efficiency to enhance overall performance.
5. **Learning and Growth Perspective**: are often involved in talent management and development,
ensuring that employees have the skills and knowledge required to execute the organization's strategy.
** use financial and non-financial data to create a balanced set of performance measures across these
four perspectives. By doing so, they help organizations gain a holistic view of their performance, which
can guide decision-making and strategy execution.
Have to Know that :-
In past the measurement based on financials measure
( objective and quantitively ) but maybe had some of manipulation,
but now the measurement based on non-financial also that lead
to drive future success financial performance- long term.
so and as result to BSC. :-
1-Improving the Clarify and communicate strategy.
2-Align individual and unit goals to strategy.
3-Link strategy to budgeting process.
4-Feedback and continuous strategy improvement.
