Internal Audit documentation can become evidence in an investigation at a moment’s notice. Work performed years ago can once again become relevant based on new information. As a result, all audit work papers should be accurate and complete. And while the standards needed to perform an investigation are similar to those for internal audit engagements, there are some subtle differences.
Recently, I attended a great webinar by Workman Forensics titled Presenting Fraud Findings to Law Enforcement. It is very applicable to internal auditors because law enforcement may occasionally need to rely on our documentation.
I have seen my share of inaccurate and incomplete audit documentation over the years and have helped train more than a handful of auditors on proper documentation techniques. Audit projects can get bogged down and backed up by bad documentation. But the stakes become a lot higher if our work becomes the subject of an investigation from law enforcement. In these instances, our papers could literally be the difference between life and death, freedom or jail.
There are a few things auditors must remember when it comes to documentation:
3 Things Internal Auditors Must Know About Workpapers
- First, work papers must clearly document why specific items were included in the objectives and scope.
- Second, they must clearly describe how you evaluated the items included in the objectives and the scope.
- Third, documentation must clearly document and support the conclusions reached based on the evaluation performed.
3 Client Concerns From Documentation
Anytime these three objectives are not met, your documents will bog down your audit projects. Incomplete and inaccurate audit workpapers, can cause some of the following client concerns:
- First, clients will question your credibility.
- Second, your audit colleagues will lose confidence in you.
- Third, your audit projects will fail to fulfill their purpose.
Workpapers are a Fundamental Audit Skill
Creating wonderful workpapers, is one of the fundamental elements of being a good auditor. You can be the most knowledgeable person in your industry, have impeccable people skills and be perfect at writing reports, but the inability to create work papers that are complete, accurate, and easy to follow can cripple your career.
I’ve always been aware of the importance of audit documentation, however, after watching this webinar, the impact of bad workpapers became all the more prominent.
Here’s the link to the webinar. Take a look.
While you’re here, check out my new book titled Creating Wonderful Workpapers.
It is aimed at helping auditors overcome documentation issues.
Read part of the first chapter below.
