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.
Last week I attended a great webinar by Workman Forensics titled Presenting Fraud Findings to Law Enforcement. It is very applicable to internal auditors. It further underscores the importance of our workpapers.
Over the years I have seen my share of incomplete and inaccurate work papers and have helped train more than a handful of auditors on proper work paper techniques. Our audit projects can be bogged down and backed up by bad work papers. But the stakes become a lot higher if our workpapers become 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 Auditor Must Know About Workpapers
- First, work papers must clearly document why specific items were included in the objectives and scope.
- Second, work papers must clearly describe how you evaluated the items included in the objectives and the scope.
- Third, audit work papers must clearly document and support the conclusions reached based on the evaluation performed.
3 Client Concerns From Bad Workpapers
Anytime these three objectives are not met, your work papers will bog down your audit projects. Incomplete and inaccurate audit work papers, 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 work papers, 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 about workpapers. Titled Creating Wonderful Workpapers. It is aimed at helping auditors overcome documentation issues. Read part of the first chapter below.
Sign up to win a copy here