PRACTICAL INTERNAL AUDIT REPORT
Learning Objectives
I.INTRODUCTION
II. INTERNAL AUDIT REPORT
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I.INTRODUCTION
In practice, internal audit reports will be different from company to another company or country to another country.
Also internal auditors’ tasks are different, so they are assigned tasks that owners require to do.
II. INTERNAL AUDIT REPORT
What is an Internal Audit Report?
The internal audit report is a formal document where internal audit summarizes its work on an audit and reports its findings and recommendations based on that work. The internal auditor’s reports are provided as an assurance service in order for the user to make decisions based on the results of the audit. In practice, internal audit report may be different formats from company to another company.
Below is sample of internal audit report. Internal audit report given by Phnom Penh HR has two big sections – (1) executive summary and (2) finding and recommendation. Executive summary includes background, objective and scope, summary of key audit findings (Favorable Conditions Noted and Items Requiring Attention) and conclusion. Finding and recommendation have three parts such as deficiency, Implication/impact and Recommendation. Audited department manager will make comments that found by internal auditors.
ABC CO., LTD
INTERNAL AUDIT REPORT
To: User
From: internal audit department
Date: report date
Subject: objective audit
EXECUTIVE SUMMARY
Background
Background is summary of company and audited department (e.g Department A).
Objective and Scope
Objective and scope will identify objective audit and periods will be audited.
Summary of Key Audit Findings
summary of key audit findings has two parts- favorable conditions and items requiring attention.
Favorable Conditions Noted
This part will cover good points that audited departments complied with company policy and mistakes are not found.
Items Requiring Attention
This part is important for internal audit report users and internal auditors want users focused on these summary findings. This section will cover mistakes and noncompliance of policy by audited department.
Conclusion
It is conclusion for overall findings and it is acceptable or not.
FINDING AND RECOMMENDATIONS
This part will be discussed detail findings, deficiency, implication/impact and recommendation.
Example is as follows.
After auditing department A , we found the following items .
- Payment vouchers (e.g. PV1116017 and PV1116070) or original invoice from suppliers without putting Purchase Request (PR) as reference.
- ………
Above findings we will discuss details as follows.
1. PV or original invoice from suppliers without putting Purchase Request (PR) for reference
Deficiency
There are payment vouchers or original invoices from suppliers without putting purchase request number or document for reference of payment.
Implication/impact
This process can reach purchasing without approval or unreliable invoices from suppliers, and it can lead difficultly to verify payment vouchers with purchase request document.
Recommendation
Payment voucher or original invoice should be put purchase request number or attached purchase request document for supporting document as reference for payment, and purchase request should be approved by authoritative management.
Department A ’s comments
This section will be commented by Department A manager for what internal auditors found.
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Internal Audit Manager Department Manager
Signature & Date Signature & Date