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Audits can be divided into four categories: preliminary, process-based, validation, and risk. The purpose is to review compliance with policies and legal obligations. Audits can be performed on any documented process. Questions are asked to gain an understanding of the organization, processes, and risks.
Audit questions can be divided into four main categories: preliminary, process-based, validation, and risk. The primary purpose of an audit is to review an organization’s level of compliance with policies and any legal obligations. Although most people think of an audit in connection with financial statements, an audit can be performed on any process that is documented and has transactions that can be reviewed. Audit work is the most effective way to identify gaps in actual processing, identify risk areas within the operation, and ensure proper procedures are followed.
Preliminary audit questions focus on obtaining an understanding of the organizational structure, customers, suppliers, and primary business operations. During this stage, common questions to the executive include areas of concern, any fraudulent or suspicious activity, and the primary purpose of the audit. This information is essential for the auditor to determine which processes are included in the audit scope and who to contact to gain access to the files.
During the preliminary phase of the audit, it is very common for the auditor to request access to the operations manual, copies of company policies, and any documentation regarding the use of various systems or business processes. He or she will review this material for completeness, accuracy, and overall quality. Using this information as a reference point, the auditor will create an audit plan that focuses on determining compliance with established procedures.
Process-based audit questions are addressed to the staff members responsible for completing the actual processes. For example, an accounts payable clerk will be asked if he has received training on the company’s accounting policies, the reporting system, or general accounting. The employee may be asked to explain how he will process a request for payment that is more than a specific monetary value. Other questions may include end-of-month and end-of-year procedures, checking security, and payment schedules.
After the auditor has independently evaluated the sample transactions, they will have questions based on the evidence collected. These questions are very specific, focused on the specific transaction, and are used to answer any questions about actual business practices. For example, if an expense reimbursement was processed without the signature of the employee’s manager, the person who processed it will be asked to explain how this occurred. The response provided is included in the audit file and the final report.
Audit questions on the security of documents, materials and staff members are used to assess specific risks. Other questions used to highlight risk include the receptiveness of staff members to instructions from superiors, the level of compliance with these instructions, and the general work environment. The level to which managers are involved in daily operations is another question area used to identify the level of risk.
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