delivering meaningful audit reports local govt - scott webb nov 2013
TRANSCRIPT
IIA LOCAL GOVERNMENT INTERNAL AUDIT CONFERENCE 2013
Delivering Meaningful Audit Reports
Scott Webb CPA CMIIA CIA CRMA
Associate DirectorThe Internal Audit Bureau of NSW (IAB)
HOW CAN WE DELIVER MEANING?
1. Recognise the opportunity to communicate2. Recognise that we are communicating more than
just results3. Recognise to whom it is we are or may be
communicating4. Reduce impediments to clarity
• Also, we will discuss what effect does GIPA have on our communications?
1. RECOGNISE THE OPPORTUNITY TO COMMUNICATE
• Internal Audit reports• Are an opportunity • Look forward and be positive• Carpe Diem
2. WE ARE COMMUNICATING MORE THAN JUST RESULTS
• Improvement opportunities / value adds• Contract for action• Advertisement • Professionalism• Grasp of the business• Desire to be constructive and positive• Marketing capabilities
3. TO WHOM WE ARE COMMUNICATING?
• First rule of writing: write to your audience• Identify your readers• Internal and external– Audit Committee– Senior Management / GM– Councillors– Line Management– External Audit– Watchdogs– General Public?
3. TO WHOM WE ARE COMMUNICATING?
• Analyse your readers• What does each reader want to know?• What is each reader’s level of understanding?• What is each readers’ use of the report?
3. TO WHOM WE ARE COMMUNICATING?
• Generally two main reader types:• Higher levels:• Want to know overall risk level and commitment to
action• May not have detailed knowledge of the business• Will use report to improve governance
• Lower levels:• Want to know what is wrong & how to fix it• Will have detailed knowledge• Will use report to change practices
4. REDUCE IMPEDIMENTS TO CLARITY
1. Lead the reader 2. Be engaging3. Be positive4. Be logical, coherent and clear
Fully Effective
INTERNAL CONTROL EFFECTIVENESS RATING Substantially Effective
Partially Effective
Largely Ineffective
Totally Ineffective
4. REDUCE IMPEDIMENTS TO CLARITY
1. LEAD THE READER • Short, Punchy Executive Summary• Context (origin of audit, objective, scope & limits)• Overall report ratings
ASSIGNMENT INTERNAL CONTROL EFFECTIVENESS RATING Substantially Effective
4. REDUCE IMPEDIMENTS TO CLARITY
1. LEAD THE READER • Risk rate each finding• Conclude, then explain – use topic sentences:• The tender period was only two weeks, which is considered
far too short, may have been unfair to some tenderers and was the subject of some complaint from unsuccessful tenderers.
• Employee attitudes towards fraud and corruption have not been formally assessed, which could mean that the organisation’s zero tolerance approach may not be uniformly adopted or understood throughout the agency.
4. REDUCE IMPEDIMENTS TO CLARITY
2. BE ENGAGING• Be concise• Summarise and dump• Use the active voice (where appropriate)• Who did something to whom/what?• The cat sat on the mat (active)• Not the mat was sat upon by the cat (passive)• The mat was sat upon (also passive)
4. REDUCE IMPEDIMENTS TO CLARITY
3. BE POSITIVE (OR AT LEAST NEUTRAL)• Acknowledge satisfactory performance & consider
spelling it out • Use unbiased language• Let the facts speak for themselves• Biased: Highly confidential employee records were carelessly filed
in an unsecured cabinet to which any number of unauthorised employees had access.
• Unbiased: Confidential employee records were filed in an unsecured cabinet to which unauthorised employees had access.
• Send the message you intend
4. REDUCE IMPEDIMENTS TO CLARITY
3. BE POSITIVE (OR AT LEAST NEUTRAL)• Use Positive connotations, i.e. sell the benefits– Negative: Unrestricted access to blank cheques
exposes the risk of cheque fraud through misuse or theft
– Positive: Restricting access to blank cheques reduces opportunities for cheque fraud
4. REDUCE IMPEDIMENTS TO CLARITY
4. BE LOGICAL, COHERENT AND CLEAR• Make complete audit observations• IPPF Practice Advisory 2410-1 Criteria for
Communication, para 7• Condition• Cause• Criteria• Effect • Recommendation
4. REDUCE IMPEDIMENTS TO CLARITY
4. BE LOGICAL, COHERENT AND CLEAR• Use consistent, clear language
4. REDUCE IMPEDIMENTS TO CLARITY
4. BE LOGICAL, COHERENT AND CLEAR• Clearly link the recommendations to the
finding:• Cause-focussed• Condition-focussed• Recovery-focussed
GIPA
• Effects of GIPA:• Presumption in favour of transparency• Push for proactivity
• Is it really the end of the world?• IIA Guidance http://
www.iia.org.au/technicalResources/knowledgeitem.aspx?ID=229?
GIPA
• GIPA is an opportunity to further sharpen your auditing skills • Assume all reports will be made public• Do not sanitise• Focus on adding value• Use unbiased language• Consider proactive release: do a communications
plan
RECAP: HOW CAN WE DELIVER MEANING?
1. Recognise the opportunity to communicate2. Recognise that we are communicating more
than just results3. Recognise to whom it is we are or may be
communicating4. Make it simple for them to follow our
meaning5. GIPA is an opportunity not a threat
