Other Engagement Tools

by M. Iffan Fanani

What we learn?

Data GatheringData Review/

AnalysingSolution

Formulating

Tools:· Sampling· Interviewing· Questionnaires· Checklist· Third-party

Sources· Observation

Tools:· Analytical

Review· Computerized

Audit Tools and Techniques (CAAT)

· Process Mapping (Flowcharting)

Tools:· 5 Attributes· 5 Whys· Fishbone· Other

Approaches

What IPPF says?

• 2310 – Identifying Information Internal auditors must identify sufficient, reliable, relevant, and useful information to achieve the engagement’s objectives.

• 1220.A2 – Due Professional CareIn exercising due professional care internal auditors must consider the use of technology-based audit and other data analysis techniques.

• 2320 – Analysis and Evaluation Internal auditors must base conclusions and engagement results on appropriate analyses and evaluations.

Data Collection-Interviewing

Data Collection-Interviewing

• Four types of interviews:– A preliminary interview– Fact-gathering interview– Follow-up interview– Exit interview

• People dislike being evaluated, an interview should be planned, scheduled, and conducted (documented) appropriately.

Data Collection-Questionnaires

Data Collection-Questionnaires

• It is a list of questions to be answered by the auditees.

• Examples: Internal Control Questionnaires to understand the controls managed by the auditees.

• +: Questionnaire will be structured, detailed, economical, and easy to administer, yielding uniform information from all informants for accurate comparison.

• -: Difficult to prepare, time-consuming, potential for untruthful response, not-flexible.

Data Collection-Observation

• Observation constitutes weak evidence

• To be stronger evidence:– Require

auditee’s participation

– Take picture

Data Collection-Checklist

Data Collection-Checklist

• It is a compact yes/no questionnaire.

• What for:– As an audit-reminder devices helping an

auditor be certain he/she has asked all questions/observations

– As a quick method of gathering information from a respondent

– As controls to ensure all the correct activities complete the audit engagement.

Data Review-Flowcharting

• Flowchart: Pictorial method of analyzing and understanding the process and procedures involved in operations, manual or computerized.

– System Flowchart: for the entire system, including input, output, process, and files

– Program Flowchart: for specific steps within a program.

Data Review-Flowcharting

Process

Decision

Document

Data

Predefined Process

Online Stored Data

Internal Storage

Seq. Data

Manual Input

Card

Display

Manual Operation

Terminator

Ref Ext Ref Offline Storage

Database

Data Review-Flowcharting

Data Flow Diagram: Emphasize on flow of data; not process or function.

Solution – 5 Whys, 5 Attributes, Fishbone

• Why? Why? Why? Why?

• Condition-Criterion-Effect-Cause-Recommendations

• Fishbone Analysis Diagram

Example: The worker fell. Why? Because of oil on the floor. Why? Because of a broken part. Why? Because the part keeps failing. Why? Because of changes in procurement practices.

Solution-An ExampleDumping Area

SlidingHeavy Rain Inadequate

Water Drainage

Inappropriate Dumping Location

Ineffective Mine Planning

Excessive Target

End