COORDINATING WORK WITH EXTERNAL AUDITORS
General
IIA Standard 550 and Statement on Internal Auditing Standards #5 require coordination
of internal and external audit work to ensure adequate audit coverage and minimize
duplicative efforts. Since audit resources are scarce and work in departments
can be disrupted by too frequent audits we will coordinate our projects with
the Office of the State Auditor and other external review bodies.
The State Auditor’s Office performs annual financial statement audits of the
University. Other review bodies, such as the Southern Association of Colleges
and Schools and the Commission on Higher Education, evaluate programmatic and
regulatory issues. Individual departments or schools sometimes hire outside
consultants to study and evaluate aspects of University operations. Work performed
by each of these entities offers opportunities for coordination of efforts.
Coordination of audit effort can be accomplished through:
- periodic meetings to discuss matters of mutual interest, such as planned
audit activities;
- access to each others audit programs and working papers;
- exchange of audit reports and management letters; and
- common understanding of audit techniques, methods, and terminology.
Our approach to coordinating audit work has three major components:
- Long-range planning;
- Planning for individual projects; and
- Interaction or direct assistance during an external review.
Long-Range Planning
As part of the risk assessment and annual update processes, the Director of
Internal Audit will contact the State Audit supervisor who is responsible for
the University’s financial statement audit. The purpose of this interaction
is to discuss the long-term plans of the State Auditor’s Office and Internal
Audit, including major changes in scope, areas of emphasis, audit approach,
state or federal audit requirements, etc. and to identify opportunities for
sharing or relying on each other’s work.
The Director will also inquire with members of University management to identify
any recent reviews by consultants and/or other external groups whose work may
be relied upon.
The Director will incorporate the results of these discussions into Internal
Audit’s long-range audit plans and annual work schedules; copies of these plans
and schedules will be provided to the State Auditor’s Office.
Individual Internal Audit Projects
If there has been any work by external review bodies in the area being audited,
the in-charge should discuss the nature of these reviews with auditee management
and, if possible, review a copy of the related report. The nature and extent
of any work done by an external review body should be considered in establishing
the scope and objectives for the internal audit project.
In some cases, the nature of an internal audit project may not provide opportunities
for coordination of efforts. This situation may occur with misuse investigations
or when an external review has a higher materiality level or broader focus.
However, collective audit efforts should be coordinated to the extent practical.
Misuse investigations may require special coordination efforts with the State
Auditor’s investigative staff, Human Resources, the Campus Police, or the State
Law Enforcement Division. This topic is addressed in Section 13 of the Internal
Audit manual.
External Reviews and Audits
While the University Controller is the primary contact for the State Auditor’s
staff, Internal Audit will also work with the audit team during the annual financial
statement audit.
During the early stages of the annual audit, we will provide the State Auditor’s
staff with a list of projects performed and copies of audit reports issued since
the last annual audit. We will also make our working papers for these projects
available to the State Audit staff for the review.
The Director of Internal Audit will meet with members of the State Audit team
to discuss the upcoming audit and to provide information about internal audit
work that the State Audit team should consider relying on.
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