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Internal Audit Drafting & Reporting. ICAI National Convention on Internal Audit Baroda 23 rd Nov 2013. CA. Sapan Gandhi Sharp & Tannan Associates. Content. Audit Journey 03 Query Listing 05 Drafting & Reporting 07 Ideate 09 Drafting 15 Editing 22 - PowerPoint PPT Presentation
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ICAINationalConventiononInternalAudit
Baroda23rd Nov 2013
Internal AuditDrafting &ReportingCA. Sapan Gandhi
Sharp & Tannan Associates
ContentAudit Journey 03
Query Listing 05
Drafting & Reporting 07
Ideate 09
Drafting 15 Editing 22
Formatting 32
Audit JourneyObjective
Program
Working Papers
Summary
Query Listing
Draft Report
Final Report
1. Query Listing
2. Drafting & Reporting
Presentation on
Internal AuditDrafting &Reporting
Query ListingThings to Follow & Review
• A query listing is “Complete” when it covers the following 5 dimensions of an audit finding.
• They are…. :
Sample Query ListingCondition
“What is” the current condition? Eg; Non moving Inventories more than 365 days are 38% of the total stock.
Criteria “What was” the ideal condition? Eg; Inventories more than 365 days are classified as Non moving
Consequence“What happened” as a result of mismatch between condition and criteria in terms of Risk and Impact? Eg; 38% of Non moving Inventories increase the risk of working capital not utilised.
Cause “Why – What happened” Reason – Route cause? Eg; No linkage between purchase requisitions and ordering.
Corrective Action“What needs to be done” to align criteria with condition? Eg; Linking requisitions with ordering and Inventory levels with requisitions.
Action plan “How will” the corrective action be implemented? Eg; Either through a automated control or manual controls.
Presentation on
Internal AuditDrafting &Reporting 1. Query Listing
2. Drafting & Reporting
Drafting & ReportingTime Allocation
Ideating40%
Drafting30%
Editing20%
Formatting10%
Presentation on
Internal AuditDrafting &Reporting
Ideate
IdeateLinking the Query Listing to the following three aspects:
QueryListing
Audit Objective
Target Audience
Accuracy
1. Audit Objective:• Check whether the overall message emanates
from the audit objective.For eg.; No point in highlighting Non moving Inventories when the Audit objective was to conduct an Production Efficiency Audit.
• Arrange ideas logically - findings to align with the Audit Objective.For eg.; Lack of firefighting equipments cannot be the first observation if the audit objective was verification of Non moving inventories.
2.Target Audience:a. Like most of products every audit report communication also has a different
set of target audience. b. Broadly, there are 3 types of target audience:
Decision Implementers
Generally called as Process Owners who are assigning the task to implement audit recommendations.
Decision Makers
Those who are incharge to ensure that multiple processes work smoothly to ensure achievement of business objectives.
Decision Governance
Those who have to ensure that correct decisions are taken and implemented.
What needs to be figured out ?
How to put your message “Best” across the target audience.
• Ensure double check on your numbers and facts.
• Double check your type, quantity and quality of your audit recommendations.
3. Accuracy
Presentation on
Internal AuditDrafting &Reporting
Drafting
Drafting
• Be flexible - don’t get too attached to what you have written.
• If its a long report, write in segments.
• One paragraph – one idea with clear, easy-to-read sentences in short .
• Avoid deadly sins of - Jargons , passive voice, drawn out verbs, empty/ repetitive/overstated words, redundant modifiers etc..
• Use Bullets to highlight key information. Usage of charts, photo, tables make information/message easily understandable, than words!
• Be specific, concise, clear & accurate.
Basics
DraftingAdvanced
1.Form &. Content
2.The first line
3.Fact v. Flow
1. Form & Content:• Can just a well presented report make for a good report ?• Alternatively, can an exhaustive indepth report always
convey a right message ?• Content is the most critical and yet one needs to strike a
perfect balance between the two.
FormConveying the Best
message
ContentSubstance for a Best
Message
2. The first line• Spend 80% of your time in writing the first line. Why??
The first line
3. Fact v. Flow:Shami sends Windies crashing as India win by an inningsMohammed Shami was the wrecker-in-chief as India scored a resounding innings and 51-run victory over the West Indies in the first Test at the Eden Gardens in Kolkata on Friday.Victory, sealed with well over six sessions left, gave India its fifth Test win in a row, after the 4-0 whitewash of Australia earlier in the year.
Needing 220 to make India bat again, the West Indies could muster only 168 in their second innings.Debutant pacer Shami utilized the swing available to optimum effect to pick five wickets for 47 runs, to go with his four-wicket haul in the first innings.
India Bowling O M R W Nb RPO
Bhuvneshwar Kumar
6 1 20 1 0 3.33
Mohammed Shami
13 0 47 5 0 3.57
Ravichandran Ashwin
19 2 46 3 0 2.42
Pragyan Ojha 13 3 27 0 0 2.08
Sachin Tendulkar
3 0 18 0 0 6
Match Scorecard
3. Fact v. Flow:In the same manner
Instead ofReview of analysis of inventory noted that 25 % of inventories are classified as non moving given in the table below (Rs in lacs)
Item Value % of Total Inventories
X 25.00 10 %
Y 12.50 5%
Z 25.00 10 %
Total 80.00 25 %
• 25 % of Rs 320 lacs inventory is classified as non moving.
• Item X used in FG A constitutes 10 % of it. The item was procured in excess of planned production and hence lying as non moving
• Item Y & Z used in FG B, though was procured scientifically – unreported quality issues contributed to it bieng not used .
We also can
Presentation on
Internal AuditDrafting &Reporting
Editing
EditingBasics• Editing required for organization, readability and errors/proof
reading.
• Editing is rewinding/relook at report to ensure,
Meets its objective, concise, clear ? Logically organized with complete content ? Key findings/element/issue fully supported ? Jargons/other deadly sins are eliminated ? Message understandable to audience ? Sentences vary in length, and are most of them short? Sentences active voice used wherever possible?
EditingWhat to avoid ??
Filler Phrases
Redundant modifiers
Empty Words
Passive Voice
Repetition
Drawn out verbs
Overweighed words
Presentation on
Internal AuditDrafting &Reporting
Formatting
Backdrop Finding
Action Plan Target Implementation Date
Reporting Format (Recommended)
Questions ??
Thank You
CA. Sapan GandhiPartner, Sharp and Tannan Associates+91 9687 227 [email protected]