The Audit Process

Your involvement at every stage of the audit process is extremely important. The process works best when management and the auditor share a consultant and client relationship. This makes the project more collaborative and ultimately more successful. Although every audit project is unique, the audit process is similar for most engagements and normally consists of the following stages:

1. Projects Chosen for Audit

Internal Audit annually assesses the level of business risk throughout the District’s community. Our annual work plan is developed based on this risk assessment and in consultation with management and the Board Audit Committee

2. Planning

Audit planning includes establishing the objectives and scope of work, obtaining background information, developing the audit program, and determining how, when and to whom audit results will be communicated.

3. Entrance Conference

At this meeting, Internal Audit and management work together to finalize the scope, objectives and schedule of the audit. Any special areas of concern management would like the auditors to review can be brought up at this time.

4. Engagement Letter

The engagement letter spells out the audit objectives, scope, preliminary schedule and anticipated report date. Often, with the letter, management is given a list of documents and other items needed during fieldwork.

5. Fieldwork

This stage is what is typically thought of as the audit work. The auditor gathers and evaluates the information required to complete the audit program and meet the audit objectives. During this stage, Internal Audit will generally be working both in your area and in their offices. We discuss all observations with management and provide regular updates along the way so there are no surprises in the report.

6. Shirt Sleeve Conference

This conference occurs near the end of field work. Both management and the auditor discuss the issues noted and discuss appropriate corrective action. Any misunderstandings can be clarified at this time.

7. Draft Report

After completing fieldwork and discussing observations with management, we will develop a draft report. Copies of the draft report will be distributed to management prior to the exit conference.

8. Exit Conference

Comments regarding the audit and observations noted in the draft report will be discussed at this meeting. Attendees are typically those who also attended the entrance conference.

9. Final Draft

After the exit conference the final draft is issued to management. We ask management to write responses to the recommendations, explaining what action they plan to take.

10. Final Report Issued

A final report, including management responses, is presented to the Board Audit Committee for their review.

11. Feedback

Part of our audit process includes feedback from management. We want and encourage your feedback. We recognize your recommendations can help improve us.

12. Follow-up Process

At a designated time after the final report is issued (typically one year), we will follow up with management to determine what actions have been taken to address the recommendations.