An Analysis MFIA CONFERENCE 2015 Kim Spearing Masters in Accountancy 2015 Objectives To determine the importance and functions of working papers in IAing in Malta To analyse the manner of recording throughout the internal audit process ID: 337149
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Slide1
The Working Papers of Maltese Internal Auditors: An Analysis
MFIA CONFERENCE 2015
Kim Spearing
Masters in Accountancy 2015 Slide2
ObjectivesTo determine the importance and functions of working papers in IAing in Malta To analyse the manner of recording throughout the internal audit process
with reference to the following: Contents
Filing
Format of Working Paper Content Review process Ownership, Access and Retention To identify the electronic methods used in recording information
IntroductionSlide3
Research MethodologyA Qualitative approach was deemed to be the most appropriate method
Semi-structured interviews
were carried
out with 13 local companies and the Big-4 FirmsThe Triangulation Technique has been applied
Responses were transcribed and analysed using spread sheetSlide4
1ST OBJECTIVE
The Importance and Functions of Working Papers
RESULTS
Slide5
ReasonMean IA
Mean IAS
Mean
TotalProvide evidence of the work performed and support the results and conclusions reached4.8
4.8
4.8
Facilitate 3
rd
party review and a means for audit quality control
4.5
4.5
4.5
Assist in planning and performing an audit
4.5
4.3
4.4
Compilation of working papers during rather than at the end of audit
4.3
4.3
4.3
A record of significant matters for future audit reference
4.6
3.8
4.2
Demonstrate auditor’s decision-making process and factors considered
4.5
4
4.2
Working Papers are pertinent to audit objectives and ensure that they are being achieved
4.4
4
4.2
Evidence of compliance with professional standards
4
4
4
Prepared to increase the economy, efficiency and effectiveness of the audit
4.2
3
3.6
Working papers provide information to other departments and other users
3.1
3.8
3.4
Reflect changes in audit plan and procedures
3
3
3Slide6
Changes in the amount of documentation kept by the company
Standard Working PaperSlide7
Authorisation & Approval of Working Papers
Appropriateness of Recording InformationSlide8
2nd Objective
Recording the IAing Process
RESULTSSlide9
Time spent on documentation9 IA
- spend an average of 48%
of the audit on documentation4 IA – depends on the engagementIAS Firms
– spend an average of
29%
TheAuditPhase
that takes most time to document
7/17
– Execution StageSlide10
Documents Prepared and their ContentsPlanning stageSlide11
Documents Prepared and their contentsExecution StageSlide12
PreparersFormat of Working Papers ContentPlanning StageSlide13
PreparersType of Working Paper ContentExecution StageSlide14
Reporting StageProcess
A closing meeting held with the auditee to discuss draft report
3 IA – meeting with internal auditors to discuss the audit
Signature of the Report
Majority – signed by the Head of IAF
Content of Report
Findings, Recommendations and Management’s Action PlanSlide15
Auditee Satisfaction QuestionnaireIssues targeted by the questionnaire Reporting StageSlide16
Follow-Up StageTake Recommendations from Final Report and test whether these were implemented
Common Approach
IA
Follow-up performed in next audit & documented in final report
Discussed verbally and documented in minutes during BOD meetings
Discussed in AC meeting
IAS Firms
Another full scope audit –planning, testing and reportingSlide17
Reviewers of Working PapersReview ProcessSlide18
Electronic/ Manual ReviewPreparation of Review NotesReview ProcessSlide19
Distinction between Permanent and Current FileFilingSlide20Slide21
Liaising with External auditorsTo avoid work duplication & reduce testing due to time constraints (7/16)To obtain assurance and comfort that controls are in place and working properly (3/16)Better planning of the external audit (3/16)To determine what the internal audit engagement covers (2/16)To identify areas that merit more audit attention (2/16)The external auditor gets the assurance that the internal auditor is performing the tasks the external auditor has recommended (1/16)
Reasons for reliance on internal auditor’s workSlide22
Documents provided to External AuditorRequest for External Auditor’s Working PapersLiaising with External AuditorsSlide23
Records RetentionRetention Policy within Internal Audit DepartmentSlide24
RESULTS3
rd Objective
Electronic MethodsSlide25
Pro’sFacilitate search for files and the sharing of information between the audit teamSimultaneous access of the same document by different usersEasier to filter data, to amend and update working papersUse of templates is more possibleBetter control of access through passwords and varied degrees of accessElectronic audit trailNo physical storage spacePrinting is reduced
Con’s
Increased costs in maintenance and back-ups
Failure of I.T. systemStaff trainingElectronic Working PapersSlide26
RecommendationsSlide27
THANK YOU