OPERATIONS AUDIT: OBJECTIVES AND PHASES OF AUDIT
Introduction
An operational audit involves a review of the activities performed in a program or process in the pursuit of its objectives by individuals, who are often supported by a variety of tools (Murdock, 2017).
Within the tenets of that definition, an internal auditor can render an audit review for the operational activities of an organization. This is to assess the operating effectiveness and efficiency of the organization's policies.
The aim of an operational audit is ultimately to optimize efficiency. By auditing the business's internal policies and procedures, the company can identify trouble spots and operate more effectively (Accountants Go Cardless, n.d.).
Operational auditing challenges
One factor to consider before ordering an operational audit is that it does cost both time and money. When managers and employees are engaged with the audit, they will be pulled away from their usual activities. For complex organizations, an operational audit can be relatively time-consuming because each step of the process must be analyzed.
Business owners should also be aware that operational audits can turn up unexpected problems that take time to repair. This might involve a complete overhaul of existing systems, requiring new training for employees. In the long run, these disruptions can be worth the trouble, should the operational audit lead to a more efficient method of doing business.
DISCUSSION ASSIGNMENT WEEK 2
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
Please provide your answers with a minimum of 250 words and a maximum of 500 words. REPLY TO AT LEAST THREE of your classmates' perspectives to Operational Auditing. Please observe proper citation and use APA format 7th edition. RATE IS NO LONGER NEEDED.
NOTE: Please indicate your NAME and STUDENT NUMBER at the end of your post.
FOR REPLIES TO AT LEAST THREE CLASSMATES: Please indicate as FIRST LINE HEADING, the name of the student you would like to reply.
Cut-off date in posting to this discussion forum is until October 17, 2021 11:55PM Philippine Time.
NOTE: Do not create a new question. Please answer directly on the first discussion posted below by Prof. Markie Grabillo.
An audit phase determines whether an organization’s processes are working inside set-up limits. It measures conformance to any predetermined or standard, as well as the effectiveness of every phase. Audit phases are basically step-by-step guidelines for operational auditors that will serve as the roadmap towards successful management. Operational audits are structured in the traditional (1) Planning which includes scoping, budgeting, defining the population of interest, how testing will be performed, and announcing the audit, (2) fieldwork which executes interviewing, documenting, applying testing methodologies, managing fieldwork, and providing status updates. (3) Reporting phase which consists of communicating findings, observations, and best practices noted during the review, and developing recommendations for corrective action. Lastly, (4) Follow-up which means that the auditor is checking to make sure the corrective action was performed, so it consists of checking what management did to address the issue reported. These phases provide a simple, effective, efficient, and time-tested approach to organizing, performing, and communicating the results of the work done (Murdock, 2017). Moreover, following audit phases will result in a balanced and fair audit as this is the key metrics for us to achieve quality audits. The organization will then be able to assess the effectiveness and adequacy of the process as established by work instructions, controls procedures, training, and process specifications. Through these phases, the metrics exist as to how we are going to compare the things that should be done from the things that are actually done.
ReplyDeleteReferences:
Hernan, M. (2017). Operational Auditing. CRC Press.
Juran. (2020). The Importance of Quality Auditing. https://www.juran.com/blog/the-importance-of-quality-auditing/
Along with the objective of operational auditing, it is also important to follow audit phases to fulfill the standards of the organization. According to Zimba (n.d.), being involved or keeping informed in every stage of the audit process is essential to obtain the best result while working together. The approach works best when auditors and people in the organization have a strong and productive working relationship built on open and constant communication. By following the phases, it will assist to guarantee that there are no surprises during the audit and that the final output is better. Operational auditors utilize this method to analyze statements and identify gaps in present procedures so that necessary changes may be made. The audit phases or stages guarantee that it is carried out thoroughly and that the report contains information whose validity can be established and is precise.
ReplyDeleteAudit phases can achieve a balanced and fair audit. The audit cycle comprises several phases that the auditor must complete for the audit to be completed correctly and without data manipulation, which would portray the company in a negative way. Through the phases, the process may be efficiently tracked, ensuring that no tasks are delayed and that the audit is completed on time. It also focuses on a systematic approach that would result for an audit phase or cycle to be a considered as a reliable report. With this, it enables the operational auditor to depict and communicate the audit's progress to management to provide a balanced and unbiased report based on the facts presented and a thorough understanding of the business as a whole.
References:
Ramachandran, A. (n.d.). What is the Audit Cycle? Retrieved October 6, 2021, from https://www.wallstreetmojo.com/audit-cycle/.
Zimba, A. (n.d.). Audit Process and Phases. Retrieved October 6, 2021, from https://www.arcadia.edu/university/offices-facilities/finance-administrative-services/office- internal-audit/audit-process.
- JOANNA ELAINE O. MACANIP (2019-103856)
An operational Audit examines the processes, systems, and procedures of an organization and it aims to have efficiency, productivity, and effectivity in a business or different departments. We have already established the importance of operational auditing and the responsibilities they have in a business. Their role is really crucial that even a small amount of mistake can bring a major setback for the business. It focuses on possible improvements for your business processes—it isn’t just concerned with your mistakes and achievements. In order to achieve efficiency and effectivity, Operational Auditing phases was created and followed since it seems plausible in that type of situation. I believe that phases give organization and guidance to the auditor for a best outcome that everyone wants. As you can see, the structure of the phase supports the risk-based audit approach considering the university-wide risk assessment it performs after knowing and understanding what the project is about. Moreover, the results of the operational auditing phases can achieve balance and fair audit since it thoroughly assesses the risks founded during in the selection process. Then immediately supports by performing a background information check by having a full picture of your company’s state before developing a new guidelines and procedures. In conclusion, the phases of operational auditing provide room for improvement analysis during the execution of fieldwork that leads to a higher rate in augmentation. With a guideline like this, which strains and explore the project, itself, for a best outcome they can provide, can lead to a balance and fair audit
ReplyDeleteReferences:
qvalon. 2021. Operational Audit Overview: ☝️ Definition, Process, and Purposes Retrieved from https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
Mark Grabillo. 2021. OPERATIONAL AUDIT: WHAT ARE ITS PHASES. https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
-ASHLEY P. HABON (2019-102695)
There are five phases of audit process: Selection, Planning, Execution, Reporting, and Follow-up. Following this five phases of auditing helps the auditor to assess if the policies and procedures of the business is still effective and efficient in the operation. It also identify possible risk that may occur in the business. Following the phases of audit makes the operational audit successful. Here are the three of the primary outcome of a successful operational audit: 1. Maximize efficiency: Gain a greater understanding of how future policies and procedures can boost effectiveness. 2. Understand risks: Businesses run many operational risks, ranging from health and safety issues to cyber threats. A full operational audit identifies risks like these, as well as potential problems related to fraud and compliance. 3. Fine-tune internal controls: By examining each step of the operational process, an audit can dive deeper into the impact of any changes to internal controls (Grabillo, 2021). Also, it can achieved a balanced and fair audit because the auditor verify, trace, vouch and reconcile the information they receive. As to verify, it confirms, proves, or corroborates that a fact is true. In trace, it involves tracing a transaction from the source (e.g., a cash receipt, file creation) to its destination, which could be a financial, operational, or regulatory report. For vouch, it involves the “reverse-trace” of a transaction from the destination (e.g., financial, operational, or regulatory report) to its source (e.g., sales order, purchase, and time sheet). And reconcile, Tie information from two separate sources to verify the accuracy or expected discrepancies (Murdock, 2017).
ReplyDeleteReferences:
Grabillo, M.A. (2021). Operational Audit: What are its Phases? Accessed October 08, 2021. https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html?m=1
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor and Francis Group, LLC. pp. 40
-Maria Eloisa A. Ramos (2019-101335)
ReplyDeleteAccording to Murdock (2017), Operational Auditing defined as “a future-oriented, systematic, and independent evaluation of organizational activities.” As it was mentioned it is “systematic”, it follows certain procedures to come up with a relevant and reliable evaluation that’s why the audit phases are very important. Grabillo (2021) stated that there are Five (5) Audit Phases which are Selection Phase, Planning Phase, Execution Phase, Reporting Phase, and the Follow up Phase.
In Selection Phase, we identify the audit activities of the entity by using a risk-based approach. It is important because we are selecting and discussing the possible risk that we may encounter to achieve the objectives. Next is the Planning Phase, I think this is the most crucial phase out of the 5 phases because poor plans can lead to an inefficient audit. This phase will take too much time. It is important because auditors need to strategized an effective, timely, and relevant evaluation. In this phase, auditors will gather all the relevant information so they can come up with best solutions to the possible risks in the future. This phase will be helpful to identify priorities and help define how the organization should allocate its limited resources. Then, there is the Execution Phase, in this phase the plan is already carrying out. This phase is important because if a plan is not executed successfully, all of the good work associated with strategy, solutions, and other ways to grow will be a waste. Also in this phase, we can prove our credibility as an auditor to our clients to trust on our evaluation. Next is the Reporting Phase, it is the communicating phase (Mudrock, pg. 54). It is important because in this phase, the conclusions, findings, and recommendations are given to the clients so they can properly make a wise decision. The auditor must deliver the evaluation clearly and independently. Last, the follow up phase, which is necessary to do by the auditors and the management to verify their findings based on the time that the risk occur. It is important because this phase, the accuracy of the findings will be the success of the auditors.
If these phases are follows orderly then the auditors can say that they achieve a balanced and fair audit. Because these phases, Auditors analyze the client’s background and give an appropriate evaluation to the possible risk so they can achieve their goal.
-OMPAD, ME-AN JOY A (2019-104916)
REFERENCES:
Grabillo, M. A. (2021). Operational Audit: What are its Phases?
https://markgrabillo.blogspot.com/2021/10/operational-audit-what-
are-its-phases.html
Murdock, H. (2017). Operational Auditing Principles and Techniques for a Changing World.
https://ertu.online/pluginfile.php/286094/mod_resource/content/1/
Operational%20Auditing%20The%20Principles
%20%20Techniques%20for%20a%20Changing%20World.pdf
-OMPAD, ME-AN JOY A (2019-104916)
Phases are very important in every aspect of life. This ensures that the outcome produced at the end of each phases meet their purpose. It allows the projects to develop on its own time and not compromising the result. Equally, operational auditing has it own phases to follow, by adhering with these phases, audit reports can provide assurance that an organization is operating effectively in terms of risk management, governance, and internal control processes. Operational audit has five phases that includes selection, planning, execution, reporting, and follow-up. Selection phase is selection of audit activities using a risk-based approach. During the development of an annual audit plan, internal audit must abide with leadership and management to assess risks and potential hindrance to meet objectives. Planning started from defining the scope and objective to developing audit steps to meet objective. In fieldwork phase, auditors conduct the steps identified in the planning process. While in reporting phase, auditors discuss the result of the audit, specific findings, recommendations, and observations. Lastly, follow up by the name itself, it is the following up to the management corrective action plan to assure that the plans are implemented. Complying with the phases of auditing process achieve balance and fair audit because it undergoes thorough study and analysis by the professionals and leaders of an organization. This process assesses the managements vulnerability and making a careful plan to reduce the risk in the organization.
ReplyDeleteWhat is Internal Audit. (n.d.). Chartered Institute of Internal Auditors. Retrieved October 4, 2021, from https://www.iia.org.uk/about-us/what-is-internal-audit/
The Office of Internal Audit. (n.d.). Audit Process. University of Oregon. https://internalaudit.uoregon.edu/report/audit-process
-RHEA MAE D. YUGA (2019-103574)
Audit commonly refers to the auditing of financial statements. As defined by Touvila (2020), auditing is where you objectively examining and evaluating organization’s financial statements to verify that the financial records are represented fairly and with accuracy of the transaction they represent. Moreover, the financial statements must be aligned to the generally accepted accounting principles relevant to the country where it belongs.
ReplyDeleteAs per the discussion of PwC (2017) - in their work entitled “Understanding a financial statement audit”, they give emphasis to that of internal audit report as a collaborative effort, wherein it works best should the auditor himself or herself has a firm working relationship and open communication with the management he or she is serving. Hence, they have summarized and come up with these five (5) phases of an audit namely: planning, risk assessment, audit strategy and plan, gathering evidence, and finalization.
Furthermore, during all these phases, auditor should make sure that it is being communicated to the higher-ups of the company (i.e., Board of Directors). For there should have a continuing discussion/meeting with the management – operation, senior executives, and those in-charge with governance; so that their ideas, be it a skeptical or judgement, the auditor can challenge these assertions most especially the ones disclosed in their financial statements.
Thereupon following the steps aforementioned, it can surely achieve balance and fair audit. Balance and fair audit would tell that the financial statements are free from any material misstatements and is faithfully represents the performance and position of the entity (Ali, n.d.).
References:
Ali, A. (n.d.). True and Fair View of Financial Statements. Accounting Simplified. Retrieved October 2, 2021, from https://accounting-simplified.com/audit/concepts/true-and-fair-view/
Touvila, A. (2020, August 15). What is an Audit? Investopedia.
https://www.investopedia.com/terms/a/audit.asp
PwC. (2017, May). Understanding a financial statement audit. https://www.pwc.com/im/en/services/Assurance/pwc-understanding-financial-statement-audit.pdf
Jerick E. Guasin ; 2019-105702
An organization undergoes an audit for its systems, procedures, and policies in order for the auditor to examine and evaluate that the business operates efficiently and effectively in order to achieve its goals and objectives. In order to obtain the best possible outcome in auditing that the management wants, it is important to follow the phases in auditing. These phases will serve as a guide or flow in properly conducting examination and evaluation of the day – to – day operations of the business, so that, none of its components needed in auditing will be missed out. Audit phases involve four phases: Planning, Fieldwork, Reporting, and Follow – up phases; each involves a different set of people. These mean that it can build a strong connection between the members of the organization because everyone will be communicating. Every phase has different objectives in order to carefully plan and audit the operations of the business. Such as in Planning Phase, according to Murdock (2017), it includes scoping, budgeting, defining the population of interest, how testing will be performed, and announcing the audit. This is also the most important phase of an audit. As my professor said, “Audit without a plan is like performing without a goal.” Second, in Fieldwork, it is when gathering and testing the evidence is performed. While in Reporting, it is when the communication of results to the stakeholders and developing recommendations. Lastly, Follow – up Phase, in which auditors verify the action plans agreed upon are applied and fixed the issues as expected. Consequently, following the audit phases can achieve balance and fair audit as there will be a thorough assessment, ensuring that the audit is properly done without the influence of others and is supported with data to produce the management a reliable report that would help them understand and address the issue.
ReplyDeleteReference:
Murdock, H. (2017). Operational Auditing Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. pp. 36.
MARVIE JAY N. SAYSON (2019-100731)
In cooking, building a machine, conducting a scientific process, or even accounting, following phases is essential because it leads to a better outcome or comes up to its purpose. Phases serve as a guide to doing the job better, efficiently, and effectively. That is why following audit phases is essential for an internal auditor. An audit phase has five phases: selection, planning, execution, reporting, and follow-up. Each phase is a crucial factor in ensuring that the audit planned that is being conducted is free from bias and accurate.
ReplyDeleteThere is a lot of importance in following an audit phase. It leads to better communication with each individual that is connected to it. Also, it will give a broader knowledge on how to improve the audit plan.
Every phase in the audit phase has its role. First is the selection phase; in this phase, the internal observe how the company's operation performance develops a project that will be executed. Next is planning; the internal auditor makes a plan regarding the information gathered. In this phase, the auditor will interview some of the clients to extract information. They will gather background information to support their hypothesis. The auditor will contact the client to identify the risks and determine the audit's objectives and scope.
The third phase is the execution phase, wherein the audit plan should perform to see if the findings are correct and if something is wrong. The auditor will overview if the things are working as intended. The employees must give a heads up to the auditor if they have encountered an issue. Then the internal auditor will conduct an operation to see if the issues that have been reported are accurate. They will also conduct a meeting to report to the clients the audit observation of the auditor and potential findings. Also, they might give some recommendations to the clients.
The next phase is reporting phase; audit findings, conclusions, and recommendations are summarized and reported to the higher-ups. Then the last phase is follow-up. This phase is when the internal auditor will oversee the audit findings within one year when the report was issued. It is to ensure that the audit plan is accurate.
To sum it up, the audit phase is vital to follow to see if the audit plan planned by the internal auditor is efficient and effective. It will give a report that is accurate and free of bias by providing the data and information that has not been tampered with. The audit phase will achieve a balanced and fair audit since it will undergo a series of phases monitored by individuals who have good integrity in doing their work.
Reference
The Audit Process. (n.d.). Bowling Green State University. Retrieved October 12, 2021, from https://www.bgsu.edu/internal-auditing/the-audit-process.html
The Audit Process. (2014, April 9). Internal Audit. https://internalaudit.ku.edu/project-process
ANTHONY C MANGILOG (2019-104415)
This comment has been removed by the author.
ReplyDeleteHave you imagined a human body where the head is attached in hands or a foot above your neck? How about cooking chicken curry without curry powder? That’s how the unsystematic practice of audit phases looks like. Any omission or failure to conform with the proper sequence of audit steps will have a chaotic result.
ReplyDeleteAs you notice, the word “systematic” has been affixed to the definition of operational auditing. Hernan Murdock identified 4 phases of the audit process in logical order namely: planning phase, fieldwork, reporting, and lastly, the follow-up phase. Before anything else, the Planning phase must come first since this will set as a guideline on how you will perform the entire audit work. This stage is very crucial in the engagement because a well-prepared plan conserves time and effort, mitigates possible mistakes, and increases the effectiveness and efficiency of the auditor. Skipping this phase will lead the auditor no direction and is likely to produce irrelevant results. It is followed by the fieldwork stage, where the examination, verification, and documentation of both the observable and imperceptible situation inside the firm is documented, enabling them to identify the root cause of the issue. Disregarding this process will ruin the due professional care attribute of an auditor required by the standard in producing an objective and quality report. Moving forward, the findings in the preceding stage must be communicated to the end-users and have a collaborative discussion of the corrective actions needed to address the identified problems. Ultimately, follow-up is the last phase at which the auditor will confirm if the corrective action has been applied and evaluate its effectiveness. You see, each step provides a substantial output that is further processed in the next step as its input. The procedures must be in the correct sequence to meet the desired outcome.
Following these logical audit phases will help auditors performed their responsibilities with accountability, certainty, and assurance that every aspect has been review and documented properly. In conclusion, the rationale I have presented above will support the premise that a systematic performance of audit phases helps achieve a balanced and fair audit result.
Reference:
Murdock, H. (2017). Operational auditing: Principles and techniques for a changing world. Taylor and Francis Group, LLC. pp. 36-61
-LOVELY V. BANGATE (2019-104176)
Thea Sofia A. Barabicho
ReplyDeleteCBET-01-502A
An operational audit looks after the processes, systems, and procedures of an organization. It dives deep into the internal control of the business and pinpoints the areas to improve, modify, and assess. In order for a company to have efficient and effective management and control, they must adopt operational auditing for them to obtain objectives and realistic information which will only be identified through undergoing this process. Even though adopting this audit process is expensive, it will surely help the company in the long-run. Establishing a strong foundation would be the key in maintaining standards that the organization has set.
Execution of the operational auditing is very vital because it will only show the best results only if it is carried out in the right manner. Like every other process, it must follow certain steps. Every step is a prerequisite of the next - it should be done excellently before the auditors can proceed.
There are four phases of operational auditing - Planning, Fieldwork, Reporting, and Follow-Up. A company must first plan the audits to be performed, perform risk assessment, and designate resources and timeline. Planning should take up most of the time spent in the whole phase because it is the most important. To achieve a balanced and fair audit, it is significant to plan everything carefully with detail in order for the organization to not waste their time and resources. Once the plan has been established, it should be carried out and tested. An auditor must exercise independence and objectivity in this phase as they will be hands-on in interviewing, documenting, applying methodologies, and providing status updates.
Once the information and data have been gathered, the next phase is to report it to the stakeholders. Obtaining information without it being communicated is nonsense. In line with this, an information obtained without a follow-up would be considered irresponsible. The main reason an organization has adopted operational auditing is to aid and improve the internal controls, thus, a corresponding action must take place.
An audit that is balanced and fair is easy to achieve if an organization will be consistent in following the steps. It is clearly obvious that the phases make sense as they are placed in order and it makes the whole auditing process a lot easier because it follows a certain process. Through this, effectivity and efficiency of a company can be easily attained.
Working on a big company that has different department operations that an auditor needs to work with can be messier sometimes. A company that has a good and effective approach in organizing their key activities will have a good flow of conducting their plans for the company. Like in traditional audit, the operational auditing also follows the structure of planning, fieldworking, and reporting phases. Since Operational auditing can be costly in terms of using time and money, following the proper phases of auditing will help the efficiency and effectiveness of utilization of the firm’s resources. Sometimes, these factors come after another or sometimes there is efficiency but there is no effectiveness or vice versa. These two factors must be present in all the activities to make sure that there will be no wastage of resources.
ReplyDeleteThe traditional phases of operational auditing are planning, fieldwork, and reporting. The planning phase involves the overall planning, the formulation of steps which one should be done first then the next one. Accordingly, the planning phase is one of the most important phases in auditing because this phase will be the basis and guide of all the performance of the company. It includes budgeting, scoping, pointing interests and testing. While the fieldwork phase is the application of what steps panned from the first phase. This phase is the actual performance or engagement of the life cycle planned and produces evidence of performance through observations and others. In this phase, the balance and fair audit is being done because the fieldwork produces the actual evidence and performance, not depending only on the theories, suggestions, and opinions. The third phase is the reporting where the communication of documents. The documents will provide the observation, testing, application, and results and findings of the fieldwork. This will also be important because it will be the basis in decision making of the users, especially the auditors on which guidelines and standards should be used.
Reference:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. pp 33-56.
ERICA C. BANDOLA (2019-105307)
October 23, 2021
This comment has been removed by the author.
ReplyDeleteInternal audits are carried out utilizing a five-phase approach that includes selection, planning, fieldwork, reporting, and the implementation of corrective action plans. Because we can be synchronized in the auditing aspect through those phases. It is critical to follow the five stages to guarantee that we are giving complete and succinct information that is appropriate for the company's needs; we must recognize that each phase has its own essence in order to be effective and efficient. The first of these five processes is selection, Internal audit interacts with leadership and management during the selection phase to look at risks and potential impediments to achieving goals. The next step is planning, which includes everything from defining the scope and goal to establishing audit processes to achieve the goal. Internal audit meets with management at the start of the audit to review the audit's purpose, risk factors, and other logistics. The third phase is fieldwork, in which auditors carry out the tasks indicated during the planning process. Interviews, studying laws, regulations, and best practices, confirming sample transactions, evaluating data sets, and conducting surveys are all common steps. The fourth phase is reporting, in which auditors convey these findings to management via an audit observation memo and request a response from management, including a corrective action plan and schedule for implementation. The final report includes these responses. The fifth and last phase is follow-up. To ensure that plans are implemented, all audit recommendations and management corrective action plans are followed up on. We may be able to obtain a balanced and fair audit if we follow the phases. Because these phases are critical for producing impactful reports. However, we must also consider auditors who desire to do good or bad. Because I know that everyone wants to be fair and accomplish something worthwhile, but when it comes to money, there are occasions when we choose money over ethics. But that does not mean we should tolerate them; as a potential successor, we should be the first to initiate a fair and balanced audit in order to provide transparency and assist the company in becoming a good company, and by doing so, we will be able to assist the company's administrators in becoming competitive.
ReplyDeleteOffice of Internal Audit. Audit Process. (n.d.). Retrieved October 2021, from https://internalaudit.uoregon.edu/report/audit-process.
Capinlac,Carl Angelo SJ ( 2019-102322)
An audit phases is a methodical procedure that should be viewed as a tool that assists auditors, providing benefits such as constant access to up-to-date and accurate information on how audit processes are working and functioning.
ReplyDeleteAudit phase starts with planning (sometimes called survey or preliminary review), fieldwork, audit report, and follow-up review. Generally, following systematical process encourages higher productivity and higher quality job outputs. In terms of auditing, following the audit phases results in an accurate in-depth evaluation of risk analysis, transparency, good corporate governance, verification of the controls in use and their appropriateness for the company, verification of audit processes and practices if adequate, and provide data for decision-making on process improvements and adjustments. Moreover, it obeys the objective of auditing which is to the ameliorate the production level, performance’s efficiency, cost efficiency, and effectiveness of an entity’s operation. Following audit phases allows the reduction of risk of wasting resources which results in diminution of costs and produces higher revenues as an impact.
Based on my observation, audit phases are systematic guidelines arranged to properly execute auditing procedures. These are essential elements to achieve a balanced and fair audit because it follows audit standards that best suits to the needs in the operation of the company. By following these audit phases, unbiased and reasonable audit reports will be implemented. Consistency, accuracy and verifiability in executing audit reports will also be implemented because auditing phases, which scrutinizes the standard in every phase, were followed during the audit process.
References:
Heflo. (2016 March 24). Business process audit: Benefits, definition and objectives. https://www.heflo.com/blog/governance/business-process-audit/.
Murdock, H. (2017). Operational Auditing Principles and Techniques for a Changing World. Taylor & Francis group.
Tuovila, A. (2020 November 11). Generally Accepted Auditing Standards (GAAS). https://www.investopedia.com/terms/g/gaas.asp
- Aloroy, Genelyn T. (2019-202971)
Audits, when done appropriately, can have a significant impact on a business’s success. Following audit phases is important because it serves as a procedure for how you will come up with an effective and precise audit. Hernan Murdock provides us with these four phases, namely: planning, fieldwork, reporting, and follow-up. These audit phases offer a simple, practical, and time-tested method for planning, carrying out, and conveying the results of work. It serves as guidance for the auditors to establish an overall audit strategy. It was designed so that auditors could follow a predetermined approach that would help them with the audit process' success. In most cases, audits are performed correctly. By correctly, I mean that they adhere to the proper procedure. Having a set audit process means standardizing operations. Following a defined, consistent audit procedure or phases will result in the following: Communicate audit expectations clearly, maintain a high level of audit quality, and by automating repetitive tasks, you may cut the time it takes to apply for an audit and boost productivity. It also mitigates risk and encourages staff to participate. And lastly, it simplifies training for auditors and employees who are new to the job. Adhering to a predetermined audit procedure prevents the auditor from making audit errors. Through these audit phases, you can be assured that the auditor can achieve a balanced and fair audit. That is why it is really vital to follow the proper audit phases.
ReplyDeleteReference
says:, J. O. J., & says:, J. K. (2020, February 20). Audit process: 5 expert steps for you to get your audit right: Process street: Checklist, Workflow and SOP software. Process Street. Retrieved October 11, 2021, from https://www.process.st/audit-process/.
Murdock, H. (2017). Operational Auditing Principles and Techniques for a Changing World. Taylor & Francis group.
- Catherine Buling (2019-103626)
Audit phases are the processes that auditors take across the scope of the audit in order to thoroughly prepare and conduct the audit process. The phases are as follows: planning, fieldwork, reporting, and follow-up. During planning, necessary background information is obtained to gain an understanding of the firm, audit objectives are created, and audit methodology is established through the development of an audit program. For the fieldwork, it involves analyzing the adequacy of internal controls and compliance, testing transactions, information, and resources, and carrying out additional processes necessary to achieve the audit's objectives. For reporting, a draft report will be prepared which will include the audit scope and objectives, findings, recommendations for improvement, and the audit client's replies and corrective action plans. Lastly, a follow-up will be conducted to assess whether corrective action plans were properly executed and expected results were obtained (The University of Texas at Austin, 2021).
ReplyDeleteTherefore, these phases assist in establishing a necessary pathway for the audit process, allowing auditors to have a predetermined trajectory that may help them execute the whole audit process effectively. It also assists auditors in gathering accurate data on which to base their decisions (Wiki Accounting, n.d.).
Yes. By following the audit phases, auditors can achieve a balanced and fair audit. It guides the auditor in correctly assessing the audit process. The auditor will be able to better understand what has to be done and how to perform the audit as a result of these phases. It will assist them in gathering the necessary information for the audit, setting objectives, developing an audit strategy, correctly executing the audit plan, and providing recommendations when the audit is completed.
References:
The University of Texas at Austin (2021). Audit Process. https://audit.utexas.edu/audit-process
Wiki Accounting (n.d.). Importance of Audit Procedures. Accessed October 4, 2021. https://www.wikiaccounting.com/importance-audit-procedures/
-Angelika D. Francia (2019-101440)
According to The University of Kansas, our audit process is divided into five stages: selection, planning, execution, reporting, and follow-up. In the selection phase, to establish an audit plan, a risk assessment is conducted. The auditors may be required to review key company documentation as well as past audit reports at this stage. Planning phase, background information is acquired that is relevant. The client's contact is established. The audit's objectives and scope, as well as fieldwork and report distribution dates, are all specified. During this step, an open meeting may be held to deliver the audit plan to relevant staff members. Execution phase, internal audit personnel conduct fieldwork. Interviews with relevant auditee workers could be part of the fieldwork. Status meetings are held on a regular basis. This ensures that the client is kept informed about the audit's progress. In the reporting phase, the results of the audit, as well as the conclusions and particular suggestions, are summarized. This summary is then sent to the client in the form of a report draft. And lastly the follow-up phase, the purpose of the following audit is to follow up on the findings of the prior audit.
ReplyDeleteAs we can see, audit clients have the chance to participate at each level of the audit process. Without a doubt, the process works best when client management and Internal Audit have a strong working partnership built on open and ongoing communication. With this, following audit phases are important because we can determine the possible alterations and improvements in operations (Chicago State University, n.d.). It can achieve a balanced and fair audit, because as we can see, there are stages that it follows and there are some clients and auditors working together to make it feasible and reliable.
References:
The University of Kansas. (n.d.). The Audit Process. https://internalaudit.ku.edu/project-process
Chicago State University. (n.d.). Audit Process. https://www.csu.edu/internalaudit/auditprocess.htm
Courtnell, J. (2020, February 12). Audit Process: 5 Expert Steps for You to Get Your Audit Right. https://www.process.st/audit-process/
-Jennalyn P. Batjer (2019-101439)
An operational audit evaluates an organization's activities, systems, frameworks and procedures. While it may appear trivial, this type of audit digs deep into the management procedures to uncover all of the flaws in the current system, providing it with a comprehensive analysis of the issues at hand (Qvalon, 2021). An operational audit is beyond more complex than basic auditing as it focuses on improving the flow and behavior of the business cycle. Operational auditing is best obtained by implementing a procedure or series of stages that is typically carried out by an external auditor. Individual departments or a specific project are analyzed as part of the process. Each phase of the operational auditing highly contributes to the overall success of the business. It is very instrumental to follow the auditing phases as it will aid the business to effectively pinpoint the flaws and errors of the operations, maximize the efficiency and productivity, and develop business opportunities. Businesses are more probable to achieve a balanced and fair audit if they regularly follow the audit phases - selecting, planning, executing, reporting, and follow-up. First, the company must establish its objectives and goals. The company should express its issues and challenges, as well as its existing performance. Transparency may aid in the development of a complete audit strategy by the auditor. Then the auditor will outline how the auditing procedure works. The auditor's task is to sift through the facts and look for any potential red flags. Risks will be listed alongside objectives and actions, and the management should assess them for accuracy. After that, the auditor would monitor and review the phases if the tasks are being carried out at an efficient and proper manner as planned. As a result, you will be contributing in the design of advanced rules that will aid in the acceleration of your company's growth.
ReplyDeletePATRICIA DENISE P. LEYCO (2019-101438)
References:
Qvalon. (2021). Operational Audit Overview: Definition, Process, and Purposes. https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
Before we discuss the importance of following the audit phases, we must first identify what they are and how they operate. According to Grabillo (2021), there are 5 phases of operational audit namely Selection, Planning, Execution, Reporting, and Follow-Up. As an auditor, we must first conduct a risk assessment near the of a calendar year. In this phase, we develop an audit plan based on the results of the said assessment. Next, we gather relevant background information and we communicate with the client. Next, auditors are constantly informing the clients on the process through regular meetings and such. Next, a summary of the findings, conclusions, and recommendations are officially communicated to the client through a draft report. In the draft report, the clients can respond and give a timeframe on what actions they will do in order for them to go about with the plan. And lastly, the internal audit follows up on the report within one year. Going back to the question “What is the importance of following audit phases? Can it achieve a balanced and fair audit?”. The importance of following the audit phases is quite simple. It makes the auditors job easy and concise. Through repetition, the auditors will know what risk are present and what type of plan they should make. Seeing it on repeat will help them recognize it much faster. By following the phases, I believe that it can and it will achieve a balanced and fair audit because the auditors are informing the clients consistently and they are also trying to assess the risk without outside interference after the audit has been made.
ReplyDeleteSources:
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Hans Theo Ezequiel N. Valenzuela 2020-110421
Internal Audit is a department or an organization of people within a company that is tasked with providing unbiased, independent reviews of systems, business organizations, and processes
ReplyDelete(Clarke, 2018). Thus, as an internal auditor, it is their duty to provide essential information pertaining to the control environment, risks, objectives, operational effectiveness and compliance with existing laws and regulations of the organization. Moreover, they also observe how certain strategies and policies are being implemented inside the company.
To serve the purpose of an internal auditor, they are required to follow the four audit phases. It begins with planning, fieldwork, reporting and ends with follow-up. Throughout the planning process, the team of internal audit will start to discuss the scope and objectives of the audit, generate an audit plan to be executed, create a timeline and budget for the audit, consider the guidance relevant to the audit and analyze the outcome of prior audits. The next phase is fieldwork. In this phase, the audit team will undertake the content of their audit plan. Usually, they interview key personnel to confirm an understanding of the process and controls. They also test the controls for a sample over a period and document the work performed. After fieldwork, the next phase is reporting. It consists of communicating findings, observations, and best practices noted during the review, and developing recommendations for corrective action (Murdock, 2017). Findings in the report shall include recommendations that if properly executed by the organization, leads to the overall improvement of the business operations. The last audit phase is follow up. It ensures that there is a proper implementation of all audit recommendations and the management is doing their job to also implement corrective action plans.
Since we already have an idea about the audit phases and the activities included in each phase, we must decipher the importance of following an audit phase and how it helps to attain a balanced and fair audit. The existence of a set audit phase or process means to standardize operations. Conducting an audit process in sequence will give assurance to both auditor and clients that such audits will be done on time accurately and precisely. But most importantly, following a set audit phase will lessen the possibility of any audit errors and it will produce advantageous effects such as: Effectively communicate audit expectations; Maintain consistent audit quality; Identify what went wrong if something goes wrong; Automate repetitive tasks, reducing the time required for audit application, and increasing efficiency; Mitigate risk; Simplify training for trainee auditors and employees; And retain audit process knowledge. In addition, every phase in auditing produces a vital output that will contribute to the reduction of risk, better performance of the organization, and assess the feasibility of creating more modifications in the operations, policies and procedures of the organization.
REFERENCES:
Clarke, I. (2018, November 28). What is an Internal Audit? Answers to Common Questions. Retrieved from https://linfordco.com/blog/what-is-internal-audit/.
Courtnell, J. (2020, February 12). Audit Process: 5 Expert Steps for You to Get Your Audit Right. Retrieved from https://www.process.st/audit-process/?amp.
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. pp 54.
STEPHANIE BALAYSOCHE (2019-101856)
This comment has been removed by the author.
ReplyDeleteOperational auditing needs to be a structured process for this to work accurately. It needs to be monitored if its function works effectively and efficiently in the organization. To achieve this, the phases of operational audit are established, in which this is composed of: (1) selection; (2) planning; (3) Execution; (4) reporting; and (5) follow-up.
ReplyDeleteEach phase mentioned above is very crucial which means it must be assessed with prudence. It is important to follow audit phases for the reason that if one of the phases was not included or not followed in order, there's a high chance of future problems and information will not be as reliable as it should be. For an instance, if you skipped the planning phase and continue with the execution, it may cause chaos once risks happened and there's not back up plan of what should be done if it things does not work out. Another one is when you execution comes first before planning, doing this may be time consuming and it might cost a huge casualty to the organization. Following the step by step phases gives the opportunity to provide a reliable and timely information that can affect the decision making of the users.
With this being said, following audit phases indeed achieved a balanced and fair audit. It's also an indication that information is not biased and in compliance with the requirements for the audit. With this, it can addressed what should they need to focus on more to improve and what need to maintain in the long run.
References:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. pp 33.
Accountants Go Cardless (n.d.). What is an operational audit? Accessed September 30, 2021. https://gocardless.com/en-us/guides/posts/what-is-an-operational-audit/
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Operational auditing needs to be a structured process for this to work accurately. It needs to be monitored if its function works effectively and efficiently in the organization. To achieve this, the phases of operational audit are established, in which this is composed of: (1) selection; (2) planning; (3) Execution; (4) reporting; and (5) follow-up.
ReplyDeleteEach phase mentioned above is very crucial which means it must be assessed with prudence. It is important to follow audit phases for the reason that if one of the phases was not included or not followed in order, there's a high chance of future problems and information will not be as reliable as it should be. For an instance, if you skipped the planning phase and continue with the execution, it may cause chaos once risks happened and there's not back up plan of what should be done if it things does not work out. Another one is when you execution comes first before planning, doing this may be time consuming and it might cost a huge casualty to the organization. Following the step by step phases gives the opportunity to provide a reliable and timely information that can affect the decision making of the users.
With this being said, following audit phases indeed achieved a balanced and fair audit. It's also an indication that information is not biased and in compliance with the requirements for the audit. With this, it can addressed what should they need to focus on more to improve and what need to maintain in the long run.
References:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. pp 33.
Accountants Go Cardless (n.d.). What is an operational audit? Accessed September 30, 2021. https://gocardless.com/en-us/guides/posts/what-is-an-operational-audit/
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
LOPEZ, FRITZ REIZEN V. (2019-103689)
This comment has been removed by the author.
ReplyDeleteFirst of all, I want to begin with what the audit phases are. There are five audit phases or processes according to Grabillo (2021) stated in his blog which are: Selection, Planning, Execution, Reporting, and Follow-Up.
ReplyDeleteWith that being said, I firmly believe that it is important to follow the audit phases or processes in order to come up with a well-thought-out and sound audit report because each phase is pivotal and we can not simply jump on subsequent phases without doing or accomplishing the first one. We can not achieve an accurate report without having a selection and or planning at the very beginning because it will be just a mere outcome or report and the absence of careful process of brainstorming and assessment will be very risky or perhaps very dangerous at all for the company. As well as there will be nothing to execute if the prior is missing. To simply put, an auditor will not be able to produce a good report at all because there is no scope of topics, findings, conclusions, and other relevant studies to present and begin with. The lack of these aforementioned are those that are significant and like a backbone or foundation when it comes to making operational audit reports. Everything must be taken one unhurried step at a time.
In my opinion, adhering in a systematic way or approach will achieve a balanced and fair audit report. Phases from the start-up to the end, each of those when done accordingly will result in an excellent audit report. An audit report accomplished with careful selection and thorough planning within an organization will promote equality and balance since everyone is affiliated in decision-making and sharing opinions and ideas in enhancing the company policy and the sort. Everything that has been decided will then be put to execution and the outcome will be reported and disclosed to appropriate individuals and lastly is to follow-up. Everyone may come up with a report or study but not everyone can do it exceptionally and fair and square hence, the significance of fulfilling every audit phase.
Reference List:
Grabillo, M. A. (2021). Operational Audit: What are its Phases? Blogspot. https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
AIRON NICOLE T. JADRAQUE (2019-101826)
Just like in any other things, nothing comes with just a single snap. There must be a process in everything. In auditing, there are also process which prefers to its phases. Although every audit process is unique, the audit process is similar for most engagements and normally consists of five stages and these are the Selection, Planning, Execution, Reporting, and Follow-Up. Each phases plays a vital role in auditing, they are all important and essential in performing audit. Since selection phase is the first step in the phases, it meets with leadership and management during the development of the annual audit plan to discusses risks and potential impediments to meeting objectives. Then, planning phase is conducted to start from defining the scope of the audit and to develop audit steps to meet its objective. Execution phase or also called as fieldwork is also important because it is where you conduct the steps identified in the planning process, this includes the conducting of interviews as well as surveys and analyzing data sets. Then, reporting phase where discusses the conclusion which includes the results of the audit, the findings, recommendations and other observations that comes from the results of the previous phase. Lastly, the follow-up phase, in this phase the audit recommendations and management corrective action plans are followed up on to provide assurance that plans are implemented.
ReplyDeleteI firmly believe that auditing phases can help to achieve a balanced and fair audit because of the fact that each phases will serve as its guide in performing audit and through following all the necessary actions that must be performed, also given that each phases will undergo in a discussion with the internal auditors management which one of the key objectives is to minimize the time and avoid disrupting ongoing activities. The best decision and results will be obtained and this will make the audit balanced and fair, company’s goals and objectives will also be achieved.
References:
Audit Process | Internal Audit | Chicago State University. (n.d.). Retrieved October 13, 2021, from https://www.csu.edu/internalaudit/auditprocess.htm#:%7E:text=Although%20every%20audit%20process%20is,stage%20of%20the%20audit%20process
Grabillo, M. A. (2021). Operational Audit: What are its Phases?
https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Office of Internal Audit. (n.d.). The Audit Process. Retrieved October 12, 2021, from https://internalaudit.uoregon.edu/report/audit-process
RAMOS, CRISHIA ELLAINE P. (2019-105763)
Operational audit phases are important when performing audit process because it allows the internal auditors to perform their task systematically. Following the audit phases enable internal auditors to carefully plan and execute the audit procedures and get feedback from the management if the corrective evaluation was performed for achieving the organization's objectives. Operational audit phases consist of planning, fieldwork, reporting, and follow-up. The planning phase involves assessment of risk, designation of resources and timeline, collection of relevant data that will serve as the basis for determination of the scope, and preparation of audit plan. This phase is the starting point where internal auditors organized the audit process. Fieldwork is the action to be done related to the testing of the existing process or program of the organization or collection of pieces of evidence through interviews, documentation, observation, and recalculation of the activities. This phase allows the internal auditors to verify if the business activities are related to achieving the objectives and goals with the use of evidences. Reporting is the communication phase where internal auditors deliver the results, observations, and recommendations to the clients. This phase allows internal auditors to communicate the audit to the users of information. Follow-up is the process where internal auditors review if the corrective action is being followed by the management. It allows the internal auditors to get feedback from managements’ performance on how did they address the problems in the organization. Every phase is essential as they provide necessary information that can be used by internal auditors to emphasize if the performance is accurate to audit objectives. With these phases, internal auditors can provide balanced and fair audit results if these are performed independently, with no bias and influence from the third party. They cannot provide the best assurance but at least they can give reasonable assurance that can be used by management in addressing the risk and problems related to the objectives of the organization.
ReplyDeleteREFERENCES:
Auditing: Objectives & phases of operational audits ... (n.d.). Retrieved October 12, 2021, from https://www.youtube.com/watch?v=7aUabD77FvI.
CPA, W., October 02, 2021, Apps, S. G. linkF. T. P. E. O., September 11, 2014, comment, 1, more, R., April 28, 2013, comments, 66, & December 14, 2011. (n.d.). Operational audit: What are its phases? OPERATIONAL AUDIT: WHAT ARE ITS PHASES? Retrieved October 12, 2021, from https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html.
RILLERA, MYRA DIANNE G. (2019-107121)
The audit process is consists of five phases, namely, Selection, Planning, Execution, Reporting, and Follow-Up. Selection Phase, audit activities are selected using a risk-based approach. Through the development of the annual audit plan, the internal audit department meets with management and management to discuss the risks and potential obstacles to achieving the objectives. The project is consolidated by the Executive and Audit Committee of the Board of Trustees. The audits can also be managed based on concerns reported through the Fraud and Ethics Hotline. Planning Phase, the internal audit team collects relevant background information and contacts the client. Auditors meet with university administration and clients to identify risks and determine the objectives and scope of the audit and the timing of fieldwork and report distribution. Execution Phase, as soon as the audit is planned, the employees of the internal audit department carry out the fieldwork. Clients are informed about the audit process through periodic status meetings. We discuss audit observations, potential findings, and recommendations with the client as soon as they are identified. Reporting Phase, the summary of the audit findings, conclusions, and specific recommendations is officially sent to the client in a preliminary report. Clients have the option of responding to the information and providing an action plan and timetable. These acknowledgements become part of the final report that is distributed to the corresponding administrative level. Follow-Up, the internal audit department follows up on all audit results within one year of the report being prepared. Following the five stages of the audit process is essential, as it helps avoid mistakes that can be costly and devastating.
ReplyDeleteJohn Curran, The University of Kansas, Internal Audit https://internalaudit.ku.edu/project-process
GUAMOS, PATRICIA LYNN D. 2019-103828
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
ReplyDeleteFor an entity to achieve its goals it must follow the audit phases. To illustrate how important it is, I will be using the life cycle of a butterfly as an example. As we all know, caterpillars need to undergo phases of life to become a beautiful butterflies– from being an egg; they will transform into larvae; to pupa; and lastly to a full-grown butterfly. They cannot skip to the next phase without undergoing the first stages because it is impossible. The same goes with the auditing phases wherein auditors should undergo the planning phase, execution phase, reporting phase, and follow-up phase respectively. They cannot jump into the next step without executing the previous ones because if they did, some issues might not be recognized and addressed.
It is necessary for an auditor to follow the phases of the audit to be on track and to prevent performing unnecessary transactions. To explain further, the first phase is Audit Planning, this is where the preparation of the plans happens which is usually done ahead of time for the auditors to be ready for possible outcomes. Next is the Audit Execution phase or the Fieldwork as other authors implied. This is where the gathering of information is executed; meeting with the parties involved; understanding the requirements; and verification of processes. The next phase is the Audit report where the communication arises. The audited report is then passed to the party who is requesting it. Lastly, the Audit Follow-up phase, in which proper closure between the client and the auditor takes place. The audit will only be marked as complete, once the client has agreed that such audit is completed (Bhasin, 2020).
Furthermore, aside from following the phases, auditors must also be aware of the entity's objectives to fully understand the goals and provide efficient actions to achieve them (Murdock, 2017). Hence, doing such procedures will certainly result in a balanced and fair audit because it allows communication between the auditors, the members, other significant teams, and the auditee.
References:
Bhasin, H. (2020). What is Auditing? Four Phases Of The Audit Cycle. Accessed October 5, 2021. https://www.marketing91.com/what-is-auditing-definition/
Grabillo, M. A. (2021). Operational Audit: What are its Phases? Accessed October 5, 2021. https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html?m=1
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. pp 34.
GRIARTE, LOVELY ROSE B. (2019-105060)
Following the audit stages will ensure that a company achieves the best result in the future. That is why it is important to keep track of the audit phases. It is important that you can stay informed at each stage of the audit. These stages of the audit work best when you work together on the basis of clear and on-going communication. We will help ensure that the audit will lead to a better end product or let me say a better result. Following the phases of audit will help ensure that the audit plan covers controllable areas and business risks. Through these phases, an analysis of various factors of risks must be carried out in a fine analysis financial, health, safety, reputation and more, among other factors. All audit findings after these phases are noted in entity's or organization’s recommendation report and their management's action plan. One of its importance’s is that the audit phases guarantee the accuracy of the final result. I believe that following these phases can achieve a fair and balanced audit. Because while following the phases, the auditor can determine and carry out audit procedures that have assessed the risk of material misstatement for each relevant statement of each invoice and material disclosure in a very clear and fair manner. By undergoing the phases and it is done by professionals, the audit will be defined as an efficient process of tasks that is very match in the flow of time and the best result of the audit is that the audit is truly fair and balance.
ReplyDeleteREFERENCES:
Zimba, Anthony A. (n,d) Audit Process and Phases. Retrieved October 13, 2021 (3:25pm) from, https://www.arcadia.edu/university/offices-facilities/finance-administrative-services/office-internal-audit/audit-process
-BERNADETH B. DUGAY (2019-103892)
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
ReplyDeleteOperations auditing is defined as “A future-oriented, systematic, and independent evaluation of organizational activities (Murdock, 2017). One of its definitions is being systematic which means that there are procedures or steps in auditing that should be followed.
It is really important to go through these four audit phases. Planning is the very first step, if you fail to plan then you don’t have a path or directions to guide you. An operations auditor should make an audit plan, identify what audits to perform, prepare and assess some risks that may arise. Because operations auditing is also risk-based, they will identify and understand the possible risks that they may encounter and immediately make a solution to them. Next is the fieldwork, this phase is when the testing or the implementation of what is on the audit plan is performed. it includes interviewing, documenting, applying testing methodologies, managing fieldwork, and providing status updates (Murdock, 2017). It focuses on two things which are: first, determining if the process is effective to achieve the company’s objectives and verifying if the controls in place are performing according to the management’s designation. Operations auditing is an activity that provides to the firm by doing their most effective and efficient way to attain the objectives of the company. This phase is significant because operations auditors can gather supporting evidence that they may use to see if everything is still aligned on what they have planes. When there is already a result, the team communicates about the finding or which they call the reporting phase. In this stage, they are discussing their observations, the cause and effects of the audit findings, its conditions, and some recommendations that the auditors can give to make it more effective for the company’s operations. And lastly, in the follow-up phase, in this phase the operations auditors are observing and evaluating if the actions they have made are still aligned to their timetable, and if they are still effective and efficient to do.
After all the phases, it can definitely achieve a balanced and fair audit because operations auditors examine and evaluate well each action and operation of the company. There is a deliberation of results in phase three that can help them because of their recommendations. And as they still observe and follow up until the end, it will be easier for them to achieve the goals of the company especially in terms of their operations.
References:
Murdock, H. (2017). Operational Auditing: The Principles Techniques for a Changing World (1st ed.). Auerbach Publications. https://doi.org/10.1201/9781315368733
Teacher Jeannie. (2021, September 11). Auditing: Objectives & phases of operational audits 09112011 by MJBC. [Video]. YouTube. https://www.youtube.com/watch?v=7aUabD77FvI
CARANDANG, CELINE D. (2019-104928)
This comment has been removed by the author.
ReplyDeleteIn the field of Operational Auditing, the audit phases play a critical role in organization wherein it aids to grasp what are the plans and process that is essential for the progress and become relevant to the organizational behaviour. Audit procedures are consequential steps that are accomplished by the auditors athwart the confines of the audit in order to carefully plan and execute the audit process. In addition, they can be bounded as the processes, techniques, and methods that are habituated sequence for auditors to procure the necessary evidence which empowers them to make conclusions that is fair and factual which based on the respective audit objectives so that they can be able to express their opinion in a proper manner.
ReplyDeleteBesides, it is basically the procedure that is fulfilled in order to assess and ascertain the degree of unusual transactions or events that are required in the basic audit process for a better understanding. To be specific, Selection phase signifies the risk assessment approach that tends to the development of the annual audit plan and to discuss risks and potential impediments in order to meet the objectives. In planning phase discussed the vital aspects to nascence in defining the scope and objective in order to conduct and reinforce audit step to gather the informative details that is documented in a planning and scoping memo.
In the same manner, execution phase this is where the Auditing staff need to hands on the field of work in order to observe, distinguish, assess of what aspects need to pitched in orderly to attain better findings and recommendations. For instance, reporting phase is essential because this is where the conclusions happens with regards to the fieldwork process that tends to have a summary of the audit findings so that it can provide corrective action plan and time that is align to the response of the clients . After this. It is must to have a follow- up in sequence to accurately provide an assurance plan.
Hence, Overall audit process is significant because of the reason that its directly impacts the underlying ability of the auditor to determine the nature of the transaction, and the manner in which they are supposed to go around it when conducting the audit itself. Hence, audit procedures are mainly designed in order to specify the task that was conducted, as well as the underlying reason behind which it was important to set this as an audit procedure.
It is essential to follow a certain standard or procedure, also called a process, to assure efficiency and accuracy. The phases of the Operational Audit are a "simple, effective, and time-tested approach," which aims to establish, implement, and deliver the results (Murdock, 2017). Furthermore, it serves as the guideline for conducting an audit that guarantees its proper execution.
ReplyDeleteFollowing the phases of conducting an audit will allow the operational auditor to develop and present a feasible strategy to evaluate the state and the risk circulating the business. It will also enable them to produce valuable, innovative, and alternative solutions to a problem, thus assuring efficiency and the best attainable performance. Additionally, it will allow for the smooth execution of work as it follows a specific direction, which will maximize the outcome while minimizing the use of resources and time. Furthermore, it is beneficial for the shareholders as it will assure them that the audit has undergone a thorough process that will appraise the value of the findings, hence, taking corrective action on reported observations.
Following these phases is vital not only for the auditor and shareholders but also for the audit itself. It helps achieve a balanced and fair audit as it underwent a series of careful and accurate methods. The audit phases include selection, planning, execution, reporting, and follow-up (Grabillo, 2021). In the selection phase, the auditor selects and examines data from the current year that is beneficial for the subsequent year, ensuring consistency. In the planning phase, the auditor chooses the best strategy to conduct the audit that will assess the risks and resources to be used, assuring the efficient and effective performance of the audit. In the execution phase, the auditor conducts the audit. He also communicates the potential findings and recommendations, which enables the transparency of the report. In the reporting phase, the auditor relays the result, including conclusions, observations, and suggestions for corrective action. It allows for the involvement of the management, as they will ensure the accuracy of the report and the usefulness of the action plans. And in the follow-up phase, the auditor assesses efforts taken by management on reported observations and recommendations as to whether the implementation of the corrective action is effective. This audit phase allows for accurate and efficient data, which helps achieve a balanced and fair audit, thus, resulting in helpful information to address risks and problems surrounding the business.
References
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Murdock, H. (2017). Operational auditing: Principles and Techniques for a Changing World.
DIZON, JAKE C. (2019-106975)
According to Murdock (2017), there are four significant phases of operational or internal auditing namely planning, fieldwork, reporting, and follow up. To elaborate, planning phase is the process of obtaining substantial information about the business including understanding the normal operation of the business for the auditor to assess the key operation that they could apply in achieving the objectives of the business. Thus, planning should be executed with due care so that the other phase will follow. Secondly, the fieldwork or the phase to execute the information that was set up on the planning phase. This phase is where testing of the planned policies, systems, or programs occurred from the planning phase which includes interviewing, documenting, applying, and managing such planned systems. The next phase would be the reporting phase wherein it tackles the summary of what happened on the plan that was executed in the fieldwork phase. And lastly, the follow up phase whereby auditor verify and attest if such system was able to resolve or mitigate the assessed risk. Furthermore, these phases of operational auditing are very vital because this will help auditors especially starting auditors to have a concrete process in assessing risks and mitigating such risk in obtaining the success of the operational auditing in an organization. In addition, it’s really important to impart the balance and fair auditing principles to provide accurate and factual information about the organization. Being fair and unbiased will definitely help the auditing team to be more reliable in terms of assessing the operation of the organization. Thus, there is also a need for auditors to be transparent on everything that they provide in their audits to assess it more effectively.
ReplyDeleteMurdock, H. (2017). Operational Auditing. Florida: CRC Press.
The goal of operational audit is to optimize efficiency. By doing operational audit and examining organizations policies and procedures troubled spot would be identified as well as the risk a certain process is exposed to. Organization could reduce operational cost and evaluate the reason behind delays, waste, poor customer service, and excessive turnover time of processes. Through operational audit management could make changes and take corrective actions to ensure that the organization will operate effectively and efficiency. However, operation audit isn’t done with just a snap of a finger. It requires time and money and has a process to follow that would ensure that the result is balance and fair. Operation audit have different phases, but commonly it’s involve planning, execution, reporting and follow-up. First the planning, it is about setting the goal and target of the team. They discuss the scope and objective of the audit with the management and gather the information needed to plan for the remaining steps. Also, they identify the risk and asses which is to prioritize. Second is execution, with execution or fieldwork most of the testing is performed; they evaluate the risks and make an outline of recommendations on how to address them. Third is reporting, auditors communicates the result and this includes the summary of their findings, conclusion, reasonable recommendation, and corrective action that the management could take. Last is follow up, the job of the auditors does not end with the submission of their report. They should do follow ups to check if the management take their recommendation and if it was really effective. Following these phases is important as the audit is best performed when the proper steps is carried out.
ReplyDeleteReferences:
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Auditing: Objectives & phases of Operational Audit [Video file]. Retrieved October 7,2021, from https://youtu.be/7aUabD77FvI
BUCAL, RINA P. (2019-102462)
Phases of operational auditing provides simple, effective, and time-tested approach to organizing, performing and communicating the results of the work done. It is a step-by-step process for the operational auditors to help the management of the company to operate successfully and achieve organizational goals. This includes planning, fieldwork, reporting, and follow-up.
ReplyDeletePlanning is the most important part of auditing because it involves scoping, budgeting, defining the interested population, how investigations will be performed, and announcing the audit (Murdock, 2017). During this portion, the auditor notifies the client of the audit, discusses the scope and objectives of the examination in a formal meeting with the management, collect information on important processes, evaluate existing controls and plans the remaining audit steps.
Fieldwork is the next engagement's life cycle. Testing is performed on which it concentrates on transactions and informal communications such documenting and providing status updates. The auditor determines whether the controls identified and verified during the preliminary review are operating effectively so that the related goals and objectives are likely to be achieved and in the manner described by the client. This phase concludes with a list of significant findings from which the auditor will prepare a final draft of the audit report.
Reporting is the final report in which we document our audit observations, solutions and developing recommendations for improvements and corrective actions. It is about the communication of the results and best practices noted during the review. This also includes company's management’s response and implementation plan, the time frame for completion and responsible individuals. To facilitate communication and ensure that the recommendations presented in the final report are practical, Internal Audit discusses the rough draft with the client prior to issuing the final report.
Lastly, the fourth and last phase of auditing is Follow up. After findings are reported, it is incumbent on both management and auditors to verify that the corrective actions are in fact applied and the problems fixed as expected. The client response documentation is reviewed and the actions taken to resolve the audit report findings may be tested to ensure that the desired results were achieved. All unresolved findings will be discussed in the follow-up report which will include a brief description of the findings, the original audit recommendation, the client response and the current condition.
In conclusion, Audit phases helps auditors to achieve just and fair auditing which can also help them make decisions for the betterment of the company's management. During planning, auditors seek to understand and learn about the organization so that they evaluate the processes and controls currently in place. Fieldwork consists of specific testing scenarios or steps to identify areas for improvement. Communication of the results takes place through a transparent reporting process and finally, follow-up, to reassess the progress made against the agreed upon management action plans. These processes achieved balance audit because it undergoes study and analysis which assess the management vulnerability to make a plan in reducing risks in an organization.
References:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press
Auditing Process (2021). The Internal Audit Process from Beginning to End. Accessed October 13, 2021 https://www.csu.edu/internalaudit/auditprocess.htm
The Office of Internal Audit. (n.d.). Audit Process. University of Oregon. Accessed October 13, 2021 https://internalaudit.uoregon.edu/report/audit-process
Dela Cruz, Joyce Ann N. (2019-105673)
An operational audit is a review of how a company does business with the goal of identifying ways to improve efficiency and effectiveness. This is the process of assessing a company's operational activities on a daily basis as well as on a larger scale. In connection to this, it is critical to guarantee that auditors are capable of doing their duties responsibly so that readers of financial statements may trust the audit statements that these auditors present.
ReplyDeleteAuditors are expected to create their audit procedures in order to attain the necessary level of accuracy when executing the audit. Audit procedures are steps taken by auditors throughout the audit scope in order to meticulously prepare and perform the audit process. This should represent professional skepticism and provide a timeline for the major signs that must be addressed during the audit.
It can be defined as the processes, techniques, and methods used by auditors to obtain the necessary evidence that allows them to make conclusions based on the respective audit objectives so that they can express their opinion in a proper manner that directly affects the auditor's underlying ability to determine the nature of the transaction and how they are supposed to go around it when conducting the audit.
Audit procedures assist in justifying what the auditor conducts throughout the audit domain so that supervisors understand the reason and logic for the audit being conducted in this regard, as well as defining a procedural flow by which the total audit will be carried out.
The audit is seen as a critical stage in the development of much-needed market trust. It aids in establishing that the company's financial statements contain no major misstatements and that the company is free and fair from all sorts of fraud.
Reference:
WIKI ACCOUNTING. Importance of Audit Procedure. Retrieved October 13, 2021, from https://www.wikiaccounting.com/importance-audit-procedures/
- COLINE B. BERTIZ (2019-100749)
The importance of following the audit phase is that it serves as guidelines on how are the procedures will take place. Following audit phases will maximize the efficiency of understanding future policies and procedures that can boost effectiveness. It will result to understand the risk as well as potential problems. By examining each phase of operational phases, operational auditor will have a deeper understanding in the organization and his findings and recommendation will have big impact and help.
ReplyDeleteIn the selection phase, you will have the chance to conduct risk assessment annually, that will help the organization to develop an audit plan. In the planning phase, auditor gather relevant information and initiate contact with the clients. In that way, we will identify the risk, objective and the scope. In gathering relevant information, auditors use audit evidence to help them achieve a balance and fair auditing. The third phase is execution phase, in this phase you are executing the plan that you made. This will also discuss the auditing observation, potential findings and recommendations. The fourth phase is reporting phase, the importance of this is the client will have the summary of the auditing findings, conclusion and specific recommendation. Also, the clients will have the opportunity to respond and submit an action plan and time frame. The final phase is the follow up phase which the operational auditor follows up on all audit findings within one year, in that way the auditor will have the time to improve the plan.
It is very helpful to follow audit phases because this will make our life easier by just following these steps, also it is a systematical process of auditing. It is a cycle of phases as an auditor, this will help us to identify risk and potential growth areas. Also improves business efficiency, maximize productivity.
Reference:
Wandering CPA, 2021. OPERATIONAL AUDIT: WHAT ARE ITS PHASES?. [online] Markgrabillo.blogspot.com. Available at:
Grabillo M. A (2021). . OPERATIONAL AUDIT: WHAT ARE ITS PHASES?. [online] Markgrabillo.blogspot.com. Available at:
-Villanueva, Don Luis M. (2019-102313)
Hi Jerick E. Guasin. I like your work, it is very informative and you follow the proper way to cite information. It is well constructed and easy to understand. I hope to see more of your works.
ReplyDelete- Villanueva, Don Luis M. (2019-102313)
Hi Erica C. Bandola. I like how you started your discussion with a situation or examples that eventually explain the auditing phases and its importance. Your work is well constructed and informative. Great job Erica.
- Villanueva, Don Luis M. (2019-102313)
Hi Hans Theo Ezequiel N. Valenzuela. I like how you first define the auditing phases and properly cited them. You answer the questions at the end and it is straight to the point and very well said. Overall you did great and your work is informative.
- Villanueva, Don Luis M. (2019-102313)
ReplyDeleteOperational audit investigates thoroughly the management practices to determine all the inadequacy in the processes, systems, and procedures of an organization (Murdock, 2017). To investigate the facts it is important to have a period on when, where, why, and how to carry out the works need to be done. Following the phases of the operational audit gives assistance to the auditor to fulfill his duty as he can refer to these phases to know what to do next. It is crucial while conducting an audit, since conforming to the audit phases allows the auditor to perform the work effectively and efficiently. He can plan the whole audit process, test the process or program under review, gather the evidence to support his work, communicate the findings, and confirm if the corrective action was performed in the given timeline by the guidance of the audit phases. Another importance is that the auditor has the idea on what are the things must be done first before performing the next process. By following the audit phases, fair audit can be achieved as the auditor do the work in a step by step manner considering the important factors in conducting an audit. And it also gives confidence to the auditor that his work was done properly and that he can communicate the findings to the one being audited and assure them that it is observed and completed conforming to the facts.
Reference:
Murdock, H. (2016). Operational Auditing: Principles and Techniques for a Changing World (Internal Audit and IT Audit) (1st ed.). Auerbach Publications.
MAÑALAC, ERICKA
2015-100842
We perform operational auditing to ensure the growth and potential improvements of the firm in every aspect that we can assess. An effective operational auditing has brought many firms into a better position in the corporate world. The company can identify risk spots and can operate more effectively through auditing its policies, processes and procedures. There are five auditing phases that were introduced by the University of Kansas which is called the professional auditing process. An operational auditor must abide the process without neglecting the supposedly next phase. This auditing process includes Selection, Planning, Execution, Reporting and Follow-up phase. Each of the phases plays a different yet important part in auditing things. A firm really needs to consider to follow the phases accordingly because the essence of the process takes place here. In selection phase, we need to do a risk assessment which may require the auditors to look through the business documents and audit results. Next is the Planning phase, the auditor needs to interact with the people in all departments. The auditor takes time to meet with the clients and staff members to discuss identifiable risks. The third step is the Execution phase, once the audit plan is done, it its executed by the internal auditor staff. The clients are kept updated of the process through meetings which discuss audit observations, potential findings, and recommendations. Next is the reporting phase which contains the brief discussion of audit finding, conclusions, and recommendations. Lastly, the follow-up phase, which follows up on all audit planning within one year of when the report was issued. This professional auditing process assures a great chance of maintaining the firm’s long and short-term objectives. It offers a more certain and effective insights leading to better progress like the increase in sales, more efficient processes and better flow of operating activities. Fair and balance audit can be achieved since the auditing process does not let anything slide and looks realistically on everything inside the firm.
ReplyDeleteReferences:
The audit process. (2014, April 9). In Internal audit. Retrieved October 6, 2021, from https://internalaudit.ku.edu/project-process
Grabillo, M. A. (2021). Operational Audit: What are its Phases? Retrieved October 6, 2021, from https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Audit process: 5 expert steps for you to get your audit right. (2020, February 20). In Process street. Retrieved October 6, 2021, from https://www.process.st/audit-process/
To Don Luis Villanueva, I appreciate how you discuss the audit phases short but concise by providing the important points and the importance of following each and overall phases. Keep up the good work I am looking forward to know more of your insights in the succeeding topics.
ReplyDelete- Ericka Mañalac (2015-100842)
To Coline Bertiz, it is greatly appreciated on how you construct your discussion. I like the way you define operational audit first and connect it to the processes needed to follow in conducting an audit. Thank you for sharing your thoughts with us, I enjoy reading your work. Keep up the great work!
- Ericka Mañalac (2015-100842)
To John Carlo De Vera, I sincerely appreciate on how you emphasized the importance of executing planning with due care and the significance of following the audit phases especially of the starting auditor. Looking forward to read more of your work. Great Job!
- Ericka Mañalac (2015-100842)
Hershey Mae Salutim said....
ReplyDeleteAccording to Murdock, there are four phases of Operational Audits namely, planning, where it is the kost vital part of the process because if they fail to plan thenthey are wasting time and effort by doing many steps that you are not sure of, at this stage the audit plan is based on the analysis of the company’s accounts, processes, projects and function within an organization. Assessing risk variables is also critical at this point, as they may increase or decrease the underlying risk.The next phase is fieldwork, in which auditors interview, document, apply testing methodologies, manage fieldworks, and provide status updates to determine if the company’s process or program is aligned to meet the company’s goals and objectives, and verify if the controls are in place as assigned by management. Third, the auditor reports the results of a series of tests and evaluation of the data provided; the auditor communicates or relies on the results of the executed plan; and last, the auditor provides an update on the corrections and problems that have been resolved. (Murdock, 2017)
Audit phases are very important to follow because it will save the auditors time and effort. For example, if the auditors don't follow the first phase and jump to the second phase, they are wasting time and effort and if they don't take note of the key personnel who need to be interviewed for the audit and it may also affect the person's or company's day-to-day activities. Also, if they try to eliminate one step, it may have an impact on the whole result. For example, if they don't execute the last portion, the follow-up phase, how will management or the client know whether the problems have been resolved or if the solutions have been implemented?.
All in all, Following the auditing phases will result in a fair and balanced audit, and I believe that each process is crucial to creating a credible and satisfactory audit result; skipping one phase may compromise the quality of the results and the auditors' credibility.
Reference
Murdock, H. (2016). Operational Auditing:
Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. Pp 33-57.
-Hershey Mae D. Salutim (2019-106961)-
We all know that Operational Auditing is systematic therefore, it is done according to a system or method. In general, it is important to follow processes or phases so you don’t mess up. For example, in doing accounting cycle, you don’t do journalizing without identifying transaction or start with posting in general ledger and then make a financial statements because there are steps to follow and it will be confusing and time consuming if you skip those steps. Same goes with Auditing. It is important to follow auditing phases in order to achieve auditing goals or objectives. You cannot skip or miss any of the five (5) phases of Operational Auditing ( selection, planning, execution, reporting, follow-up) because if you do or if you don’t start with selection phase, your audit will result to dissatisfaction or worse, will result to a professional liability.
ReplyDeleteFollowing auditing phases can indeed achieve a balanced and fair audit. According to the reading material, selection phase is where auditor assess risk at the end of the calendar year and develop audit plan for subsequent year based on the assessment and availability of resources. And then planning, which I think is the most important phase in auditing, this is where they communicate with their client and gather background information about their client and client’s business. Then next is where you execute your plan. In this first three phases, I believe we’re already implementing fairness and balance because we are thoroughly assessing previous operations and information of the client and we are interacting with the client. Following these five audit phases safeguards against error.
References
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Gartland, J. (2017). The Importance of Audit Planning. Journal of Accountancy. https://www.journalofaccountancy.com/issues/2017/sep/importance-of-audit-planning.html#:~:text=Often%20overlooked%2C%20the%20real%20benefit,help%20reduce%20professional%20liability%20risk.
Velasco, Mely Jane (2019-103477)
Merriam-Webster defined phase as "a distinguishable part in a course, development, or cycle". A phase is distinguished part which should be classified as an important part of a cycle.When someone follow rules, regulations, and laws it is presumed that he is doing things correctly. The same applies to audit phases, following the right audit step or audit phases means the auditor is doing his work effectively. Those audit phases is the standard to be followed by auditor to keep them in track of what should they do to obtain their objective. Audit phases includes selection, planning, fieldwork, reporting and follow-up which is ordered perfectly to carry out the objective of an auditor. When auditor fails to follow the step accordingly, it may results to a ineffective, fail, or worst case scenario disaster to the organization that they are auditing. Each steps on audit phase has an defined objective and should be used for the next step. Modifying or exchanging the steps of audit phase will change the result of the next step. Following audit phases properly will result to and effective and efficient way of conducting audit and will conclude in a balance and fair audit. Fair audit as it will take accounts all the necessary information without jumping conclusion, as the phase steps are taken correctly, and balance as the auditor will provide the opinion whether good or bad.
ReplyDeleteReferences:
Ben Davis. (2021). Why is it important to follow step by step procedure?. Mvorganizing.org. https://www.mvorganizing.org/why-is-it-important-to-follow-the-step-by-step-procedure/
Merriam-Webster. (n.d.). Phase. In Merriam-Webster.com dictionary. Retrieved October 13, 2021, from https://www.merriam-webster.com/dictionary/phase
The Office of Internal Audit. (n. d.). Audit Process. University of Oregon.
Retrieved October 13, 2021, from
https://internalaudit.uoregon.edu/report/audit-process
AGULLO, JAMAICA MAE A.
ReplyDeleteCBET-01-502A
Operational auditing is a future-oriented decision set by many companies to ensure that they are moving forward. With this idea, one can truly say that plans are necessary for achieving the goals in the long run and it needs to undergo a process. Upon achieving the efficiency and effectiveness of an individual as an operational auditor, we can dive deeper into the realm of auditing phases.
The flow of the phases is planning, fieldwork, reporting, and follow-up (Muffet, 2021). These are simple consecutive steps that one may apply in his/her workplace or even in real life. But as for the role of operational auditors, it requires more attention. Just like in the manufacturing process, auditing phases cannot be skipped by moving to the next phase without finishing the foregoing actions. Skipping will only make the whole output to be ineffective because some parts of the phases are not fully assessed. The phases of auditing give attention to the littlest detail of how the staff of a restaurant greets their customers, how secured is the online database, and the associated risks after winning the project. This may seem to be exaggerating but the actions of the employees themselves whether virtual or actual can affect the whole business. To highlight the following phases, planning is the strategic way of dealing with the long-run risks associated with achieving the goals, fieldwork is where the documentation happens, reporting is the communicating of acquired data, and follow-up is the ensuring that the required measures are implemented. Without this proper phasing, entities will have difficulties meeting their goals and they will not be able to trace back their steps to find out the trouble spot of the whole process (Qvalon, 2021).
All in all, the operational auditing being the backbone of the strategic operations of the entities, in the long run, will not be effective and efficient if auditing phases are not fulfilled. It is the best way of ensuring the standing of an entity and having a more idealistic vision. When it comes to achieving a balanced and fair audit, auditing phases can be used. It's not required that a company shall have all the same phases but is highly encouraged to make use of the basic auditing phases. Because as time goes by, operational auditors may develop a strategic way of doing auditing phases, from basic to more intensive phases. And yes - auditing phases can lead to the most balanced and fair audits because auditors have gone to process and conclusion that will picture two or more scenarios. It may be too costly on the part of the company and exhausting to the auditors as well, but the process is worth it. This will save the entities from some possible risks that may arise during the implementation of measurements in a long run.
Muffet, T. (2021). Internal Audit Process. Rock content: Infographic.
https://visual.ly/community/Infographics/business/process-internal-audit
Qvalon. (2021). What is an operational audit process?. Operational Audit Overview: Definition, Process, and Purposes.
https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes
ReplyDeleteAccording to The Office of Internal Audit, there are 5 phases of auditing; they are (1) selection, (2) planning, (3) Fieldwork or Execution, (4) Reporting, and (5) Follow-up. The selection phase plans the start of auditing starts when the financial statements are made. This phase is where the financial statements and the performance of the entity is evaluated. This will be the basis to identify the areas where adjustments can and should be made. After knowing the specific areas that need innovation you need a goal and develop a plan. This is the purpose of the planning phase the end goal and possible plans or adjustments are created here. The next step is the execution or fieldwork phase this is where the application and the gathering of the result or effect of the adjustment are made. Reporting is the communicating of the conclusion made to the management of the entity. Auditing does not end here; the final step is the follow-up phase. In which you need to know if the management did the adjustment made and compare it with the previous financial statement and performance of the entity. This is also where the effect of doing the adjustment made to the other areas is evaluated. For example, you made an adjustment in the operating department; then you will notice some changes in the admin, accounting, and maintenance departments.
It is important to follow these phases to have a smooth flow of auditing and to have an excellent recommendation. This will improve and make sure that the financial statements are balance and fairly valued because you yourself are the one that will be doing it. This allows the auditor to correct the over/under estimation made by the management making it.
REFERENCE
Au section 328 - auditing fair value measurements and disclosures. PCAOB Public Company Accounting Oversight Board. (n.d.). Retrieved October 12, 2021, from https://pcaobus.org/oversight/standards/archived-standards/pre-reorganized-auditing-standards-interpretations/details/AU328.
Audit process: Internal audit. Chicago State University. (n.d.). Retrieved October 12, 2021, from https://www.csu.edu/internalaudit/auditprocess.htm.
Contributor, C. (2020, September 15). What is a balance sheet audit? Small Business - Chron.com. Retrieved October 12, 2021, from https://smallbusiness.chron.com/balance-sheet-audit-60756.html.
Office of Internal Audit. Audit Process. (n.d.). Retrieved October 12, 2021, from https://internalaudit.uoregon.edu/report/audit-process.
An audit is the examination and evaluation of activities, processes, and operations of the business, as well as a form of quality control done by the business. However, before the audit is executed, an auditor must design or establish appropriate audit procedures that are necessary to conduct the audit in a responsible and efficient manner. The audit phases assist to identify everything the auditor does throughout the audit domain. ("Importance of Audit Procedures," n.d.) This audit phases are a process that serves as guidance or direction to the auditor in order for the audit to be properly conducted. And, whereas each business's audit phases or processes are unique due to the nature of the business, it primarily consists of four phases: planning, fieldwork, reporting, and feedback. (Chicago State University, n.d.). Each of these stages is critical in carrying out the audit and communicating the audit findings. And the importance of each phase is also mirrored in the importance of abiding to the proper audit process.
ReplyDeleteThese audit phases are essential for an auditor to follow because they provide relevant information such as: Who is the client? When will the audit start happening? What are the audit's goals? Where will the audit take place? How will the audit be conducted? It also addresses the client's industry and regulatory factors, client operations and administration, and includes techniques and strategies that will assist an auditor to stay on track, identify potential risks, and know the scope of the examination. ("Audit Plan," 2021). In addition, properly following each phase of the audit will support the auditor in working smoothly and maintaining audit quality, maximizing the output while utilizing the resources, identifying risks, producing valuable and innovative solutions to problems, and effectively communicating the audit reports. (Courtnell, 2020).
Furthermore, to underscore the importance of adhering to audit phases, the below example are the consequences if audit phases are neglected or an inadequate audit is performed. For example, if the auditor disregards the audit checklist or fails to follow the strategies and techniques outlined in the audit plan, it may result in a failure to detect fraud or breaches, which could lead to a financial crisis or even the business's bankruptcy. (Courtnell, 2020). From the aforementioned consequences, we can evidently see the significance of adhering to or executing correctly the audit phases or plan as it is beneficial to achieve a thorough, accurate, fair, and balanced audit.
To summarize, following the audit phases is pivotal for an auditor in facilitating a smooth audit process, evaluating problems, and gathering data or evidence to support audit findings that show true, fair, and accurate information that is helpful to address risks and make decisions.
References:
Audit plan. (2021, September 20). In Wikipedia. https://en.wikipedia.org/wiki/Audit_plan
Courtnell, J. (2020, February 12). Audit Process: 5 Expert Steps for You to Get Your Audit Right Process Street. https://www.process.st/audit-process/
Chicago State University. (n.d.). Audit Process. https://www.csu.edu/internalaudit/auditprocess.htm
Importance of Audit Procedures. (n.d.). Wiki Accounting. https://www.wikiaccounting.com/importance-audit-procedures/
- GARCIA, HELEN GRACE M. (2019-106976)
The audit is regarded as an essential step in the process of building market trust. It ensures that the company's financial statements are free from material misstatements, and from all forms of frauds. Hence, it is important to ensure that auditors are capable of carrying out their duties responsibly, so that the users of financial statements can rely on the audit statements presented to them. In order to achieve the desired level of accuracy while conducting the audit, auditors must develop audit processes that they can carry out across the scope of the audit, for them to obtain the necessary evidence which enables them to make conclusions that are based on the respective audit objectives so that they can be able to express their opinion in a proper manner.
ReplyDeleteThese audit processes include five phases– selection, planning, conducting fieldwork, reporting results, and following up on corrective action plans. Each of which is important depending on the assertion. In the selection phase, Auditors must examine relevant corporate documentation as well as past audit findings. The auditor must determine what types of evidence are required during the planning phase, collect papers from past audits, and get preliminary statements from all parties involved. In the fieldwork phase, Auditors must carry out the steps outlined in the planning process. Conducting interviews, reviewing laws, policies, and best practices, verifying sample transactions, analyzing data sets, and conducting surveys are common steps in this process. In the reporting phase, Auditors must hold an exit meeting with management at the end of the fieldwork to discuss the audit results, specific findings and recommendations, and other observations. In the follow up phase, Auditors must conduct a follow-up audit to address the findings of the previous audit. It is recommended that follow-up occur within at least one year of the release of the first audit report.
Following these audit phases, means to standardize procedures. Standardized audit processes incorporate best practices to ensure that audits do not go wrong. It is important to the overall audit process since it directly affects the auditor's ability to determine the nature of the transaction and how they should approach it during the audit. It is also something that should be emphasized in order to create a smoother, more relevant audit process, which can assist auditors in conducting a balanced and fair audit and gathering appropriate evidence on which to base their recommendations.
References:
Sinra Kong, ACCA, CPA (2021). Importance of Audit Procedures. Wiki Accounting.com. https://www.wikiaccounting.com/importance-audit-procedures/
Jane Courtnell (February 12, 2020). Audit Process: 5 Expert Steps for You to Get Your Audit Right. Process.st. https://www.process.st/audit-process/?amp
-CHENCEL-ANNMAE F ALMODIEL (2019-105222)
Nombrado, Sean Lester / 2019-106902
ReplyDeleteAn operational audit aims to analyze administrative, managerial, and functional elements to improve company operations and categorize which areas should reduce expenses and assist the processes with the highest demands. However, many investors demand the company they invested in because of poor performance, compliance issues, and abnormal revenues or expenses. In this discussion, significant phases involve performance in the audit field, which is essential for the company's productivity. These phases are planning, fieldwork, draft reporting follow-up report, validating observations, responding period, and final report.
Following these audit steps is critical so that auditors can minimize the need to review and approved audit plans, timeframes, and opportunities. The auditor needs to follow and understand the phases because there could be errors or fraudulent acts; it also contributes a beneficial mechanism for the auditor to distinguish shortcomings and recommend framework improvements or additional review controls to mitigate the different risks in an organization (Murdock,2016). Audit stages are the techniques, tactics, and methods used by auditors to collect the necessary data to form judgments based on the various audit goals and appropriately convey their perspectives. It is also essential to assess the degree of expertise of the person conducting the control. A lack of knowledge is a common source of errors perpetrated by an approver. (Sinra,2018).
A balanced and fair audit can achieve audit phases by presenting evidence and factual information using metrics that consist of data related to performance, productivity, and risk indicators. Audit evidence is essential to document all the processes performed by the auditor, whether it is to support statements regarding deficiencies or to provide credibility to satisfactory circumstances since they must accurately present the collected and analyzed data.
Murdock, H. (2016). Operational Auditing: Principles and Techniques for a Changing World (Internal Audit and IT Audit) (1st ed.). Auerbach Publications.
Sinra, K. (2020, September 18). Importance of Audit Procedures. Wikiaccounting. https://www.wikiaccounting.com/importance-audit-procedures/
Before I discuss as to why it is important to follow the audit process, let us first determine what the different phases are.
ReplyDeleteAccording to Courtnell (2020), the first phase of this process is the selection, where the team develops and selects the proper audit plan based on the assessment and the department’s available resources for the subsequent year. They will move up to the planning phase wherein the operations auditor will initiate contact with the client. Here, they identify risks and determine the objectives and scope of the audit as well as the timing of fieldwork and report distribution. Next in line is the execution phase. They bring the plans into life. They do all the necessary fieldwork for the audit process. They keep their clients informed about the process through regular meetings. They discuss audit observations, and recommendations to their clients based on their potential findings. Then they will go through the reporting phase. Here, the summary of the audit findings, conclusions, and specific recommendations are officially communicated to their clients [who have the option of responding to the report and submitting an action plan with a deadline]. These responses are included in the final report, which is sent to the appropriate level of management. Within one year of the report's release, the audit team follows up on all audit findings.
It is crucial for the team to follow the phases of auditing to arrive to proper and right observation. Doing so can bring them to the right path: to come up with the appropriate measurement of the pros and cons of a certain area in the field and be able to examine each and every part of the operations [critically] without missing or overlooking something. Hence, arriving to a balanced and fair audit as they are able to focus to the main issue. They do not come up with a solution right away without knowing what the problem is. It is as simple as frying an egg. You do not put the egg on the stove before the pan.
Reference:
Jane Courtnell (2020), Audit Process: 5 Expert Steps for you to Get Your Audit Right, Retrieved October 14, 2021, from https://www.process.st/audit-process/
-Carlos, Leila Lauren M. 2019-101650
The audit is seen as a critical stage in the development of much-needed market trust. It aids in establishing that the company's financial statements contain no major misstatements and that the company is free and fair from all sorts of fraud. In this sense, it is critical to guarantee that auditors are capable of doing their duties responsibly so that readers of financial statements may trust the audit statements that these auditors present.
ReplyDeleteAudit procedures are steps taken by auditors throughout the audit scope in order to meticulously prepare and perform the audit process. They can be defined as the processes, strategies, and methods used by auditors to gather the essential evidence that allows them to draw conclusions based on the audit objectives and communicate their view properly. They mainly include components like vouching, tracing, observation, an inspection of intangible assets, and usage of subsequent analytical procedures. Therefore, it is critical to consider the fact that audit procedures assist in justifying whatever the auditor conducts throughout the audit domain so that supervisors understand the reason and logic for the audit being undertaken. Lastly, Audit Procedures are designed to aid in the definition of a process flow through which the total audit will be carried out.
Yes, going through all of those audit phases can achieve a balanced and fair audit because it ensures the stability of one's company. Auditors cover many angles in the business so it is really important for them to not missed a single detail about the audit processes, techniques and strategies.
-Dalmacion, Khyla Bernadette S. (2019-105708)
We perform operational auditing to ensure the growth and potential improvements of the firm in every aspect that we can assess. An effective operational auditing has brought many firms into a better position in the corporate world. The company can identify risk spots and can operate more effectively through auditing its policies, processes and procedures. There are five auditing phases that were introduced by the University of Kansas which is called the professional auditing process. An operational auditor must abide the process without neglecting the supposedly next phase. This auditing process includes Selection, Planning, Execution, Reporting and Follow-up phase. Each of the phases plays a different yet important part in auditing things. A firm really needs to consider to follow the phases accordingly because the essence of the process takes place here. In selection phase, we need to do a risk assessment which may require the auditors to look through the business documents and audit results. Next is the Planning phase, the auditor needs to interact with the people in all departments. The auditor takes time to meet with the clients and staff members to discuss identifiable risks. The third step is the Execution phase, once the audit plan is done, it its executed by the internal auditor staff. The clients are kept updated of the process through meetings which discuss audit observations, potential findings, and recommendations. Next is the reporting phase which contains the brief discussion of audit finding, conclusions, and recommendations. Lastly, the follow-up phase, which follows up on all audit planning within one year of when the report was issued. This professional auditing process assures a great chance of maintaining the firm’s long and short-term objectives. It offers a more certain and effective insights leading to better progress like the increase in sales, more efficient processes and better flow of operating activities. Fair and balance audit can be achieved since the auditing process does not let anything slide and looks realistically on everything inside the firm.
ReplyDeleteReferences:
The audit process. (2014, April 9). In Internal audit. Retrieved October 6, 2021, from https://internalaudit.ku.edu/project-process
Grabillo, M. A. (2021). Operational Audit: What are its Phases? Retrieved October 6, 2021, from https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Audit process: 5 expert steps for you to get your audit right. (2020, February 20). In Process street. Retrieved October 6, 2021, from https://www.process.st/audit-process/
Colarina, Adrian Mark T. 2019-105709 CBET 01-501A
Processes are significant because they show how things should be done. According to Roger von Oech [2021], most people consider success and failure to be completely contradictory, although they are both outcomes of the same process. Following the procedures will help you discover uncertainties that might lead to failure, but it doesn't imply you can't do something about it. If uncertainties are discovered, you have the power to give understandings on how to resolve them and turn them into opportunities along your path to success.
ReplyDeleteIn the context of auditing, the same concept applies. auditing processes are important to achieve company’s objectives by reviewing the company’s operational activities and help identify opportunities to improve company’s overall performance. Through this processes, company can assess whether they have to change something and if company’s activities are making any differences towards the objective of the company. Risk assessment is critical in these processes because it not only identifies potential risks but also the opportunities that may arise as a result of those risks. Furthermore, determining the company's priorities will assist in the better allocation of the company's resources and, through proper assessment from the planning up to follow-up phase, companies will have a better understanding of what they need to change, in things they have to keep doing, and processes that need to be improved for the company's success.
Audit customers, as stated in the audit process, have the opportunity to participate at each stage of the audit process. Without a doubt, the process works best when client management and Internal Audit have a good working relationship based on open and constant communication. Also, with such methods, auditors may need to dig deeper and perform other tasks in order to comprehend their findings and fix any errors. The auditors' comprehensive hard work results in relevant reports that are both instructive and unbiased. All in all, auditors must follow these auditing process as it would make their audit reports the way it should be and, ultimately, it would achieve the balanced and fair criteria of audit.
Mary Ann Cebuano (2019-106907)
It is important to follow the audit phases because this is the appropriate way to have proper planning on how to examine the performance of a company. If we take each phase one by one, it has its contribution that can enlighten on how important it really is. There are five phases on audit process. First is the selection phase, risk-based approach is used in this phase. They talk here about the risks and potential barriers to their objectives. It is important to know and discuss the risks that a company has so that they know how to adjust the plan. Second is the planning phase, this is where all the planning begins, what steps are to be taken. In this phase, Internal audit conducts an entrance meeting with management to discuss the purpose of the audit, risk factors, and other logistics. Next is the fieldwork phase, here we will do the steps discussed in the planning process. In the reporting phase, this is the exit meeting with the management where the results of the audit will be discussed, and if there are any recommendations and other observations. Last is the follow-up phase which to ensure that plans are implemented, all audit recommendations and management corrective action plans are followed up on. We can see that the roles of each phases are intertwined so it is important to follow it because this will bring clarity to management and this will be the foundation of the business on how to improve or what else can be maximized in the business.
ReplyDeleteYes, it can achieve a balanced and fair audit if the management gave an accurate and factual account balances to the internal audit. They may achieve a balance and fair audit also if the auditor analyzes the balances with credibility.
Office of Internal Audit. (n.d.). Audit Process | The. Retrieved October 5, 2021, from https://internalaudit.uoregon.edu/report/audit-process
Tapia, Gian Tricia B. 2019-103668 CBET-01-501A
Regularly reviewing your company's internal procedures guarantees that all operations are running as smoothly as possible. It can generate more revenue and can save operating expenses, making a company more profitable. It is focused with feasible changes to your business processes rather than only your faults and accomplishments. An operational audit is primarily concerned with a firm’s internal procedures. Operational auditing can help the company to diagnose the threat in the company’s internal procedures. By doing this, it utilize its procedures and policies via auditing which give rise to the company’s efficiency, functionality, and productivity. Numerous businesses have improved their positions in the corporate world as a result of competent operational audits. Five-phase procedure are comprises of selection, planning, execution, reporting, and follow-up phase. It is important to know these five phases because each one of them plays a vital role in an auditing firm. First and foremost, selection phase, in this phase the auditor and the management get the measure of the risk and possible obstacle for next year in order to develop it based on its aftermath. In planning phase, the auditor and management will gather all reliable details and conduct risk analysis with its clients. Thirdly, execution phase which starts when audit is already planned and enforced in the working field. Through constant meeting the clients are informed about the auditing process which discusses the insights, possible outcomes, and suggestions. The fourth one is the reporting phase which encompasses of the summary of the results, judgement, and suggestions for improvement from the audit. Last but not the least, follow-up phase which contains all the audit suggestion for improvements and to ensures that the plans are accomplished within one year after the issued report. These five phases allows the auditor to provide an accurate and relevant information which leads to a better result that can help the firm’s to generate profitability and efficiency. Following these five phases can achieve a balance and fair audit because in each phases it is actually strictly follow all their roles in order to be efficient and effective.
ReplyDeleteReferences:
The audit process. (2014, April 9). Internal Audit. Retrieved October 7, 2021, from https://internalaudit.ku.edu/project-process
Audit process. (n.d.). The Office of Internal Audit | University of Oregon. Retrieved October 7, 2021, from https://internalaudit.uoregon.edu/report/audit-process
Grabillo, M. A. (2021, October 2). Operational audit: What are its phases? GLIMPSE OF A CPA'S MIND. Retrieved October 7, 2021, from https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Operational audit overview: ☝️ definition, process, and purposes. (2021, July 15). QVALON Mobile retail solution. Retrieved October 7, 2021, from https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
Drice, Arielle Jean G. 2019-105710 CBET-01-501A
ReplyDeleteTo Jennalyn P. Batjer
You made a very informational and detailed work about operational auditing. It is commendable that you elaborated the phases of operational auditing with ease. Job well done!
- PATRICIA DENISE P. LEYCO (2019-101438)
To Angelika D. Francia
You did an outstanding work as you discussed the importance of following the audit phases. It is apparent that you understood the topic very well. I learned a lot while reading your work. A fantastic job!
- PATRICIA DENISE P. LEYCO (2019-101438)
To Stephanie Balaysoche
You created an informative piece that clearly highlighted the relevance of following the audit phases. I have been enlightened by the facts that you provided. A great work!
- PATRICIA DENISE P. LEYCO (2019-101438)
An operational audit refers to the process of evaluating a company's operating activities – both on a day-to-day level and a broader scale (Grabillo, 2021). While the process could improve the overall system by making it more efficient, it could turn things around and result in disappointments and tons of wasted resources.
ReplyDeleteRealization of better results and maximized resources could happen when there is a proper process executed; when it follows the phases correctly. It starts with Selection, then Planning, Execution, Reporting, and lastly with Follow-Up. These phases are different puzzle pieces that go hand-in-hand and would reveal the big picture in the end. Having this orderly approach in performing an operational audit would be beneficial and valuable in different ways. It helps identify where to start, in acknowledging the risks, and in establishing goals and objectives. Starting with familiarizing oneself with the company means being prepared and would save a lot of time and resources. It would also result in forming a suitable report with reliable findings and recommendations. The intention for the engagement with the employees, documents, and transactions of the company would be clear because of the plan created. As the whole company is involved, it opens effective communication with the clients. It is also because there would be constant updates on the audit progress. That way, it also results in a sound and fair report as there would be fewer opportunities for data manipulation. All the phases are as essential and beneficial as the others, and no phase must be taken for granted. It is like climbing a stair that skipping even just a step would increase the chances of falling as it is hard to maintain balance.
References:
Courtnell, J. (2020, February 12). Audit Process: 5 Expert Steps for You to Get Your Audit Right | Process Street | Checklist, Workflow and SOP Software. Process Street. https://www.process.st/audit-process/
Grabillo, M. A. (2021, October 2). OPERATIONAL AUDIT: WHAT ARE ITS PHASES? Markgrabillo.blogspot.com. https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Murdock, H. (2016). Operational Auditing: Principles and Techniques for a Changing World (1st ed.). Auerbach Publications. https://doi.org/10.1201/9781315368733
Shayne Danielle G. Samson 2019-102562
An operational audit examines the processes, systems, and procedures of an organization (QVALON Blog, 2021). Making it more comprehensive and extensive than we initially thought. As operational audits are forward-looking processes (EBay, 2019), it has to follow the systematic course of actions to ensure that the flow of the information is accurately aligned so that the diagnostic of the organization will be accurate. With that, phases of operational auditing have been developed. These phases are the steps to be followed when one is conducting an operational audit in a firm.
ReplyDeleteThe phases of operations audit provide a simple, effective, and time-tested approach to organizing, performing, and communicating the results of the work done (Murdock, 2016). Thus, making it significant to follow these phases to conduct the auditing properly and to provide a timely mannered analysis of the operations. Following these audit phases ensures the smooth flow of analyzing every little detail provided by the organization to the auditing department. This way, the ideas can be arranged and elaborated on to what is to be prioritized, improved, secured, and maintained as it is to provide effective operational processes and policies to the entity. Succeeding through these phases guarantees that the intensive dissection of every part of the business operations starting from one point to another, every policy that is most likely to be changed and what should stay as it is, every achievement of the business and the risks and opportunities arising from every crook and cranny of the business.
These phases of operations audit can achieve a balance and fair audit if the one who’s conducting the auditing can follow the process like how it is supposed to be. This way, information can be balance as following the steps takes one from one level to another where the evidence is thoroughly examined to prove what needs to be proven and provide information for their improvement. It can also have a fair audit as following the steps requires one’s full attention and honesty so that the process will not be blocked, securing the flow of every information to the eyes of the auditors providing more insights and observations.
Just like any other systematic process, operational auditing follows its phases securing its flow, effectiveness, constructiveness, and accuracy. Thus, resulting in a flourishing business with intact internal processes, efficient risk and opportunity analysis, effective policies, and various achievements.
References:
Eby, K. (2019). Operational Audits 101: Processes, Examples, and Checklists. Smartsheet. Retrieved, October 8, 2021 from https://www.smartsheet.com/operational-audit-process
Murdock, H. (2016). Operational Auditing: Principles and Techniques for a Changing World (1st ed.). Auerbach Publications. https://doi.org/10.1201/9781315368733
QVALON Blog. (2021). Operational Audit Overview: Definition, Process, and Purposes | QVALON. Qvalon.com. Retrieved, October 8, 2021 from https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
Talabong, Ela Rain F. - 2019-102788
Audit phases is composed of Planning, Fieldwork, Reporting, and Follow-Up. (Murdock, 2019 p.33). It provides the systematic plan to an efficient and effective approach by communicating the results. It all starts with Planning, which serves as the foundation of every business venture. As the famous quotation goes, “Failing to Plan is Planning to Fail”. It states that in order to succeed, we must always provide and build a concrete and coherent plan. Behind every successful business is a well developed, organized, and transparent planning team. As per Gartland (2017), Audit Planning helps to identify the potential risks or problem that may occur from the beginning. It can save time by addressing these issues that can cost you later. Also, through proper planning, it helps to focus on achieving the optimal results rather than finishing the audit for compliance purposes only. It serves as a guide on achieving a balanced and fair audit. Second, Fieldwork is the phase where the assessment of internal controls and compliance happens. (University of Texas, 2021). In this part, the team communicates the observations, potential risk and recommendations to the management and clients. It is important to identify and eliminate the root cause of the problems. The third phase of Auditing is called Reporting. This is where the written audit reports are summarized and communicated to users of the information. (Wayne State University, 2021. Financial Statements are supplemental for assessment of a company’s overall status. Lastly, Follow Up is implemented after the completion of an audit. It is where review and evaluation happens. Overall, these four phases of Operational Auditing is essential to achieve a fair and balanced audit. Through proper measures, it can play a huge role in the firm’s success. It is essential in assessment of compliance and regulatory requirements. It also ensures maximum benefit for a business through following appropriate practices, identifying potential risks, and corrective measures.
ReplyDeleteReference:
[1] Gartland, D. J (2017). The importance of audit planning. Retrieved from https://www.journalofaccountancy.com/issues/2017/sep/importance-of-audit-planning.html
[2] Murdock, H. (2017). Operational auditing: Principles and techniques for a changing world. Taylor and Francis Group, LLC. p. 33
[3] University of Texas (2021). Audit Process. Retrieved from https://audit.utexas.edu/audit-process
[4] Wayne State University (2021). Internal Audit Process. Retrieved from https://internalaudit.wayne.edu/process
Kianna Erika D. Zarain
CBET-01-502A
Paglinawan, Eliazar A.
ReplyDelete2019-101459
CBET-01-501A
I think the importance of following the audit phases is it produces the most possible effective and efficient audit practices. These phases are coherent and, therefore, must be done in an orderly manner. I don’t think it can result to a similar or better outcome otherwise. Planning should be the first and foremost phase. Scoping, funding, defining the population of interest, how testing will be done, and announcing the audit are all part of the planning process. Planning is, without a doubt, the most crucial aspect of an audit (Murdock, 2017). Planning is basically the framework of auditing so I think it should be done before anything else. The next step in the engagement's life cycle is fieldwork. The majority of the testing is done in this phase, which includes interviewing, documenting, applying testing methodologies, arranging fieldwork, and delivering status reports (Murdock, 2017). This is simply the next step planning is prepared for, testing the efficacy of the audit plan. Auditors must base their work, conclusions, and views on facts or information that support their beliefs and can be utilized to persuade others that conditions and practices are as described. To put it another way, auditors collect data to support their job and persuade others whether or not conditions are satisfactory (Murdock, 2017). The transmission of results, also known as reporting, is the third part of the audit. It includes sharing the review's findings, insights, and best practices, as well as making recommendations for corrective action (Murdock, 2017). Communicating the findings to stakeholders is the last step of auditing. This can definitely achieve a way balanced and fair audit compared to auditing without structured phases.
References:
Murdock, H. (2017). Operational Auditing: Principles and Technique for a Changing
World. Taylor & Francis Group, LLC.
This comment has been removed by the author.
ReplyDeleteHi Angelika Francia! I admire how well-organized and understandable your work is. You describe the auditing process and its importance. I commend you for properly citing your sources. Good job!
ReplyDelete- JENNALYN BATJER (2019-101439)
Hi Patricia Denise Leyco! I like your work, it is informative and direct to the point. I admire you for properly citing your sources. Nice work!
- JENNALYN BATJER (2019-101439)
Hi Eliazar Paglinawan! I appreciate how you explain your work in a clear and straightforward manner. I want to applaud you in using proper citation. Great job!
- JENNALYN BATJER (2019-101439)
Operational Auditing is a very essential step that earns trust in the market. It helps to establish that there are no material misstatements in the financial statements of the company, and the company is free and fair from all types of frauds during the operation. There are five phases in operational auditing. These are Selection, Planning, Execution, Reporting, and Follow-up phases.
ReplyDeleteThey can be defined as the processes, techniques, and methods that are used in order for the auditors to obtain the evidence which will serve as a basis to draw a conclusion and express their opinion in a proper manner. Through selection, it occurs the appointment of competent auditors and checking the feasibility of the audit plan, and sometimes checking the request of the audit if there is any. This is to avoid any disruption in the existing operation. The next one is planning/preparation. After the plan is approved, this phase defines the objectives to validate the effectiveness of management functions and mitigate the risks. It is important to keep in mind what is the scope of an audit to ensure that an auditor will not lose focus during the execution. The third phase, which is also important to follow is the execution. It is where the opening and discussion of the meeting is conducted. It includes the agreement from all parties to the audit scope and approach, and the method or processes of an audit. Another one is reporting phase. It is needed for the clients to have an opportunity to respond to the report and make an action plan and set a timeframe for these. The last phase is follow-up. It is vital to verify the suitability of the action taken.
Following the procedures will lead to carefully plan and execute the audit process. It facilitates a smoother and logical way that helps auditors to gather proper data and make sound decisions accordingly. It mitigates risks and maintains consistent audit quality. In short, following this audit phases safeguards against audit error therefore, it can achieve a balanced and fair audit.
REFERENCES:
Five Phases of Internal Quality Audit. https://youtu.be/4ZdvEOZevoM
Murdock, H. (2017). Operational Auditing Principles and Techniques for a Changing World. Taylor & Francis group.
HEDREYDA, HILARY N.- 2019-103876
To Patricia Denise Leyco
ReplyDeleteYour work is very detailed and well-organized. You started it by defining operational auditing and then elaborately explained its phases. Excellent work.
- Angelika D. Francia (2019-101440)
To Jennalyn Batjer
You did an impressive work. It's informative and well-explained. It helps me to have a better understanding of the operational auditing phases.
- Angelika D. Francia (2019-101440)
To Stephanie Balaysoche
Job well done. I can say that you did a thorough reading about the topic. You explained it well and made it easy for everyone to understand.
- Angelika D. Francia (2019-101440)
Auditors have been under pressure to improve the effectiveness of internal audit while also conducting audits in a more efficient manner. Both can be attained by investing more time and following the proper audit processes. An audit process is a set of methods and techniques used to examine specific business operations to be carried out by internal auditors in order for them to successfully execute the internal audit. It may appear complicated but organizations must view it as a tool in the pursuit of greater efficiency and effectiveness in the value chain processes of the organization.
ReplyDeleteBy following audit phases, auditors can standardize processes which incoporate guidelines to ensure that audits are working effectively and do not go wrong. Having a systematic audit procedure will communicate audit expectations effectively. Also, we can easily identify what went wrong if something goes wrong in the audit. It can reduce the time required for audit application and increase efficiency by automating repetitive tasks. Focusing on the important audit phases certainly contributes in creating a more efficient and quality audits. It makes much easier for auditors to provide and present proper evidence for any audit review and for developing future plans. These phases should be viewed as a means to assist auditors by providing advantages such as always having an updated and relevant information on how the business operations are running and performing.
Through the use of an operational audit phases, it can give the company a balanced and fair audit as it focuses on the crucial part of an audit plan. Performing these stages properly will help in understanding the flow of activities and related internal controls that will serve as the basis in conducting the operational audit.
Therefore, operational audit process serves as a warning to the administration to take precautionary actions if necessary, as well as an assurance that the organization’s activities are being done correctly. (Veyrat, 2018)
References:
Courtnell, J. (2020, February 20). Audit Process: 5 Expert Steps for You to Get Your Audit Right | Process Street | Checklist, Workflow and SOP Software. Accessed October 3, 2021, from https://www.process.st/audit-process/#audit_process_why
Veyrat, P. (2018, February 26). Business process audit: Benefits, definition and objectives. HEFLO BPM. Accessed October 3, 2021, from https://www.heflo.com/blog/governance/business-process-audit/
- Mendoza, Rhea Lyn B. (2019-101819)
Hi Airon, I agree with your insights on the significance of following an audit phase and I appreciate the effort you exerted to create this one. Keep up the good work!
ReplyDelete- STEPHANIE BALAYSOCHE (2019-101856)
Hi Patricia, you did such an excellent job in providing such relevant information regarding the topic and I'm impressed with the overall content of your work. Great job!
- STEPHANIE BALAYSOCHE (2019-101856)
Hi Angelika, I agree with your reasons why following an audit phase can achieve a balanced and fair audit but other than that, I give you a big thumbs up for creating superb work. Nice job!
- STEPHANIE BALAYSOCHE (2019-101856)
Operational auditing, like traditional auditing, involves a set of processes in different phases that include planning, fieldwork, and reporting (Murdock, 2017). And according to the University of Kansas, there are five phases of auditing, such as selection phase, planning phase, execution phase, reporting phase, and follow-up (University of Kansas, 2014). But regardless of what source you may find, every auditor must follow the phase of planning, fieldwork/execution, and reporting. These three phases are very important for an auditor to follow.
ReplyDeleteThe most essential aspect of auditing is planning, because having a poor plan or no plan at all will make an auditor become inefficient in auditing practices. Setting goals, tasks, and objectives will assist the auditor in identifying the risks that the firm faces, as well as tracking their progress after they commence in executing their plan. During the planning phase, an auditor must do a variety of tasks. Communicating with the respective program manager about the timelines of the audit, requesting necessary operational and financial data and reports, identifying the processes being used, and defining the scope, objectives, project timeline, and budget for the participation are all part of this.
The fieldwork or execution of the planned audit comes after planning. This is also an essential part of the audit since planning without execution will not meet the company's and the auditor's goals and objectives. During this phase, the auditor will decide if the program or process they created is successful and will accomplish their set of goals and objectives, as well as whether all of the controls they devised are working as planned by management. Both planning and fieldwork go hand in hand and may occur at the same time. If the test takes longer than planned, the auditor will create a backup plan to complete that specific work.
The reporting phase is the third phase that an auditor will go through. All of the time and money spent on planning and execution will be wasted if all of the results are not communicated to top management. An auditor must communicate with top management and department heads about the audit results based on their observations and findings in order to determine the best and most effective policies or processes to implement and provide countermeasure ideas. Following the presentation of findings, it is the responsibility of both management and auditors to ensure that corrective actions are done and problems are resolved as planned.
An auditor may accomplish a balanced and fair audit by going through all of these phases because it goes through a systematic, logical, and reasonable solution, policy, and procedures to mitigate the risks that an auditor identifies.
Sources:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press Taylor and Francis Group.
The University of Kansas. (2014, April 9). The audit process. The University of Kansas - Internal Audit. Retrieved October 8, 2021, from https://internalaudit.ku.edu/project-process.
An operational audit involves a review of the activities performed in a program or process in the pursuit of its objectives by individuals, who are often supported by a variety of tools (Murdock, 2017). The aim of an operational audit is ultimately to optimize efficiency. By auditing the business's internal policies and procedures, the company can identify trouble spots and operate more effectively (Accountants Go Cardless, n.d.).
ReplyDeleteTo conduct a good auditing procedure, there are auditing phases or cycle that must be apply. Audit Cycle is the procedure in which auditors of an organization review the financial statements and find gaps in the current processes so that appropriate corrections can be made; The steps or stages in the audit ensure that it is performed diligently and the report publishes information whose validity can be determined and is accurate.
The audit phases ensures that the work is carried out smoothly and no process leaks are involved. It Gives the authority to the auditor to question the current procedures and norms. The audit process can be tracked efficiently which ensures there is no delay in the activities and timely completion of the whole audit. As a result, the outcome of the audit phase is reliable
The audit phases help auditing to be more efficient process for the whole business. It focuses on the procedures that the auditor has to follow to arrive at a balanced and fair report. It enables the auditors to depict the progress of the audit to the management.
References:
Grabillo, M. (2021). Operations audit - discussion assignment week 2. OPERATIONS AUDIT - DISCUSSION ASSIGNMENT WEEK 2. Retrieved October 14, 2021, from https://markgrabillo.blogspot.com/2021/10/operations-audit-discussion-assignment.html?fbclid=IwAR10RvbAUp0ELOXqkyk88M3Kw3wwWgZxoOnUN8FgaLLfL1Ijc_rUkk1X4Xo.
Ramachandran, A. (2021, July 29). Audit cycle. WallStreetMojo. Retrieved October 14, 2021, from https://www.wallstreetmojo.com/audit-cycle/.
Bienice Desiree Barrometro
2019-101546
Importance of following audit phases:
ReplyDeleteAccording to Tricia Scherer (2020), Internal controls that are extremely tight. Your internal auditor's first priority is to assess the control environment of your company. Internal audits look at your internal controls, which include actions, systems, and processes, as well as monitoring, to make sure they're well-designed and implemented, and that they're performing as they should, regardless of who's in charge. Internal audits identify inconsistencies in your business practices and procedures, as well as your governance processes, and make recommendations on how to streamline them to save time and money. It examine your cybersecurity environment, such as counting all of your digital devices and determining whether they are secure in accordance with your policies. They also look for flaws in your digital systems and networks and advise you on how to patch them. Internal audits examine all of your enterprise's identified risks and determine whether your risk mitigation measures are effective. If they aren't, audit reports will tell you what you need to do to fix the problem. Internal audits examine the laws, regulations, and industry standards to which your organization is required to adhere and determine whether or not you are in fact in compliance. Where you fall short, auditors will advise you on how to fix the problem. And lastly remember that Internal audits are required if you want to be confident that your organization is meeting its core business objectives.
References:
Scherer, T. (2020). 6 Benefits of Internal Auditing. Retrieved October 14, 2021, from https://reciprocity.com/6-benefits-of-internal-auditing/.
-Victorio, Boy D. (2019-101186)
This comment has been removed by the author.
ReplyDeleteAn auditing process is a series of acts and processes used to keep an organization under control. It make sure that procedures are running well and that proper controls are in place. Before we proceed to it's significance, let me explain these phases.
ReplyDeleteFirst is planning and risk assessment, in this phase various risk considerations are examined, including financial, compliance, operational, reputational, health and safety, and the preservation of organizational value. The scope, budgeting, defining the demographic of interest, how testing will be done, and announcing the audit are also part of this process. Second is fieldwork, this phase comprises interviewing, documenting, applying testing methodologies, coordinating fieldwork, and delivering status reports, and it is where the majority of the testing is done. It essentially consists of two components: (a.) Determining whether the process or program under consideration is well-designed, with the associated goals and objectives likely to be met. ( b.)Check to see if the controls in place are working as intended by management. Third, reporting, it include sharing the review's findings, insights, and best practices, as well as making recommendations for corrective action. Lastly the follow-up, it make sure if the corrective action was taken, therefore it entails looking into what management did to resolve the problem that was reported.
Hence, these phases are crucial because it offers a set of financial statements legitimacy and gives shareholders confidence that the accounts are honest and fair, assist auditors to properly handle audit expenses, the risk of misusing resources is reduced, resulting in lower expenses and higher revenues as well as it improves a organization's internal controls and procedures to avoid any misunderstanding with the clients. And yes, auditors can achieve a balanced and fair audit through these phases as it guides them on how to properly adheres the standards needed to implement a equitable and reasonable audit reports.
Reference :
Murdock, H. (2017). Operational auditing: Principles and techniques for a changing world. Taylor and Francis Group, LLC. pp. 36-57
- LEAREIN JAVIER SANGOL
An auditing process is a series of acts and processes used to keep an organization under control. It make sure that procedures are running well and that proper controls are in place. Before we proceed to it's significance, let me explain these phases.
ReplyDeleteFirst is planning and risk assessment, in this phase various risk considerations are examined, including financial, compliance, operational, reputational, health and safety, and the preservation of organizational value. The scope, budgeting, defining the demographic of interest, how testing will be done, and announcing the audit are also part of this process. Second is fieldwork, this phase comprises interviewing, documenting, applying testing methodologies, coordinating fieldwork, and delivering status reports, and it is where the majority of the testing is done. It essentially consists of two components: (a.) Determining whether the process or program under consideration is well-designed, with the associated goals and objectives likely to be met. ( b.)Check to see if the controls in place are working as intended by management. Third, reporting, it include sharing the review's findings, insights, and best practices, as well as making recommendations for corrective action. Lastly the follow-up, it make sure if the corrective action was taken, therefore it entails looking into what management did to resolve the problem that was reported.
Hence, these phases are crucial because it offers a set of financial statements legitimacy and gives shareholders confidence that the accounts are honest and fair, assist auditors to properly handle audit expenses, the risk of misusing resources is reduced, resulting in lower expenses and higher revenues as well as it improves a organization's internal controls and procedures to avoid any misunderstanding with the clients. And yes, auditors can achieve a balanced and fair audit through these phases as it guides them on how to properly adheres the standards needed to implement a equitable and reasonable audit reports.
Reference :
Murdock, H. (2017). Operational auditing: Principles and techniques for a changing world. Taylor and Francis Group, LLC. pp. 36-57
- Sangol, Learein J.
2019-106977
Annyeong Celine Carandang!
ReplyDeleteYour work is impressive. I love how you define first operational auditing before you enumerate those phases and gave its significance to an entity. The flow of the information is logically arranged. Good job that you cite sources and follow APA format. Fighting, future CPA!
HEDREYDA, HILARY N. (2019-103876)
Hello Me-an Joy Ompad!
ReplyDeleteI love how you elaborate on each phase of operational auditing. That gave me crystal-clear thoughts. Also, I want to commend you for the last part of your discussion. That was a brief and concise conclusion. Fighting, future CPA!
HEDREYDA, HILARY N. (2019-103876)
Hi Jamaica Mae Agullo!
ReplyDeleteI always get impressed on how you explain and elaborate the information you have learned and have gathered. Your discussion about the relevance of the phases of operational auditing gave me further knowledge and ideas. Fighting, future CPA!
HEDREYDA, HILARY N. (2019-103876)
Bataller, Erica Ann R.
ReplyDeleteCBET-01-502A
"There is no elevator to success, you have to take the stairs". No accomplishment is achieved in just a blink of an eye, but rather one goal can be met through process starting from its conceptualization, implementation, continuous assessment on its progress, revising, and adding new tactics and policies that will make it more effective.
Through thorough readings, the significance of following audit phases namely, planning, fieldwork, reporting, and follow-up can be explicitly discussed. First and foremost, it improves business' efficiency and maximizes its productivity. Scope of planning phase is the risk assessment which is collaboratively done with senior management and the board of directors; they opt to generate a strategic plan impacting company operations for management use and an audit plan that identifies what the internal audit function will review based on available resources and the needs and priorities of the organization. (Murdock, 2017). It helps you to understand the risks and how to mitigate it even though there are unforeseen circumstances.
Second, it helps you to identify potential growth areas and pinpoint opportunities. Testing such as interviewing, documenting, applying testing methodologies, managing fieldwork, and providing status updates are part of Fieldwork phase. (Murdock, 2017). Detailed observation on security, flow of customers, functionality of machinery, restricted areas for personnels, safety procedure of loading and unloading of goods in trucks, and most importantly the assessment in an extemporaneous way can lead you to refining the strengths and weaknesses of the company. Additionally, practicing professional skepticism adds value to the financial statements. Auditors are tasked with verifying the integrity of the information gathered and made sure their conclusions are sound and free from manipulation or modification in ways that can compromise its quality.
Moreover, reporting and follow-up phase completes the cycle. Communicating findings, assessing if the criteria are met, quantifying its condition, and asking recommendation to the process owners and relevant stakeholders improves more the organization's growth as they are not being dependent just on the auditor itself. In conclusion, balanced and fair audit are achieved through following the proper audit phases; it develops accuracy and effectiveness on regulations that helps accelerate the business' growth
References:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC.
In every field known not just in the corporate world but all so in mankind, there is not a single one that does not follow any steps and process to achieve something. Just like other fields, Operational Auditing also has phases to follow in order to come up with a result that would help a company or business. An operational audit refers to the process of evaluating a company's operating activities – both on a day-to-day level and a broader scale (Grabillo, 2021). Unlike any other types of auditing in the business field who focuses more on a sole department of an entity or business, Operational Auditing does a lot more. It evaluates the process, structure, and procedures of the organization. There are five phases in the field of auditing: Selection, Planning, Execution, Reporting, and Follow-Up. Selection Phase is where the auditors conduct a risk assessment near the end of each calendar year. Planning Phase is where the team gathers relevant information that will help in conducting the audit for the client. Execution Phase is where the team executes the plan that they had. They assess observations, potential findings, and recommendation. Reporting Phase is easy to understand. It is a summary of audit result that they need to show or report to the client. And lastly, Follow up. Within one year of the report's release, Internal Audit follows up on all audit findings. One may ask what is the importance of all of these and the answer is simple. We follow these steps for us to be organized and not have any problem while doing our audit. Having a planned path in doing things will help the team for them not to have chaos in the process and the things that need to do won’t be all over the place. Given all the information above, I don’t think that following the audit phases will achieve a balanced and fair audit. It does make the work organized but it does not help the audit to be balanced and fair. In order of an audit to be balanced and fair, the auditors need to be unbiased. The auditors must have the independence of mind in performing the task for the audit to be balanced and fair.
ReplyDeleteCPA, W., October 02, 2021, Apps, S. G. linkF. T. P. E. O., September 11, 2014, comment, 1, more, R., April 28, 2013, comments, 66, & December 14, 2011. (n.d.). Operational audit: What are its phases? OPERATIONAL AUDIT: WHAT ARE ITS PHASES? Retrieved October 4, 2021, from https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html.
Operational audit overview: ☝️ definition, process, and purposes. QVALON. (n.d.). Retrieved October 4, 2021, from https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/.
Rodolfo S. Almonte IV 2019-101425
To Ashley P. Habon,
ReplyDeleteI like how you discuss the importance of following the audit in a short but concise manner and provide important points. Looking forward to reading more of your work. Great job!
To Me-an Joy A. Ompad,
I appreciate how you discussed the audit phases and explain why each of these phases are important. It is also easy to comprehend. I enjoy reading your work and am looking forward to reading more of your insights.
To Erica Ann R. Bataller,
I like how you start your work with the quotation, which I, also agree with. I sincerely appreciate how well you emphasized the significance of following the audit phases which gave me further knowledge and ideas. Keep up the great work!
MARVIE JAY N. SAYSON(2019-100731)
According from how Murdock (2017) define operational audit as “A future-oriented, systematic, and independent evaluation of organizational activities”, it shows that following audit phases is an imperative process of performing auditing duties. Based on my understanding, audit phases refer to the stages that an audit goes through to completely and accurately do an effective job of auditing a firm’s operational practices. The phases of auditing include the planning, execution, reporting and follow-up. The planning phase is where the most significant part of an audit takes place because it involves “scoping, budgeting, defining the population of interest, how testing will be performed, and announcing the audit” as mentioned in the book of Murdock. It is important in the planning phase to attentively consider and identify the possible related risks arising in the audit plan through conducting assessments and critical thinking before moving on to the next phase. An auditor should be able to communicate with people involve and should also be able to acquire both necessary papers and knowledge needed to be able to generate effective strategies and audit plan for the organization. The second phase, which is the fieldwork, where performing tests are set to determine if processes or programs, that are subject for review, works effectively to the objectives of the organization and also to check if the controls designed for the organization works as well. The reporting phase comes third in the audit phase and this is where results are often disseminated and discussed, including reports regarding “findings, observations, and best practices noted during the review, and developing recommendations for corrective action” – Murdock (2017). Lastly, the fourth phase, where follow-up on the application of the corrective actions is done. It is necessary that both the management and the auditors should inquire after corrective actions is performed to ensure that the issues addressed are solved and also to further prevent possible risks to occur right after implementing it.
ReplyDeleteA balance and fair audit can definitely be achieved by following the audit phases because these stages are connectively related to one another and to be able to get to the next phase, fulfillment of the first one should come first. If something has messed up and not addressed well right from the very first phase, the results and conclusions would go awry as well. Following the audit phases will give you better outlook of how the organization’s operational processes should be improved to help achieve the company’s goal and objective.
Reference
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. pp 3-58.
JANNA A. ERANDIO
2019-103533
CBET-01-501A
Audit phases are the procedures and processes by which auditors assess financial statements and identify errors in the present system so that a prompt solution can be implemented. As a result, they will have worked diligently and will be able to present a statement whose relevance can be proven and is accurate. These stages are as follows: planning, execution, reporting, and follow-up. These provide a straightforward, effective, and time-tested method for arranging, carrying out, and communicating results. The planning phase begins with obtaining authorizations and making the decision to undertake an audit and ends with the start of the audit itself. The execution phases are frequently referred to as fieldwork; this refers to the information gathering for audit and includes the entire period beginning with arrival at the audit destination. The reporting phase is one of the critical steps wherein the conclusion is communicated; it is during this phase that auditors meet with management in a timely manner to report the condition of the audit, findings, and prospective recommendations. The final phase is a follow-up, in which all suggestions and appropriate remedial plans are followed up on to ensure that activities are executed; the audit is only finalized when all scheduled activities have been completed throughout auditing. These phases assist the auditor in conducting an efficient audit and producing an objective review based on available data provided and their understanding of the business. It also aids in tracking efficiently, helping to ensure that there are no delays in operations and that they are carried out flawlessly with no system disclosures.
ReplyDeleteReferences:
Ramachandran, A. (2021, July 29). Audit Cycle. WallStreetMojo. Retrieved October 15, 2021, from https://www.wallstreetmojo.com/audit-cycle/?fbclid=IwAR1Lpn-KsVbiamHjnHs-0bq8rLe_3bdtanwsqwISr2dQ1nNmjClgGDLb-hk
Bhasin, H. (2020, April 13). What is Auditing? Four Phases Of The Audit Cycle. Marketing91. Retrieved October 15, 2021, from https://www.marketing91.com/what-is-auditing-definition/
SALVO, MARY ROSE E.
2019-102485
As defined by The Institute of Internal Auditors’ (IIA), operational audit is a systematic process of evaluating an organization’s effectiveness, efficiency and economy of operations. Just like traditional auditing, operational auditing also contains set of processes in different phases. Although audit process is different to each other, most of them are engaged with similar phases such as planning, fieldwork, audit report, and follow-up review. Because the audit process is systematic, it is critical that auditors adhere to its phases in order to perform their tasks and obligations properly and effectively. Consequently, operation auditors will be able to achieve their primary purpose of ensuring that a company operates smoothly, efficiently, and economically.
ReplyDeleteThe first and most significant phase of auditing is planning. This include setting of goals, tasks, and objectives that will help the auditor to identify the risks that the company may encounter. It is essential that auditors would be able to assess activities and other exposures that are most crucial and likely to harm the company, thus, they would be able to exert greater control over these matters as soon as possible in order to avoid potential repercussions. Additionally, in this phase, auditors do have a wide range of activities including requesting needed financial and operational reports and documents, identifying the systems in use, and defining the scope, objectives, work schedule, and budget for the engagement. Following the planning phase, the fieldwork or execution phase begins. This phase includes the majority of the testing, as well as interviews, documentation, applying testing methodologies, and providing progress reports. It includes two components: evaluating if the process or program under consideration is well-designed, with the underlying goals and objectives likely to be accomplished, and verifying whether the controls in place are performing as intended by management. Following that is the reporting phase, in which auditors must be able to present a summary of the audit findings, conclusions, and specific recommendations of corrective actions after planning and fieldwork has been completed. To accurately capture the important aspects of audit findings, this should be presented in a systematic, consistent, organized, and complete manner. It would be easy to disclose to the client and the appropriate level of administration any control failures, waste, inefficiency, or mismanagement within the organization. Last is the Follow-up phase, this is important as this verifies that the recommended corrective measures were executed promptly and the problems have been addressed as intended. To summarize, all of these phases are necessary for a balanced and fair audit. If all phases are completed, all auditing activities will be carried out with quality, as it follows the systematic procedures for conducting operational audits.
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC.
REMELYN SABANGAN 2019-101964
Auditing is a systematic, independent and documented procedure in obtaining audit evidences (such as records, statement of facts and other information relevant and verifiable) applied to an organization or with a function specific to a department ensuring compliance to all the requirements (IS0 19011:2018). It involves an examination of the organization’s documents and financial statements (Financial Auditing), operational policies and risks involved (Operational Auditing) and follow-up of a complete corrective area. As systematic, auditing comprises of the four major phases namely: Audit Planning and Preparation, Audit Execution (Fieldwork Phase), Audit Reporting and Audit Follow-up and Closure (Feedback Phase).
ReplyDelete(1.) Audit Planning and Preparation dwells with the decision to conduct an audit and answers the how and when it will be conducted. It primarily consists of planning everything prepared in advanced by the involved parties including the auditors and the audit-program manager. (2.) Audit Execution (primarily knows as the Fieldwork Phase) deals with relevant data to arrive at a significant and sound decision based on audit findings. (3.) Audit Reporting which involves the presentation and communication of the audit findings thereof providing significant data which could help the management in addressing its current organizational issues. (4.) Audit Follow-up and Closure (Feedback Phase) which allows the clients to give follow-up about the audit findings that will form part of the subsequent audits. It is necessary to note that an audit will be viewed as complete only when all the planned audit activities were carried out or it was agreed by the audit clients.
An audit when prepared accordingly could have a profound benefit to the organization. It is crucial to abide with the correct audit phases as it helps to prevent irrelevant costs resulting from the failure to abide with the audit phases mentioned above (Courtnell, 2020). It could also help alleviate the risk of potential major financial loss in the management and enhancing the organization’s services. It aids to ensure that the audit is prepared and presented fairly thereby increasing the latter’s reputation (Davis, 2021). Lastly, following the audit phases helps in achieving an efficient auditing of a process or a business as a whole. The auditor has to follow in order to arrive at an unbiased report on the basis of the evidences furnished and the understanding of the business (Ramachandran and Vaidya, n.d)
REFERENCES:
Mawby, William (2021). The ASQ Auditing Handbook. ASQ Quality Press. Retrieved 13 October 2021 01:30 pm from https://asq.org/quality-resources/auditing
Courtnell, Jane (2020) Audit Process: 5 Expert Steps for You to get Your Audit right. Retrieved 13 October 2021 04:42 pm from https://www.process.st/audit-process/
Ramachandran, Abhilash and Vaidya, Dheeraj (n. d). “What is the Audit Cycle?”. Retrieved 13 October 2021 04:45 pm from https://www.wallstreetmojo.com/audit-cycle/
Davis, Ben (2021). “Why is it important to follow the step by step procedure?”. Retrieved 13 October 2021 04:47 pm from https://www.mvorganizing.org/why-is-it-important-to-follow-the-step-by-stepprocedure/
PIOLIN, RICKA MAE B.
2019-101805
To Genelyn Aloroy
ReplyDeleteHello, Gen! Your work is very detailed and well-organized, proving that you truly understand the subject and set aside time to conduct research on it. I'd also like to commend you on your excellent choice of words and how you introduced all of the data you gathered.
To Bienice Desiree Barrometro
Hello, Bien! I like how you explain your point of view on this subject; it gives me more knowledge.
To Bernard Dusayen
Hello, Bernard! Your work is both outstanding and enlightening. You have provided excellent explanations for the questions, and I would like to applaud you on your writing skills, which are clear and fluent.
SALVO, MARY ROSE E.
2019-102485
Following such phases in auditing is important because with the help of having a systematic process and detailed audit it can lead to a balanced and fair audit. In addition, the importance of following the different auditing phases is that it can pinpoint such as risks, weaknesses, and it can improve the business efficiency that can lead to the maximization the productivity of an organization. Moreover, the audit process has five phases and those five phases according to Grabillo, M. A. (2021) are Selection, Planning, Execution, Reporting and Follow Up Phase that as per my perspective is needed in order to achieve a balanced and fair audit because every phase has their contribution and if one of those phases is unable to be conducted the result might be altered and the balanced and fair audit might not be achieved. On the other hand, conducting such auditing has its own upside and downside but it doesn’t hinder the end goal of an organization and that is to have a fair and balanced audit that can help them achieve their goals. One of the advantages of conducting such operational audit is that they can obtain an objective and realistic result and opinion that can help them save money in the long run which is a great investment and great positive result over time. And the downside of conducting such audit is that it is costly, and some organizations can’t afford it. Also, it requires a long period of time to complete since it is a comprehensive analysis.
ReplyDeleteReferences:
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. pp 33.
Hi, Helen Grace Garcia! I like how you made a short preview of what auditing is before tackling it's phases, by doing so, I can clearly see that this discussion of yours are well thought of. Looking forward for your next works!
ReplyDelete- SANGOL, LEAREIN J. ( 2019-106977 )
Hi, Jake Dizon! Your work is detailed and concise. I like how you highlighted auditing phases importance for all affected stakeholders. I commend you for this informative output!
- SANGOL, LEAREIN J. ( 2019-106977 )
Hi, Chencel Annmae Almodiel! You explained well the importance of auditing phases. The completion of your work did offer me a new insights about the said topic. Keep up the great work!
- SANGOL, LEAREIN J. ( 2019-106977 )
Audit phases are designed to ensure that auditors carry out the audit process correctly. The company will acquire more proven results by following this phase. To adequately conduct these audit phases, internal auditors must apply a risk-based strategy, a broad skill set, and knowledge of their business. This gives a straightforward and effective way to organize, perform, and present the results of the work done. We will understand the significance of following it once we understand the significance of each phase, which begins with planning. This includes risk assessments, which aid in the identification of opportunities and the determination of the organization's readiness (Murdock, 2017). This strategy will serve as the framework for the audit process, it aids in the identification of priorities and the definition of how the organization's limited resources should be allocated. Fieldwork phase on the other hand includes interviewing, documenting, applying testing methodologies, managing fieldwork, and delivering status reports, and it is where the majority of the testing is done (Murdock, 2017). After management has completed the planning phase, all processes must be tested and documented. This is when auditors gather evidence to back up their findings and persuade others whether or not conditions are satisfactory. Workpapers, flowcharts, internal control questions, observation, and other tools are used in this phase to verify the accuracy and completeness of the work done and to confirm that the data is correct. These are the processes used by auditors to establish whether or not the control is working and effectively managed. The reporting phase follows the line, and it comprises sharing the review's findings, observations, and best practices, as well as providing suggestions for corrective action (Murdock, 2017). This is where you'll find follow-up and metrics to ensure that corrective steps are being taken. This step-by-step approach enables management to achieve its goal, control operational risks, document all observations, and communicate findings to validate all activities. Each process has a level of importance, as I mentioned, and because there will be a greater understanding of the process, errors or fraud may be mitigated, a balanced and fair audit will be achieved. It gives the auditor a way to spot flaws and make recommendations for design changes or review procedures to help limit the risks. This will also provide an auditor with conclusions from the activities taken that will be useful in the following audit cycle.
ReplyDeleteReference:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC.
Alcantara, Shiela Mae D. - 2019-103506
"An audit can be an unpleasant surprise, or it can be a welcome opportunity to get your organization's affairs in order." according to Buleen (2019). Things have done impact the success of the outcomes. You can design your path to win if you focus on the correct procedures in the right way.
ReplyDeleteIn an audit process, there are five-phase procedure comprises Selection, Planning, Execution, Reporting, and Follow-Up. According to Courtnell (2020), the selection is "a risk assessment is carried out to develop an audit plan. This stage may require the auditors to look through relevant business documents and previous audit results." According to Wandering CPA (2021), the second step is the planning phase "the Internal Audit staff gather relevant background information and initiate contact with the client.". After the audit is planned, the fieldwork is not executed by the Internal Audit staff. The next phase is reporting; the audit results and the conclusions and particular suggestions are summarized. This summary is then sent and communicated to the client in the form of a report draft. Lastly, in the follow-up phase, according to Wandering CPA (2021), "Internal Audit follows up on all audit findings within one year of when the report was issued.".
According to Baird (2017), a process is "a series of steps and decisions involved in the way work is completed." Like an audit process, it is a series of actions that needs to work together and sequentially to produce the desired outcome. According to Courtnell (2020), "failure to abide by an audit process results in costly and devastating consequences." Like what happened in the United States in 2008, financial audit neglect caused a financial crisis. That is why it is vital to follow the correct process to prevent it and achieve a balanced and fair audit.
References:
Courtnell, J. (2020, February 20). Audit Process: 5 Expert Steps for You to Get Your Audit Right | Process Street | Checklist, Workflow and SOP Software. Accessed October 15, 2021, from https://www.process.st/audit-process/
Wandering CPA. (2021, October 2). OPERATIONAL AUDIT: WHAT ARE ITS PHASES? Accessed October 15, 2021, from https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Baird, S. (2017, March 14). What is a Process? •. Accessed October 15, 2021, from https://www.processmodel.com/blog/what-is-a-process/
Buleen, C. (2019, February 4). Phases of the Audit Process. Accessed October 15, 2021, from https://smallbusiness.chron.com/phases-audit-process-15260.html
MARANAN, PATRISHA C., 2019-100624
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
ReplyDeleteOperational auditing is the process of examining the organization’s governance, risk, control systems, and policies holistically (that is primarily non-financial information) whereas regular auditing is the process of examining your company's financial records, accounting books to ensure their accuracy. Regular audits are critical to improving business performance in all industries and can aid in the achievement of many other objectives that a specific organization may have in mind.
Operational auditing has four phases or steps that must be guided as it progresses. By following this, we can achieve a balanced and fair audit in the organization. The four steps assist the organization in managing risk, running smoothly, making the best decisions, and effectively executing their plan. For example, in reporting phase, it reduces the chances of fraud because top management cannot be responsible for everything, and many times top management is not competent enough to look into minute details of accounts. But with the help of internal auditors, they will be to quickly identify where the gaps are in the company’s accounts and policies. In the phases, internal auditors are on regular basis to continuously review the company’s records to ensures that the accounting staff keeps the records up to date and is always proactive. At its most basic, according to The Institute of Internal Auditors “At its simplest, internal audit identifies the risks that could keep an organization from achieving its goals, alerts leaders to these risks, and proactively recommends improvements to help reduce the risks.”
H. Bhasin (2020). What is Auditing? Phases of the Audit Cycle. Retrieved October 7, 2021, from https://www.marketing91.com/what-is-auditing-definition/
The Institute of Internal Auditors (2019). Internal Audit vs. External Audit: What’s the Difference?. Retrieved October 7, 2021, from https://quantivate.com/blog/internal-external-audit-comparison/
ARONCE, MARY ANGELOU N. 2019-105627
To: Mary Rose Salvo
ReplyDeleteHi Mary! I commend your work for being organize and informative. Continue writing wide range of ideas about certain topic. Impressive work!
To: John Paul Savilla
Hi Paul! I like how you define the word "phase" first before broadening your idea about the phases of auditing. The thoughts were arranged accordingly and informative. Good job!
To: Rhea Mae Yuga
Hi Rhea! I commend your work for properly explaining the importance and aim of every phase. Your work is enlightening as it highlights essential details needed. Thank you for sharing your ideas. Well done!
To: Janna A. Erandio
ReplyDeleteI like how you discuss the phases of auditing. I agree with you that following the phases everything can help achieve the company's goal and objectives. Keep up the good work!
To: Sheila Mae Alcantara
Excellent work! I love the flow of your discussion very clear and easy to understand. Looking forward to read your other work.
To: Kianna Erika D. Zarain
Great work. I like how you emphasize planning phase in your discussion but it would be better if you use the APA 7th edition in your citation. Keep up the good work!
--Velasco, Mely Jane (2019-103477)
Hi, Helen Garcia! I like how you go over to each phases of the audit process in detail first before wrapping up all the main points at the latter part of your sentence without relying solely on the information you've gathered from the internet. Good job!
ReplyDelete-ALMODIEL, CHENCEL-ANNMAE F. (2019-105222)
Hi, Jake Dizon! Praiseworthy, as always. Your work is well written and the thought is very organized. I don't have much to say about your work, I'm out of words (...like literally, jk!) Btw, keep up the good work!
-ALMODIEL, CHENCEL-ANNMAE F. (2019-105222)
Hi, Lea Sangol! Your introduction really did caught my attention. I like how you begin your sentence with the definition of audit process and explain its phases afterwards. It is clear and easy to comprehend. I can't wait to read more of your works soon!
-ALMODIEL, CHENCEL-ANNMAE F. (2019-105222)
The purpose of conducting an operational audit to optimize efficiency and an auditor is to provide reasonable assurance regarding the evaluation of the effectiveness of the internal policies and procedures of the company. For an audit to be considered a success it followed the “audit phases”. The importance of following audit phases was being able to define the type of audit to be performed and for the audit team to observe independence and objectivity in the manner in which they are supposed to go around when conducting the audit itself. An auditor must be competent and knowledgeable about his client’s management, regulatory, and standard changes. This includes in the initial phase also it is where critical and longest preparation. It involves reviewing the past audit, understanding the business to set the preliminary risk assessment helps identify potential risk exposure and the inherent risk that needs to be addressed, as well as any areas of concern or industry-specific issues. Determining the nature, timing and extent of audit hence auditing require a relatively long period of time to complete since it is an analysis and detailed examination of the company's operations with which to detect productive improvements. Also set forths to make an overall audit strategy, audit plan, and audit program which is vital in gathering evidence. In completing the audit, the objective is to assess the auditor in assessing whether the conclusion reached is consistent with the evidence gathered. Conclusions are reviewed and the overall opinion is formed. Communication of results and developing recommendations for corrective action are presented and discussed with the client.
ReplyDeleteFollowing the audit phases help the auditor gather appropriate data and execute the audit process extensively achieving a balanced and fair audit. Audits are a necessity for many organizations, they provide unbiased judgment and assessments of company records, processes, and procedures.
References:
Accountants Go Cardless (n.d.). What is an operational audit? Accessed October 11,
2021. https://gocardless.com/en-us/guides/posts/what-is-an-operational-audit/
Jeann. (2021, September 11). Auditing: OBJECTIVES & PHASES OF OPERATIONAL AUDITS 09112021 by MJBC. Youtube. Retrieved October 11, 2021, from https://www.youtube.com/watch?v=7aUabD77FvI&t=539s
There are several phases in performing an audit. Although every audit is unique, the most common included in the auditing process are the following: planning, fieldwork, reporting and follow-up review. According to Murdock (2017), the planning phase includes scoping, budgeting, defining the population of interest, how testing will be performed, and announcing audit. In planning, the auditor in charge must perform a number of tasks including communicating with the corresponding process about the timing of the review, requesting needed financial operational reports and documents, coordinating staff availability, identifying the systems in use, defining scope, objectives, work schedule, and budget for the engagement. The next phase in the engagement’s life cycle is fieldwork. This phase is when most of the testing is performed and it includes interviewing, documenting, applying testing methodologies, managing fieldwork and providing status updates. The third phase of the audit is the communication of results, often referred to as reporting. It consists of communicating findings, observations, and best practices noted during the review, and developing recommendations for corrective action. And the last phase is follow-up review whereas the auditor is checking to make sure the corrective action was performed, so it consists of checking what management did to address the issue reported. Success for internal auditors consists of confirming, upon performing a follow-up review that the issue has disappeared. While this positive outcome cannot be guaranteed, it is the goal that all auditors should pursue as it demonstrates that internal audit not only identified a problem, but also identified the root cause of the problem, and the agreed upon corrective action corrected the deficiency.
ReplyDeleteFollowing these phases are important because they are co-related with each other. An auditor cannot finish performing a complete audit with just an audit plan and no execution of it, the same goes for other phases. This is the auditing process, every phase indicates what is needed to be done in a specific scope of time and provides focus on small areas that results in an in-depth evaluation with gradual improvements as the process goes on. Doing these phases accordingly while also applying professional skepticism, independence, assurance and objectivity can help achieve the audit’s goal. The way these phases are done determines how successful the outcomes will be. If the auditing team focus on the right processes, in the right way, it will lead to a balanced and fair audit.
References:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. https://ertu.online/pluginfile.php/286094/mod_resource/content/1/
Operational%20Auditing%20The%20Principles %20%20Techniques%20for%20a%20Changing%20World.pdf
- MORENO, GLORENE MAE R. 2019-105014
To: Marvie Jay N. Sayson (2019-100731)
ReplyDeleteI like how you explained the importance of following audit phases concisely and the way you emphasized its effect in communication within the organization. I agree in your words that following the audit phases can achieve balance and fair audit as there will be a thorough assessment, ensuring that the audit is properly done without the influence of others and is supported with data to produce the management a reliable report that would help them understand and address the issue. Your discussion is nicely done!
- MORENO, GLORENE MAE R. (2019-105014)
To: Catherine Buling (2019-103626)
Excellent. Your discussion is direct to the point, very informative and well-explained. I must also commend you for following proper citation using the APA format.
- MORENO, GLORENE MAE R. (2019-105014)
To: Angelika D. Francia (2019-101440)
Hi! I like how you started with discussing the audit phases first followed by a precise answer regarding the importance of following these phases and how it can help achieve balanced and fair audit. I also commend you for following proper citation using the APA format.
- MORENO, GLORENE MAE R. (2019-105014)
In this week’s discussion forum, I will be tackling about the importance of each auditing phases. Internal Audit conducts assurance through this process. The five phases of Audit are Selecting, Planning, Executing, Reporting and a follow-up. It is important because it describes how the works related to audit are being done and it also gives them a focal point for improvement, and how they're done decides how successful the results will be. You can design your path to success if you focus on the right procedures in the right way. These phrases will bring consistency on your work and the organization will gain numerous benefits from identifying and improving their phases as well. Identifying processes allows a business to visualize a range of tasks from start to finish, assisting employees in determining which steps are required and who requires what along the way. With this, let me cite why each phases is important in auditing field.
ReplyDeleteSelecting phase will help you in the planning phase. It would be easy to see the how’s and why’s if you were able to identify your strategies and what you need to do. Whereas, planning phase provides Internal Auditors with the data they need to make informed decisions about how to allocate resources so that the organization may achieve its goals. Executing those strategies is the critical phase where you need to do what you’ve planned. This is where you will know if the strategies you’ve planned so far works effectively and in the reporting phase is where you will need to submit the outcome to the upper department from the selection phase up until the execution phase. The follow up is also important as it will help you decide if you will continue to use this approach or not.
I believe it can achieve a balance and fair Audit because it undergoes a proper process. With these phases, all information needed will be written and discussed here with transparency.
Reference:
The Audit Process. (2014, April 9). Internal Audit. https://internalaudit.ku.edu/project-process
ERIKA Y. MAGTIBAY (2019-105480)
The audit phases are a series of steps to follow that bring stability and structure to an organization. It acts as a guide for the auditor to have a strong foundation when doing an audit examination. The first would be planning because this would be the basis for formulating the examination's objectives and range. They would prepare by reviewing the previous audit work, unit budgets, and more. It would be unquestionably the most essential part of the whole process. If this is not well done, the result would be nothing but failure. Fieldwork, the second phase, is an extensive part because the test mostly happens here. There will be data gathering and operation assessment to see if it is efficiently working as told by the auditee. The auditor now understands how things work within the organization and can identify the strengths and weaknesses. The third step would be reporting, where the full test results from the fieldwork will be presented. A discussion would happen as to the organization's plans as responding to the suggestions for developments. After that, the final summary report would be delivered to the senior management and audit committee to wrap it up. The last part of the phase would be the follow-up. This would be to assure that every suggestion that has been implemented was working as it should be. In a situation where it did not achieve the goal, there would be a follow-up report to discuss the adjustments that would take place. The audit phases would greatly help the organization identify what could be enhanced more, what needs to be removed, and other development to be more efficient and effective.
ReplyDeleteAn auditor would not let others influence their decisions and have strict discipline in following the already set phases. They also gives a full report regarding what they did, found, and observed; there would be documentation of that in every step. Audit phases would definitely achieve a balanced and fair audit with a handful of shreds of evidence that certainly backs it up.
Audit process: Internal audit. Chicago State University. (n.d.). Retrieved October 15, 2021, from https://www.csu.edu/internalaudit/auditprocess.htm.
ISIP, IRIS G. (2019-103614)
We go through our everyday lives by contemplating on our plans, whether short-term or long-term. We ponder on the steps that we need to take, while considering possible hurdles and outcomes. Processes have a key role to how we perform our daily activities. For instance, a basic example of a process is our education system. It is a fact that we do start our schooling as kindergarteners, and not as college students. Point taken, process plays a vital role in our success. It represents the idea of how things are done, by which would govern our way to success. The same concept applies to auditing. Auditing is a process that contributes to the overall effectiveness of a business operation. It shall start to planning ahead, and setting down goals and risk assessments. When all necessary information is laid down, the next step shall be determining if the entity is executing proper actions in order to synchronize with desired goals; which would then lead to the communication of the results of carried out actions. Auditors are then responsible for evaluating the overall process, verifying the effectiveness, and whether the corrective actions are well-performed and functional. The essence of following audit phases is that, if auditors were to act hastily, decide impulsively, the entity would suffer tremendously. In addition, if phases are properly performed, it would be easier for an auditor to track the steps taken, if somehow the program has miserably failed. Having said that, I believe that going along with the phases would give rise to a balanced and fair audit, if only the processes itself are fair and justified; to sum it up, auditors, at all times, shall exercise their integrity, skipping no phase, and remain fair-minded in order to fully achieve a balanced and fair audit.
ReplyDeletePOBLACION, KIRSTEN GAVEN R. (2019-104425)
In all aspects, phases or stages are significant. We can ensure that the tasks performed after each phase satisfy their goal. It will serve as a roadmap for achieving the objective. Concerning auditing, that objective is to evaluate an organization's operations, systems, and procedures and be in line with it to enhance efficiency. Hernan Murdock mentioned four critical phases in auditing: Planning, Fieldwork, Reporting, and Follow-Up. All these phases contribute to the sustainability of the company. Let us assume that we are the internal auditor of a well-known and prosperous company. Our duty is crucial to maintain the organization's success and achieve a balanced and fair audit. The question is, how can we achieve it?
ReplyDeleteOne of our responsibilities is detecting weak spots and operating more effectively by inspecting its internal policies and procedures. A balanced and fair audit is possible through audit phases. The audit phase consists of many steps that the auditor must accomplish to be accurate and without tampering. The process can be easily tracked throughout the phases, ensuring that no tasks are neglected and the audit is accomplished on time. By showing each function, the relevance of each phase can be shown. Without the need for a question, the essential part of an audit is planning. Scope, budgeting, identifying the demographic of interest, how testing is done, and publicizing the audit are all part of the first step. Also, According to Murdock, If we do not plan, we are preparing to fail. Fieldwork is the next step in the engagement's progress. This phase comprises interviewing, documenting, applying testing techniques, coordinating fieldwork, and delivering status reports, where the majority of the testing is completed. The audit's third phase is the disclosure of results, often known as reporting. It includes conveying the review's findings, insights, and best practices and generating suggestions for remedial action. After reporting findings, both management and auditors' responsibility is to ensure that corrective steps are taken, and problems are resolved as planned. A follow-up review indicates that the auditor is reviewing to ensure that the remedial action was taken. Thus it consists of checking what management did to resolve the issue highlighted. To conclude, all the phases have different functions, purposes, and importance that bring success.
Reference:
Grabillo, M.A. (2021). Operational Audit: What are its Phases? Retrieved October 14, 2021. from.https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html?m=1
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Retrieved October 14, 2021. from. Taylor and Francis Group, LLC. pp. 36-
Mindtools. (n.d.). Project Management Phases and Processes. Retrieved October 14, 2021, from. https://www.mindtools.com/pages/article/newPPM_63.htm#:~:text=Phases%2C%20or%20stages%2C%20are%20very,prepared%20for%20the%20next%20phase.
MANABAT, GHENALYN A. (2019-103679)
To POBLACION, KIRSTEN GAVEN R. (2019-104425)
ReplyDeleteI love how you are able to explain the audit phases in simple terms but definitely on point. I also want to add how fascinating your introduction to the topic is. Keep up the good work!
To ANTHONY C MANGILOG (2019-104415)
You were able expound the topic well; I was able to grasp the idea more after reading your work. Looking forward on reading more of your great works!
MANABAT, GHENALYN A. (2019-103679)
Your work was so precise that I was able to have a deeper understanding of the topic being discussed. Thank you for your hard work!
RE: Isip, Iris (2019-103614)
ReplyDeleteHello, Iris! You did a great job in explaining the phases of auditing! I somehow imagined the process itself, as if I am watching it be done before my eyes. This has helped me comprehend the importance of all the phases, and how it brings out the best in both the entity and the auditor.
RE: Mangilog, Anthony C. (2019-104415)
Hello, Anthony! After reading your work, I was amazed by how detailed it was! You did a great job explaining the phases of auditing, and it was well-written! This has surely helped me!
RE: Manabat, Ghenalyn (2019-103679)
Hello, Ghenalyn! I would like to say that I loved that you included the statement of Murdock saying, "If we do not plan, we are preparing to fail." That represents the whole idea of your work! Keep up the good work!
From: Poblacion, Kirsten Gaven R. (2019-104425)
Companies must do auditing because it is an integral part of their compliance to the required regulations. The main purpose of auditing is to help the company gain the trust of the market. An auditor's job is to ensure that the company is free and fair from all types of frauds and that there are no material misstatements in the financial statements. Users of financial statements can rely on the audit statements that the auditor presented if he able to carry out his tasks in a responsible manner. In order to achieve the desired level of performance in auditing, an auditor must have an audit-phase process.
ReplyDeleteThere are four operational audit phases. These are: (1) Planning Phase; (2) Fieldwork Phase; (3) Reporting Phase; and (4) Follow-Up Phase. Following these phases of operational auditing is important in achieving a balanced and fair audit. The operational audit phases are designed in order to have a process or a flow about how the overall audit is going to be executed. It is important that an auditor should follow audit phase because it presents a trajectory of the key components and indicators that need to be done and addressed during the course of the audit.
These audit phases are set in chronological order. It starts from planning, gathering of relevant background informations, identifying risks, objectives, the scope of the audit, the timing of fieldwork and the report distribution. Client company is also kept informed of the audit processes, about the audit observations, potential findings, and recommendations that allow them to respond to the report and submit an action plan and time frame (Internal Audit KU, n.d.). Lastly, there is also follow up phase for all audit findings within one year of when the report was issued (Internal Audit KU, n.d.).
The aforementioned audit-phase processes give us assurance that the audit will be done in a professional, comprehensive and systematic way. We are assured that no components will be missed out upon. We are assured that an auditor will perform with integrity, objectivity, fair presentation, confidentiality, evidence-based, and due professional care. The audit phases help the auditor provide a balanced and fair audit for the client company and for the users of financial statements.
References:
Internal Audit KU. (n.d.) The Audit Process. Retrieved October 9, 2021 from https://internalaudit.ku.edu/project-process
—KRYSTAL VIEN T. LADAO (2019-106903)
Auditing is the process of examining or verifying an organization’s financial statements to ensure these are in conformity with particular standards, rules, and policies through the financial records of the firm itself. Operational audit is defined by Wiki Accounting as the type of audit service that its review is mainly focused on the key processes, procedures, and systems. Operational auditing is comprehensive as it includes the whole operation of the organization, therefore, it cannot be done in just a short period of time and with just financial statements itself, this requires more time and effort to achieve efficiency and effectiveness as the main goal of this type of auditing.
ReplyDeleteAs the definition states, it examines processes and systems, might as well have its own processor as these are called audit phases. Audit phases serve as the accounting process auditors must follow in order to perform the audit thoroughly, this follows the sequence of planning, fieldwork, reporting, and follow-up. These phases are the obviously step-by-step procedures to arrive at an audit as accurately as possible, hence, every phase is as vital as the others wherein each one must be able to be accomplished as they are correlated with each other. Every phase has its own list of objectives that must be carried out as it serves various essential purposes for the audit to be successful. Taking everything into consideration, this won’t lead to an effective audit alone, I could say that this will form a huge part, however, with the independence and objectivity of the auditor, a balanced and fair audit will be achieved. Therefore, it is important for operational auditors to follow these phases as they serve as their guides in reaching their full productivity that will result in maintaining efficient, effective, and management-directed operations.
Reference:
Murdock, H.
(2016). Operational auditing: Principles and techniques for a changing world. Operational Auditing The Principles Techniques for a Changing World.pdf (e-rtu.online)
CHAVEZ, CATHERINE H. (2019-101209)
“Recounting what happens when audit processes are neglected brings an emphasis on why audit processes are needed”. To follow a set audit process means to conduct an audit properly. An audit determines whether an organization is providing a true and fair view of its financial performance and position, which on its own is something that any organization wants to achieve. An organization undergoes an audit of its information systems to validate that they are operating in a manner that is secure and compliant to ensure that the business is operating effectively and efficiently.
ReplyDeleteInternal audit conducts assurance audits through a five-phase process. The selection, planning, execution, reporting, and the follow-up phase are the fundamental backbone of the audit process. In the selection phase, a risk assessment is carried out to develop an audit plan. This stage may require the auditors to look through relevant business documents and previous audit results. After that, in the planning phase, the auditor needs to obtain an understanding of the business as well as its operation. Then, they need to make an assessment and target which key operation should they perform. In the execution phase, validating the key control and operation involve obtaining the key documents, observing how certain key control is performing and inspecting certain documents like sales invoices, goods delivery note. Once the key operation and control are validated, the report needs to be prepared and submit to the audit committee. In the follow-up phase, same as other internal audits, any key findings, and recommendations that prepare by the auditor need to follow up whether those key findings are mitigated by related management or department. It is important for the auditor to follow these steps to achieve company’s goals and objectives. Having a set audit process, means to standardize operations. And following a standardized audit process will effectively communicate audit expectations, maintain consistent audit quality and identify what went wrong if something goes wrong. Also, through following these audit phases, rest assured that the auditor can achieve a balanced and fair audit and also safeguards against audit error. Audits are important, and Following the correct audit process is vital.
Reference:
Courtnell, J. (2020). Audit Process: 5 Expert Steps for You to Get Your Audit Right
Process Street | Checklist, Workflow and SOP Software. Process Street. https://www.process.st/audit-process/
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC.
Sinra, K. Operational audit: Definition, Types, Processes, Example, and Reporting
Retrieved October 15, 2021, from https://www.wikiaccounting.com/operational-audit/
TICALA, JOYLYN L., 2019-103552
Thea Sofia A. Barabicho
ReplyDeleteCBET-01-502A
RE: Chavez, Catherine H.
Hello, Catherine! You explained the meaning of operational auditing and auditing itself clearly. You also discussed the importance of the phases alone, but it does not independently lead to an effective auditing. Thus, needing the independence and objectivity of the auditor.
RE: Lopez, Fritz Reizen V.
Hi, Fritz! I liked how you explained the correlation of the different phases as the whole process cannot function effectively if one phase is skipped.
RE: Griarte, Lovely Rose B.
Hi, Lovely! You compared the phases to the life cycle of a butterfly for an easier illustration. It is true that the processes are the prerequisites of the other. I liked how you made its importance and relevance easy to understand.
Regular audits are key to improving business performance in all industries and can facilitate the achievement of many other goals that a particular organization may have in their sights (Bywater, n.d.). Considering the following phases in auditing means that there is business assurance in free-fraudulent proceedings and that operations are carried out efficiently. Third-party risks are greatly heightened at all levels when any person, organization, or business does not follow audit phases. So that the insights of an auditor surely are needed in identifying risks to develop the audit plan. Each stage is cognate to one another. There is transparency in both parties' perspectives since, in every phase, there’s an interaction between the client and the auditor. Auditor discussed to the clients the audit observations, potential findings, as well as recommendations with the client as they are identified, and clients on the other hand, have the opportunity to respond to the report (Wandering CPA, 2021). In conclusion, operational auditing is defined as “A future-oriented, systematic, and independent evaluation of organizational activities (Murdock, 2017). To apply the aforementioned definition, there must be a set of audit phases that are vigilantly followed to achieve the effectiveness and efficiency of the company's operations, as well as a balanced and fair audit.
ReplyDeleteReferences:
Bywater. (n.d.). Why are Audits so Important. Onrec | The Online Recruitment Resource.
https://www.onrec.com/sites/onrec/directory/files/Bywater%20Infograph%20%281%29.pdf
Wandering CPA. (2021). Operational audit: What are its phases? GLIMPSE OF A CPA'S MIND. https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html?m=1
Murdock, H. (2017). Operational auditing: Principles and techniques for a changing world. CRC Press.
-ARABIT, PRINCESS MAE D. (2019-103719)
As stated by Gartland (2017), “The real benefit of audit planning is gained from the process itself”. Procedures are essential in any organization. It is set to ensure that the steps and methodologies comply with the laws and regulations, and are in line with the standards established by the company to achieve its goals. Phases serve as guidelines toward a smooth and structured operation keeping it from evolving into complete chaos, free from mistakes and discrepancies (PowerDMS, 2020). They help maintain efficiency and reduce professional liability risks. With them, it is easier to trace back steps to identify where things went wrong (Qvalon, 2021). As a result, concerned parties can measure the feasibility of further changes and modifications (Chigaco State University, nd.)
ReplyDeleteAccording to The University of Kansas (nd.), there are five phases of operational audit: (a) selection, (b) planning, (c) execution, (d) reporting, and (e) follow-up. The selection phase begins with a wide risk assessment. Background information is then compiled and reviewed in the planning phase to identify the troubled spots within the organization. When objectives, scope, timing, and report distribution have been determined, the internal auditor shall begin executing the audit process. Any findings, conclusions, and recommendations are communicated to the clients. Afterward, follow-ups are done to see how things have changed throughout the year.
Each phase of operational audit involves communication and assessments fueled by data and evidence. It requires a collaborative effort (Chicago State University, nd.). Although the clients provide management information upfront, the system ensures that all data provided are factual--measured through independent and objective evaluations performed by the auditor during the execution phase. Hence, the main fieldwork is executed only by the internal audit staff so a fair and balanced audit is achieved.
References:
Chicago State University (nd). Audit process. Retrieved from https://www.csu.edu/internalaudit/auditprocess.htm
Gartland (2017). The importance of audit planning. Retrieved from https://www.journalofaccountancy.com/issues/2017/sep/importance-of-audit-planning.html
PowerDMS (2020). Following policies and procedures, and why it’s important. Retrieved from https://www.powerdms.com/policy-learning-center/following-policies-and-procedures-and-why-its-important#:~:text=Together%2C%20policies%20and%20procedures%20provide,making%2C%20and%20streamline%20internal%20processes.&text=Following%20policies%20and%20procedures%20is,your%20organization%20as%20a%20whole.
Qvalon (2021). Operational audit overview: Definition, process, and purposes. Retrieved from https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
The University of Kansas (nd.). The audit process. Retrieved from https://internalaudit.ku.edu/project-process
- PARAGAS, DANIELA T. (2019-104925)
An audit is an independent examination of the accounting and financial statements to determine if they obey the law and the generally accepted accounting principles (GAAP) (AccountingEdu.org (June 21, 2021)). And to have a good quality of audit, the auditor should follow the auditing phases. What are the auditing phases? Why is it important to follow these phases? Will this give the auditor a balanced and fair audit?
ReplyDeleteThe auditing process is composing of 4 phases such as; planning, fieldwork, reporting, and follow-up (The University of Kansas (n.d.)). This process helps the auditor to determine whether organization processes are working within the established limits. It also measures the performance and the effectiveness of the operations. They are important because they describe how things are done and it provides a focus for making them better and how they are done determines how successful the outcomes will be (Alan (Jan 2013). Following these phases is important to every auditor because this will help them to make quality reports. And also this will help the auditor to have a balanced and fair audit because those phases were created to ensure the quality of the reports and the effectiveness and efficiency of the operations.
To sum up, auditing is an objective examination and evaluation of the financial statements that is composed of auditing phases to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent.
AccountingEdu.org (modified on June 21, 2021) Accounting vs. Auditing https://www.accountingedu.org/accounting-vs-auditing/
The University of Kansas (n.d.) The Audit Process https://internalaudit.ku.edu/project-process
Alan (Jan 2013) Why are processes important? http://www.agiledge.com/process/why-are-processes-important
--- Marinel S. Nudo (2019-106335)
According to the Institute of Internal Auditing, internal auditing helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. In connection with that, Grabillo (2021) said that Operational auditing follows a cycle that typically includes five phases, including selection, planning, execution, reporting, and follow-up. The process of these five phases starts in the selection phase, where auditors use a risk-based approach to examine the potential risks that may occur or be faced by the firm that will hinder the auditor's ability to achieve its objectives. Next, the planning phase determines the overall audit strategy which involves the collection of relevant information from clients and determining whether or not it is useful to the company's financial statements, internal control, and how it will influence the auditor during an audit. Once the audit is planned, fieldwork will be performed based on the steps identified in the planning process. In this phase, the plan will be put into action, which often includes conducting interviews and surveys to review the policies and procedures as well as analyzing specific data and transactions. After that, auditors discuss their recommendations to the clients based on their findings and observations during the reporting phase. The clients can respond to the report, which is also a vital part of the final report. And lastly, when the final report is issued, internal auditors, as well as the management, can do follow-ups within one year for the improvements and corrective actions.
ReplyDeleteFollowing these phases will enable auditors to provide a balanced and fair audit since they will assure the business that their findings and recommendations go through substantive procedures and the audit is completed through planned activities. Each of these phases will help achieve the goal of getting assurance that the financial report is free of significant misrepresentation and material errors.
References:
Grabillo, M.A (2021). Operational Audit: What are its phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World.
The Office of Internal Audit. Audit Process https://internalaudit.uoregon.edu/report/audit-process
In everything we do, there is always a process that needs to be follow. A process is defined as a series of actions which are carried out in order to achieve a particular result. The operational auditing has different phases that is being followed. An operational audit focuses on a company's internal processes and identifying trouble spots improve operational efficiency to operate more efficiently and effectively. There are five phases in audit process and it includes the selection phase, planning phase, execution or fieldwork phase, reporting phase, and the follow-up phase. These phases is very essential in an auditing process. Operational auditing is best performed by following a process or series of procedures, which is typically carried out by an external auditor. Individual departments or a specific project are evaluated as part of the process. Each step in the process contributes to the overall success. It is a step by step procedure wherein once you skipped one thing in the process there is a possibility that the something could go wrong. Once we have a process, we have a guide on what we are going to do next. Along with that, following a defined, standardized audit procedure will result in communicating audit expectations clearly, maintain a high level of audit quality, if something goes wrong, figure out what went wrong, mitigate risks, encourage staff to participate, simplify training for auditors and workers who are new to the job, keep track of audit process knowledge and document it and will reduce the time it takes to apply for an audit and increase productivity by automating repetitive activities. These phases has its standards that makes the audit more efficient. By following those standards, I firmly believe that it makes the company’s auditing achieved a balanced and fair audit.
ReplyDeleteREFERENCES:
Grabillo, M. A. (2021). Operational Audit: What Are Its Phases? Accessed October 14, 2021 from https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
QVALON. (2021). Operational Audit Overview: Definition, Process, and Purposes. Accessed October 14, 2021 from https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
There are five phases of audit process: Selection, Planning, Execution, Reporting, and Follow-up. Following these five phases of auditing helps the auditor to assess if the policies and procedures of the business is still effective and efficient in the operation. It also identify possible risk that may occur in the business. Following the phases of audit makes the operational audit successful. Canadian Institute of Chartered Accountants. (1993). Although every audit process is unique, the audit process is similar for most engagements and normally consists of four stages: Planning (sometimes called Survey or Preliminary Review), Fieldwork, Audit Report and Follow-up Review. Client involvement is critical at each stage of the audit process. As in any special project, audits require a certain amount of time being diverted from your department’s personnel. One of the key objectives is to minimize this time and avoid disrupting ongoing activities. Vallabhaneni, S. R. (2014). An operational Audit examines the processes, systems, and procedures of an organization and it aims to have efficiency, productivity, and effectivity in a business or different departments. Blazey, M. L., & Grizzell, P. L. (2021). This ensures that the outcome produced at the end of each phases meet their purpose. It allows the projects to develop on its own time and not compromising the result. Equally, operational auditing has it own phases to follow, by adhering with these phases, audit reports can provide assurance that an organization is operating effectively in terms of risk management, governance, and internal control processes. Kusek, J. Z., & Rist, R. C. (2004).
ReplyDeleteReferences:
Wiley CIAexcel exam review 2014: Part 2, internal audit practice. John Wiley & Sons.
https://www.csu.edu/internalaudit/auditprocess.htm
Insights to performance excellence 2021-2022: Using the Baldrige framework and other integrated management systems. Quality Press.
Ten steps to a results-based monitoring and evaluation system: A handbook for development practitioners. World Bank Publications.
Dizon, Mark Raven R.
2019-107007
The ultimate goal of operational auditing is to optimize business efficiency by auditing internal policies and procedures (GoCardless, n.d.). By doing so, the company can identify trouble spots and operate more effectively. However, it does not just focus on the business’ failures and achievements. The auditing process will require a significant amount of time for planning, preparation, and field work. External or internal auditors can conduct operational audits. However, it is stated that when it is audited by outside auditors, it will provide an objective overview of the company's operations. What is the importance of following these phases? And how can it achieve a balanced and fair audit?
ReplyDeleteThe phases of operational auditing include planning, execution, reporting, and follow-up. During the planning phase, the auditor must obtain an understanding of the business as well as its operations in order to make an assessment and determine which key operations should be performed. Following that, execution validates the key control and operation through various methods such as interviewing, documenting, applying testing methodologies, managing fieldwork, and providing status updates. After the key operations and controls have been validated, the report must be prepared and submitted to the audit committee. Finally, any key findings and recommendations prepared by the auditor should be followed up on, regardless of whether those key findings are mitigated by related management or department (Kong, n.d.).
Because operational auditing is a systematic and standardized process, it is critical to follow the phases of operational auditing in the proper sequence. Auditors must conduct a fair and objective audit that results in the achievement of the company's primary goal, and this can only be fulfilled by carrying out proper audit preparation and following its phases. Operations audits are performed to examine all aspects of internal policies, procedures, and operations to ensure that nothing is overlooked. The final report should make management aware of problems they may not have been aware of otherwise, as well as provide them with a knowledge base for making improvements. Executives can also use the results of organizational audits to motivate team members and highlight existing or new goals.
References
GoCardless. (n.d.). Retrieved October 16, 2021, from gocardless.com: https://gocardless.com/en-us/guides/posts/what-is-an-operational-audit/
Kong, S. (n.d.). Operational audit: Definition, Types, Processes, Example, and Reporting. Retrieved October 16, 2021, from Wiki Accounting: https://www.wikiaccounting.com/operational-audit/
-DARLENE L. PALACIO (2019-103509)
To Khyla Bernadette Dalmacion
ReplyDeleteYour ideas and information is really knowledgeable. The way you created this is really informative. It helps me understand more the audit phases. Good job!
-GIAN TRICIA B. TAPIA (2019-103668)
To Adrian Mark Colarina
Your work is outstanding. I like how you share your ideas very clear and informative. I am now enlighten by the information you shared. Nice work!
-GIAN TRICIA B. TAPIA (2019-103668)
To Arielle Jean Drice
I admire how you define and descibe the phases of auditing. It is really helpful for us to understand more this topic. The way you shared your thoughts is amazing. Continue doing the good work!
-GIAN TRICIA B. TAPIA (2019-103668)
The very essence of a procedure or phase is that it would achieve high success in relation to whatever the job is being done which ranges from very simple tasks, like changing a diaper of a baby, to a highly complex project such as assembling an automobile. Regardless of context, following a process would result to the expected outcome given that such planned process would be suitable to such planned outcome. In the context of Auditing, audit phases are established for the reason of achieving a professionally made audit report. Courtnell (2020) stated that following the correct auditing process is vital as there are various cases in which the failure of following such process resulted in to a costly and devastating consequences. In addition to this, Courtnell (2020) reiterated that following the correct auditing processes would result to outcomes that would benefit the business.
ReplyDeleteEach of the auditing phases is important and should not be disregarded as it would lead to a somewhat lacking audit report. Following these audit phases would ultimately lead to a balanced and fair audit because such phases are tailored to achieve such. Audit, being a significant instrument of a business, provides the credibility of the financial statements (Plusaccounting, N.D.) in which would originate from the auditor’s process to conclude such fact. In line with this, a balanced and fair audit is only achieved through the job done made by the auditor – the auditing process helps and guides the auditor into the right and applicable measures for a balanced and fair audit report.
References:
Courtnell, J. (February 12, 2020). Audit Process: 5 expert steps for you to get your audit right. Retrieved on October 12, 2021 from https://www.process.st/audit-process/#audit_process_auditors
Plusaccounting. (N.D.). Why are audits important. Retrieved on October 12, 2021 from https://www.plusaccounting.co.uk/knowledge/blog/why-are-audits-important/
John Patrick Abraham A. Bentulan (2019-106909)
CBET-01-502A
Planning, Fieldwork, Reporting, and Follow-up phases of an audit give a straightforward, effective, and time-tested approach to planning, performing, and reporting the findings of work performed.
ReplyDeleteAudit planning is a critical element of the audit because it allows the auditor to focus on the areas that demand greater attention and dedicate more time to them throughout the audit. Audit planning is critical because it enables auditors to identify concerns that are timely and relevant to their current condition, allowing them to strategize and devise risk mitigation strategies. This phase assists the auditor in completing the audit in a timely manner while also saving time. The direction of the audit process is set in this step.
Fieldwork is crucial in auditing because it allows the auditor to establish the root cause and develop solutions to eradicate it so that the goals and objectives are more likely to be met by conducting interviews, analysing documentation and processes, and testing transactions and documentations. Communication of the findings, also known as reporting, is critical in auditing because it allows the client to make an offer about the insights with the auditor to determine what is the best method for resolving the findings by communicating findings, making observations, and developing recommendations.
The importance of the follow-up phases is to ensure that the action plan has been effectively implemented and that a monitoring system is in place to ensure this. Confirming that the auditor is verifying to ensure that the corrective actions are successfully executed is part of the auditor's success. I believe we can obtain a balanced and fair audit if we follow these auditing processes.
Reference:
The University of Texas at Austin (2021). Audit Process. Retrieved October 8, 2021, from https://audit.utexas.edu/audit-process
Casal,Christian T. (2019-103830)
Internal audit conducts assurance inspections through a five-phase procedure which includes selection, planning, conducting fieldwork, reporting results, and following up on corrective action plans .Management is included in the planning stage and the details are documented in a planning and scoping memo. For me the primary significance of following audit phases is to audit the financial statements systematically and accordingly. Following the correct audit process is vital. Standardized audit processes integrate the best practices ensuring audits do not go awry. When you are following the audit phases you can attentively assessing the financial statements without losing your focus and remain undistracted .You can clearly identify what went wrong, mistakes and errors or if there’s anomaly occurred in financial statements. It can also increase the quality of audit and reduce the time required for audit application, and increasing efficiency in doing it resulting to effectively communicate audit expectations and to assess the best solution in managing the risk. Balance and fair audit can be achieve because audit phases helps to establish that there are no material misstatements in the financial statements of the company, and the company is free and fair from all types of frauds. You can easily determine the preemptive measure to conduct for the continuous success of companies.
ReplyDeletesays:, J. O. J., & says:, J. K. (2020, February 20). Audit process: 5 expert steps for you to get your audit right: Process street: Checklist, Workflow and SOP software. Process Street. Retrieved October 15, 2021, from https://www.process.st/audit-process/.
Office of Internal Audit. Audit Process. (n.d.). Retrieved October 16, 2021, from https://internalaudit.uoregon.edu/report/audit-process.
Internal audit conducts assurance inspections through a five-phase procedure which includes selection, planning, conducting fieldwork, reporting results, and following up on corrective action plans .Management is included in the planning stage and the details are documented in a planning and scoping memo. For me the primary significance of following audit phases is to audit the financial statements systematically and accordingly. Following the correct audit process is vital. Standardized audit processes integrate the best practices ensuring audits do not go awry. When you are following the audit phases you can attentively assessing the financial statements without losing your focus and remain undistracted .You can clearly identify what went wrong, mistakes and errors or if there’s anomaly occurred in financial statements. It can also increase the quality of audit and reduce the time required for audit application, and increasing efficiency in doing it resulting to effectively communicate audit expectations and to assess the best solution in managing the risk. Balance and fair audit can be achieve because audit phases helps to establish that there are no material misstatements in the financial statements of the company, and the company is free and fair from all types of frauds. You can easily determine the preemptive measure to conduct for the continuous success of companies.
ReplyDeletesays:, J. O. J., & says:, J. K. (2020, February 20). Audit process: 5 expert steps for you to get your audit right: Process street: Checklist, Workflow and SOP software. Process Street. Retrieved October 15, 2021, from https://www.process.st/audit-process/.
Office of Internal Audit. Audit Process. (n.d.). Retrieved October 16, 2021, from https://internalaudit.uoregon.edu/report/audit-process.
Rosete, Jun Roi S. (2019-106001)
Audit phases are essential in the execution and success of the audit as it guide the internal auditors in conducting the audit, ensuring that it is able cover the whole scope and objectives of the examination. An operational audit consists of four phases, mainly the (1) planning phase- where scope and objectives are determined, and preliminary review is conducted to set an audit program. (2) Execution phase- or the fieldwork, the internal auditor performs the test to measure the effectiveness of the control in operation, observes and establishes conclusion. (3) Reporting phase- the client is informed of the result through a draft report. Included in this report are the conclusions, observations and recommendations for corrective action. And, (4) Follow up- All audit recommendations and management corrective action plans are followed up to ensure that plans are implemented.
ReplyDeleteWith these procedures, the auditor can gain an understanding of the existing control of the operation, including the risk and develop an effective audit program aligned to the objectives. Accordingly, during development of the audit program, the internal auditor can carefully determine the techniques and approaches that would effectively obtain reliable and accurate information, including evidence, to conclude based on the audit objectives. Moreover, the planning stage help auditor set a trajectory that can help them carry out the audit effectively, particularly in identifying the trouble spots ahead of audit.
Prior to audit activity, the client involvement in the audit is established, the internal auditor meets with the leadership to review the audit plan and discuss the potential impediments to meeting objectives. The scope and objectives, as well as the identified risk will and be use as basis of the audit program. Hence, the result of the audit report exclusively contains accurate and verified data which is based on observations and support of evidences, and not merely presumed, allowing a balance and fair audit. Furthermore, the systematic approach of auditing also allows an objective and organized audit, ensuring that the audit process is efficient to track activity, meet time framework and avoid errors. Therefore, the management can rely on the result of the audit to make decisions.
The office of Internal audit. (n.d). Audit Process. Retrieve October 16, 2021, form https://internalaudit.uoregon.edu/report/audit-process
Murdock, H. (2017). Operational auditing: Principles and techniques for a changing world. Taylor and Francis Group, LLC. pp. 36-61
Auditing is essential in business especially if you manage a big company. It is critical to follow the proper auditing phase or procedure. The audit phase or audit process has four stages: Planning, Fieldwork, Reporting and Follow-Up (Murdock, 2021.) These audit phases has its own purpose towards the success of a company. The importance of following the audit phase can lead to additional insight, which could also lead to better sales, better production processes, and much more efficient systems. Identifying threats ahead of time can help protect an organization from harm in the future that will lead to the success of a business.
ReplyDeleteIf internal auditors will follow the audit phases and do the correct process in auditing, it will lead to a significant impact on a business’s success. It can achieve a balance and fair audit as long as they will follow the correct process or procedure. Having a standardized audit procedure allows us to standardize the processes. Standardized audit processes integrate best practices to ensure that audits will proceed smoothly. Following a defined and consistent audit procedure will result to a favorable outcome such as the following: communicate audit expectations clearly, maintain a high level of audit quality, if something goes wrong you can easily figure out what happen, reduce the time it takes to apply for an audit, increase productivity by automating repetitive activities, and reduce the likelihood of disaster. As a result, sticking to a pre-determined audit procedure protects against audit error. A negligence to follow an audit process will result to failure and it will entail to costly and terrible outcomes.
References:
Murdock, H. (2021). Operational auditing: Principles and techniques for a changing world. CRC Press.
Daniel J. Gartland, C. P. A. (2017, September 1). The Importance of Audit Planning. Journal of Accountancy. Retrieved October 12, 2021, from https://www.journalofaccountancy.com/issues/2017/sep/importance-of-audit-planning.html.
Courtnell, J. (2020, February 12). Audit process: 5 Expert Steps For You To Get Your Audit Right. Process Street. Retrieved October 12, 2021, from https://www.process.st/audit-process/.
- Loven B. Boado (2019-105729)
To Almodiel, Chencel-Annmae:
ReplyDeleteExcellent! You have demonstrated well the importance of the audit phase and how it affects the outcome. The execution of your work is commendable as it encompasses a well-thought transition and information. Job well done!
To Garcia, Helen Grace:
Very informative! I like how you present your idea by giving or providing various examples to explain your position. Aside from that, it is visible that it was well-thought-of considering the information that incorporates your work. Job well done!
To Sangol, Learein:
You have done a great job of expressing your thought and idea. I like how you started by giving the importance of the entire auditing process and then, later on, discuss its different stages. I agree that proper conduct of the audit following its phases is vital to give confidence to the stockholders. Job well done!
DIZON, JAKE C. (2019-106975)
Audit phases is normally consist of four phases, the planning, fieldwork, audit report and Follow-up review. This phases are very important thing to follow by the organization to helps them develop a much-needed trust in the market and to establish that there are no material misstatements in the financial statements and there's is no hidden issues with the operational activities within the organization. These phases helps the company to be free and fair from all types of frauds. This phases enables to carried out by the auditors across the scope of the audit, in order to carefully and examine the plan to execute the audit process. By this it can be used in order for auditors to obtain the necessary action and evidence which enables them to make a sound decision that base on the respective audit objectives. And futhermore to able them to express their opinion in a proper manner especially to a certain problem. The most good side of following audit phases is before doing an action or before risking the first thing auditors will do is to sketch out a strategic plan, as well as the tactical means that will make this plan possible. Moreover, before starting the actual audit engagement tha auditor will develip the overall techniques and method to make sure that everything will work into plan. In overall the importance of following audit phases is it helps the organization and auditors to be successful. Through following audit phases hidden issues and unseen problems within the may identify. These phasee provide a simple, effective, and time-tested approach to organizing, performing, and communicating the results of the work done. That's why it become significant to a organization or auditor to follow the phases.
ReplyDeleteThis Auditing Phases are created originally to help a company to achieve a balanced and fair audit. In this we can clearly see how important to flow the auditing phases because each phases has something to do with regards to companies fraudity and problem. Misstatements, operational errors, and unseen risks will identify by the use of the following phases. The audit phases establish effectivess and efficienty within the audit and organization. According to Manuel Anthony, Auditing process " The auditor should properly plan the audit. This standard describes the auditor's responsibilities for properly planning the audit and The auditor should establish an overall audit strategy that sets the scope, timing, and direction of the audit and guides the development of the audit plan" for it to establish and achieve a balance and fair audit.
References:
• WIki Accounting (N.D) Importance of Auditing Process Retrieved from: https://www.wikiaccounting.com/importance-audit-procedures/
• Bartleby (2015) Auditing Procedures and Reports Retrieved from: https://www.bartleby.com/essay/Auditing-Procedures-And-Reports-Used-By-Auditors-FKA5LPXZ9CXW
• PCAOB (2019) Auditing Planning Retrieved From: https://pcaobus.org/oversight/standards/auditing-standards/details/AS2101
Mallari, Eugene S.
2019-102848
CBET 01-503A
There are five phases of operation management and they are: Selection, Planning, Execution, Reporting, and Follow-Up. First, in Selection phase, a risk-based strategy is used to choose audit activities. During the preparation of the yearly audit plan, internal audit meets with leadership and management to examine risks and potential roadblocks to accomplishing objectives. It is important because this will be the starting point of the companies audit reports on selecting proper strategies in finding frauds and misstatements in the FS.
ReplyDeleteNext, in Planning, every audit necessitates planning, from determining the scope and goal to establishing audit stages to achieve the goal. Internal audit meets with management at the start of the audit to review the audit's objective, risk factors, and other issues. Planning phase is also important because the auditor notifies the client of the audit, meets with organization management to discuss the scope and objectives of the examination, gathers information on critical processes, and analyzes current controls.
While in Execution phase or It can be called as Fieldwork phase, the actions indicated in the planning process are carried out by auditors. Interviews, studying laws, regulations, and best practices, confirming sample transactions, evaluating data sets, and conducting surveys are all common steps. The importance of execution phase is that it focuses on transaction testing and unstructured communication and it also evaluates if the controls identified during the preliminary evaluation are operating effectively and according to the client's instructions.
In Reporting phase, at the completion of the fieldwork, auditors meet with management to discuss the audit's findings, specific findings and suggestions, and other observations. Auditors inform management of these issues via an audit observation memo and request a response from management, along with a corrective action plan and deadline for implementation. In here, the communication with the people inside the company happens, it is important because it can be the way on lessening the different risks that the auditors find.
Lastly, Follow-up phase, to ensure that plans are implemented, all audit suggestions and management corrective action plans are followed up on. It is important because the client response paperwork is examined, and the actions taken to address the audit report findings may be put to the test to ensure that the expected outcomes were achieved.
All of this phases can achieve and balanced fair audit because that’s why it is called “phase” before presenting the final audit report it will go through many steps and auditors can assure that their report is clean and fair.
References:
• Audit Process | Internal Audit | Chicago State University. (n.d.). Chicago State University. Retrieved October 12, 2021, from https://www.csu.edu/internalaudit/auditprocess.htm
• Office of Internal Audit. (n.d.). Audit Process | The. Retrieved October 12, 2021, from https://internalaudit.uoregon.edu/report/audit-process
This comment has been removed by the author.
ReplyDeletePhases of audit serve as guidelines to achieve business goals or objectives and to carefully plan and execute the audit process. In analogy, these phases act like the skeleton of an organization because other aspects of an organization cannot function well without proper designation of planning, fieldwork, reporting, and follow-up. If you will imagine, a company without proper auditing process is like a house build with sand. Once it blown up by the wind or swallowed by a huge wave of ocean, it will crumble. That is the key role of audit phases, to scrutinize every nook and cranny of an organization in order to solidify its foundation and other internal processes.
ReplyDeleteAudit, as defined in the previous lesson, is a systematic process. The four phases of audit are followed by auditors in order to provide sound judgments and help an organization to perform its operation effectively and efficiently. The initial stage, planning, is the most crucial part of an audit because they say that failing to plan is like planning to fail. Poor planning results to inefficient auditing practices causing of rework or doing a certain task multiple times. Second, is fieldwork where in most of the testing is performed. After testing the effectiveness of methods, it is followed by reporting, the third phase. Reporting is communicating the results, observations, and developing recommendations for corrective actions. And the final phase, follow-up, is verifying the application of corrective actions and if the problems are fixed as they expect. If not, they will go back to the first cycle of auditing process. As you can see, each phase filters out errors until it becomes accurate and effective.
Therefore, auditing process achieves a balance and fair audit. It ensures that there are no misstatements or misinterpretations of data. Also, it makes sure that auditors provide an unbiased opinion to the company and the company itself will be free from all types of fraud.
Reference:
Murdock, H. (2017). Operational Audit: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. pp 36-57.
-JANA U. LOREÑO (2019-101799)
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
ReplyDeleteOperational auditing is defined as “a forward-thinking, systematic, and unbiased evaluation of organizational operations” (Mudrock, 2017). It means that operational auditing being systematic, needs to follow a process to achieve its objective, goals, and purpose.
An operational audit process includes 5 phases: selection, planning, execution, reporting, and follow-up. The selection phase and planning phase is the most important part of an audit process. It requires a profound knowledge or understanding of the operations objectives, processes, risks, opportunities, and controls. The execution phase involves an entrance conference, compliance audit, system/process audit, and exit conference. The reporting phase represents the peak of the execution phase and corresponding analysis and considerations made in the audit. It presents an appropriate format of findings together with the evidence gathered. And the follow-up phase is performed to verify whether the plans/recommendations are implemented and determine if the right course of action was taken.
The mentioned audit phases have their role and purpose. It is necessary to follow its sequence to avoid complications in assessing the operation, establishing and implementing audit plans, and gathering evidence for the analysis and findings. If one of these phases were altered or omitted it is impossible to create a proper audit plan and it may also lead to huge losses. Following the proper sequence of operational audit phases with skills, enthusiasm and skepticism can achieve a balanced and fair audit as well as develop an efficient, productive, and effective operation.
References:
Audit Process. (2016, August 15). The University of Mississippi - Office of Internal Audit. Retrieved October 16, 2021, from https://internalaudit.olemiss.edu/audit-process/
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press
Janine Louise S. Errua
2019-103959
Every phases in auditing has their own essence because we can't have the quality audit that we want if we neglect even one in the phases so it is necessary to follow those phases to guarantee that we have done the best audit the company needs. Let us define what are the audit phases and the importance of following those audit phases. First, the selection phase that selects the audit activities using the risk-based approached where it look for risks that can possibly affect the business and from that, audit can be conducted to further know the risks and this is crucial because if the more threatening risks are not propely detected then the audit that will be done is useless. Next, the planning phase where gathering of information happens to determine the objective and scope of the audit that is also important to properly conduct the audit. Third, the execution phase where the fieldwork happens that is executed by the internal audit staff and auditors keep the management updated on the status of the audit and to discuss observation and potential findings and recommendation, and here happens the peak of auditing after the determintion of risk and having the info needed that makes this phase critical. Fourth, is the reporting phase where the conclusions, recommendations and findings are communicated to the management where they can do a corrective action plan and a timeline to implement the result and it is important to properly communicate the results because if not then the management may not apply the corrective plans accordingly. And lastly, the follow up phase that ensures that all the implented plans are still in place and to ensure that the corrective plans have progress and has been effective that is necessary to make sure that the audit that is done is correct and helpful. And to answer the question if it can achieve a balanced and fair audit, yes it can because those phases helps auditing to be systematically done so if followed properly then we can conclude that they were able to evaluate all the risk and have the corretive plan that is needed to mitigate those risk and help the company to run effectively and efficiently.
ReplyDeleteReferences:
Grabillo, M. A. (2021). Operational Audit: What are its Phases?
https://markgrabillo.blogspot.com/2021/10/operational-audit-what-
are-its-phases.html
University of Oregon (NA). Audit process. https://internalaudit.uoregon.edu/report/audit-process
-Rochel Bulatao
2019-101054
The audit phases are the planning phase, fieldwork phase, reporting phase, and follow-up phase. Planning phase includes relevant background information gathering, estimating amount of time, budgeting and defining person of interest. In line with this, risk factor plays an important role especially in planning phase, to assess the variables and impact of the underlying risks. Fieldwork phase is the execution or application of the planning phase, which involves interviewing, documenting, and applying testing methodologies to discuss audit observations and potential findings. Reporting phase is the summary of the audit findings that provides conclusion, and specific recommendations, in this phase communicating the audit also takes place. Lastly, during the follow-up phase, all the audit findings are reviewed to ensure that the corrective actions have been implemented and the problems have been resolved as expected (THE AUDIT PROCESS, n.d.).
ReplyDeleteEach phase is critical in assisting in achieving your goals. These provide a clear, simple, effective, and time-tested method for planning, carrying out, and communicating work results (Murdock, 2016). These are important because they describe how things are done and this determines how successful the outcomes will be. These phases are critical components of any organization because they provide a road map for an organization. It makes sure that decision-making is guided, and that internal processes are streamlined.
The audit phases can achieve a balanced and fair audit because it follows keen step-by-step phases that highly need testing, analyzing, evaluating, and observing in order to understand, identify and communicate issues. It also contains significant data that backs up and supports the necessary findings. These may include testimonials, observations, documentation, work papers, and other audit evidence. Each has its own advantages and disadvantages. However, utilizing these can assist and help the auditor to justify and to avoid being bias with the information.
THE AUDIT PROCESS. (n.d.). Retrieved October 16, 2021, from https://internalaudit.ku.edu/project-process
Murdock, H. (2017) Operational auditing: Principles and techniques for a changing world. CRC Press. Retrieved October 16, 2021, from https://e-rtu.online/pluginfile.php/286094/mod_resource/content/1/Operational%20Auditing%20The%20Principles%20%20Techniques%20for%20a%20Changing%20World.pdf
BATULAN, Anna Marie M. 2019-102079
An operational auditor surely never wants to provide clients with a messed-up auditing service, one which do not have a definite plan, an unspecified course of actions to take, and a directionless auditing process. And this is where the need for following the audit phases arises.
ReplyDeleteAs mentioned by Jane Courtnell (2020), following a set of audit process [or phases] helps safeguard against audit errors which may lead to fatal consequences. When there is no clear picture of where to start, or what to do first and next, the auditor might overlook important risks in need of prompt solutions and details which might have a material influence for the improvement or implementation of new internal controls and policies.
As the task itself is already costly in terms of money, time and energy, businesses cannot afford losing more of their capital in exchange for a lousy service, especially that there would be operational disruptions taking place in light for its conduct. Unwanted work repetitions may also occur when steps are not spontaneously followed.
Moreover, the encouraging reason to apply this standardized auditing procedure in a proper manner is an assurance that it will result to a better, more quality, reliable and accurate audit findings, that eventually serve as the basis for the formulation of more realistic opinions and recommendations regarding the business matters under assessment. These objective results compose a balanced and fair auditing presentation to be reported to clients.
Reference:
Courtnell, J. (2020). Audit Process: 5 Expert Steps for You to Get Your Audit Right. process.st. Accessed October 13, 2021 https://www.google.com/amp/s/www.process.st/audit-process/%3famp
-Ellen Grace Tanhueco
2019-100741
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
ReplyDeleteAn operational audit process provides a report of the analysis of business methods, systems, and procedures (Qvalon, 2021). In auditing, established standards and business activities are subject to assessment. It helps a business in optimizing its performance by identifying the current and possible risks within the organization. In order to produce a sound report, an internal auditor requires to follow certain phases or a series of tasks and activities.
As stated by Grabillo (2021), there are five phases of auditing. It includes the (a) Selection - this is where developing audit plan starts based on the results of the assessment and the department’s available resources; (b) Planning - the internal audit staff gather relevant background information and initiate contact with the client; (c) Execution - the audit plan is performed in this phase; (d) Reporting - communicating the summary of audit report happens in this phase; and Follow-Up - Internal Audit follows up on all audit findings within one year. The operational audit is best when an auditor follows these processes or series of steps because each segment of the process contributes to the success of the whole (Qvalon, 2021). Indeed, following these audit phases is vital in achieving the ultimate purpose of operations audit. It will lead to the improvement of efficiency, effectiveness, and overall performance of a business.
If an organization focuses on these phases, it can effortlessly shape its path to achieving its objectives. And, it will help the internal auditing team to accomplish a balanced and fair audit. In conclusion, observing the proper steps when conducting an audit report is essential. With this, an auditor can produce an adequate analysis that will be beneficial to the decision-making process of the stakeholders in a business.
References:
Qvalon. (2021, July 15). Operational Audit Overview: Definition, Process, and Purposes. Retrieved from: https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
Grabillo, M. A. (2021). Operational Audit: What are its Phases? Retrieved from: https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
FRANDIAN A. BLANCO, 2019-103951
To Casal, Christian T. indeed a more deep explanation and emphasis on the audit phases, great work!
ReplyDeleteTo Rivera, Mary Queen S. I like how you answered the questions on point.
To Mallari, Eugene S. I good job! Your work is very informative in elaborating the auditing phases, don’t be afraid to include your own insight.
Batulan, Anna Marie M. 2019-102079
To ISIP, IRIS G. (2019-103614)
ReplyDeleteI admire how you can discuss the audit phases in simple terms and while keeping accurate. I'd want to comment on how engaging your presentation to the topic. Keep up the great work!
To POBLACION, KIRSTEN GAVEN R. (2019-104425)
I appreciate how you can explain the audit steps in simple terms while yet being accurate. I'd want to compliment on how engaging your introduction. Keep it up!
To ANTHONY C MANGILOG (2019-104415)
You did great for explaining the significance of audit phases; by viewing your work, I was able to understand the concept more thoroughly. I'm happy to read more of your excellent content!
From MANABAT, GHENALYN A. (2019-103679)
Operational auditing is a type of audit service in which the focus is primarily on important processes, procedures, systems, and internal controls, with the primary goal of increasing productivity, efficiency, and effectiveness of the operation. (Eby, 2017)
ReplyDeleteThey provide a new perspective on the positive and negative aspects of organizational practices and processes. The final report should alert management to issues they may not have been aware of previously, as well as provide them with a knowledge basis from which to make adjustments. Executives can also use the findings of organizational audits to encourage employees and highlight existing or new objectives. In the long run, further efforts may result in increased profitability, legal compliance, and employee satisfaction. (Sinra, 2021)
The Organization can achieve its objectives by applying the Phases of Operational Auditing. According to Acardia University (2021), these phases are;
(1) Phase 1 – Planning – This phase includes selecting the engagement team, conducting an engagement risk assessment with input from the client, management, and audit team members, and developing the audit scope and goals. They also develop an audit program, record expected deliverables, and arrange a first meeting with the customer.
(2) Fieldwork - Project Based Work is the stage of the process that involves examining transactions, papers, and records in order to ensure that the controls established by university administration are in place, adequate, being followed, and performing efficiently.
(3) Reporting - This written report includes a review of the specific audited area including both positive and negative audit observations. Any audit results, as well as recommendations to management and management's action plan, are included in the report.
(4) Follow-up Monitoring - this is the procedures to verify the implementation of management’s action plans for the agreed solutions and corrective actions.
Each phase plays a big role in helping you achieve your goals and objectives. The auditing phases give you a clearer roadmap and a more ordered collection of activities. It will be easier for you to reach your goals and be more focused on a specific area that you're working on if you follow these phases. It also provides a higher level of confidence in terms of a balanced and fair audit because each phase is scrutinized by an operational auditor.
References
https://www.smartsheet.com/operational-audit-process?amp
https://www.wikiaccounting.com/operational-audit/
https://www.arcadia.edu/university/offices-facilities/finance-administrative-services/office-internal-audit/audit-process
by: HANNAH SOPHIA G. MONTILLANA
(2019-105628)
According to the Institute of Internal Auditing, internal auditing helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. In connection with that, Grabillo (2021) said that Operational auditing follows a cycle that typically includes five phases, including selection, planning, execution, reporting, and follow-up. The process of these five phases starts in the selection phase, where auditors use a risk-based approach to examine the potential risks that may occur or be faced by the firm that will hinder the auditor's ability to achieve its objectives. Next, the planning phase determines the overall audit strategy which involves the collection of relevant information from clients and determining whether or not it is useful to the company's financial statements, internal control, and how it will influence the auditor during an audit. Once the audit is planned, fieldwork will be performed based on the steps identified in the planning process. In this phase, the plan will be put into action, which often includes conducting interviews and surveys to review the policies and procedures as well as analyzing specific data and transactions. After that, auditors discuss their recommendations to the clients based on their findings and observations during the reporting phase. The clients can respond to the report, which is also a vital part of the final report. And lastly, when the final report is issued, internal auditors, as well as the management, can do follow-ups within one year for the improvements and corrective actions.
ReplyDeleteFollowing these phases will enable auditors to provide a balanced and fair audit since they will assure the business that their findings and recommendations go through substantive procedures and the audit is completed through planned activities. Each of these phases will help achieve the goal of getting assurance that the financial report is free of significant misrepresentation and material errors.
References:
Grabillo, M.A (2021). Operational Audit: What are its phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World.
The Office of Internal Audit. Audit Process https://internalaudit.uoregon.edu/report/audit-process
By: Aplacador, Bianca Marie Q. (2019-106307)
As we all know, auditing is innately intricate, and so is its process. More than just understanding the concept of this discipline, it is also essential to observe the phases it undertakes and why it is very crucial to follow them consciously.
ReplyDeleteWe recently learned that auditing is a tedious and time-consuming task and yet, ironically, time is of essence for all businesses. In other words, businesses really need the audit results as earlier as possible in order to make urgent adjustments with whatever the findings deem it necessary to amend. Do also take note that they have a lot on their hands (e.g., operations, management, marketing, sales)—making it more vital for them to acquire such information to parallel the organization’s objectives better and cater their needs given the existing conditions and circumstances in which the company have involved themselves with.
For this reason, it is no doubt that the audit process works best when its phases are being followed religiously. Meaning to say, doing just the audit work is not sufficient in itself, it must be accomplished through its proper order to establish a free-flowing, objective, and time-efficient work flow that would amplify the reliability and relevance of the results. For instance, the planning phase, being referred as the most important phase of audit, shall be taken into consideration at first hand. Since this phase involves defining the audit’s scope, objectives, and budget based on the available resources and priorities of the company, there is no way that the fieldwork phase (which basically means the execution of the planned framework) would be done without the planning phase, or if the fieldwork phase is impulsively performed with little or no preparation at all, the audit’s reliability and relevance may be tainted.
With this implication, it is safe to say that by following the audit phases appropriately, one could achieve a balanced and fair audit. However, please bear in mind that following the phases, should never be the sole basis in regarding an audit as balanced and fair as there are still other factors that must be acknowledged. Such claim is only contributive, not conclusive.
References:
Buleen, C. (2019). Phases of the Audit Process. Chron. Accessed October 4, 2021. https://smallbusiness.chron.com/phases-audit-process-15260.html
University of Oregon. (n.d.). Audit Process. Accessed October 4, 2021. https://internalaudit.uoregon.edu/report/audit-process
Written by:
DEMABILDO, John Michael F., 2019-101694, CBET-01-503A
RE: SALUTIM, HERSHEY MAE 2019-106961
ReplyDeleteHello! I like how you illustrated some of your examples. Your work is also simple to fathom. I'm looking forward to seeing your next work. Good job!
RE: ARABIT, PRINCESS MAE 2019-103719
Hello there, Princess. I like how you went into detail about the auditing phases. Excellent work!
RE: MONTILLANA, HANNAH SOPHIA 2019-105628
Hello, Hannah! Your work appealed to me because it was simple and direct. Keep up the great work!
FROM: ARONCE, MARY ANGELOU N. 2019-105627
AIRON NICOLE T. JADRAQUE
ReplyDeleteCBET-01-501A
2019-101826
To: Stephanie Balaysoche
Hi Steph! Again, I'm impressed with how you put your ideas into words and explained things in a very logical and informative way. Keep it up!
To: Mary Rose Salvo
Hi Mary! Your work is very informative and I like how you convey your thoughts about the said topic. Great work!
To: Bianca Marie Aplacador
Hi Bianca! You illustrated your work nicely and very informative. Hoping to see more of your works in the future.
Villegas, Mharlouie B.
ReplyDeleteInternal audit performs assurance audits using a five-phase method that involves selection, planning, fieldwork, reporting, and corrective. In selection phase A risk-based approach is used to choose audit activities. During the development of the annual audit plan, internal audit meets with leadership and management to discuss risks and potential roadblocks to meeting objectives. Audits can also be carried out in response to complaints made to the fraud and ethics hotline. Next is planning phase where every audit necessitates planning, from defining the scope and goal to developing audit steps to achieve the goal. Internal audit meets with management at the start of the audit to discuss the audit's purpose, risk factors, and other logistics. The third one is fieldwork phase and the steps are identified in the planning process that are carried out by auditors. Some examples are reviewing laws, policies, verifying sample transactions, analyzing data sets, and conducting surveys are all common steps. During fieldwork, auditors meet with management on a regular basis to discuss the status of the audit, preliminary observations, and potential recommendations. The fourth phase if reporting and at the conclusion of the fieldwork the auditors meet with management to discuss the audit's findings, recommendations, and other observations. Auditors inform management of these issues via an audit observation memo and request a response from management, along with a corrective action plan and timeline for implementation. In final report all needed and useful responses are included. The last phase is followed up phase this is needed to ensure that plans are implemented and all audit recommendations and management corrective action plans are followed up on. Annually, the president and the Executive and Audit Committee are informed of any corrective action plans that do not show up to just be progressing.
As we all know, an operational audit is a systematic process of assessing a company's operational activities on a daily basis as well as on a larger scale. Using the process of audit phases, we can assure a balance and fair audit. Following these audit phases allows for the standardization of procedures, as well as reducing and assisting auditors in conducting proper audits. It's essential to the audit process because it has a direct impact on the auditor's ability to determine the nature of the transaction and how they should approach it during the audit.
Office of Internal Audit. (n.d.). Audit Process | The. https://internalaudit.uoregon.edu/report/audit-process
Sinra Kong, ACCA, CPA (2021). Importance of Audit Procedures. Wiki Accounting.com. https://www.wikiaccounting.com/importance-audit-procedures/
An audit is a report based on the examination of specific business processes while a process is a collection of tasks that contribute to creating the desired outcome. In a sense, an audit process is a series of steps used to examine specific corporate activities.
ReplyDeleteSelection, Planning, Execution, Reporting, and Follow-Up are the five phases of audit process. First, in selection phase, during the preparation of the yearly audit plan, internal audit meets with leadership and management to examine risks and potential roadblocks to accomplishing objectives. Second, during the planning phase, Internal Audit professionals gather background information and make contact with the client. Third, after the audit has been designed, fieldwork is carried out by Internal Audit in the execution phase. Through monthly status meetings, clients are constantly updated about the audit process. Fourth, during the reporting stage, a draft report is used to provide to the customer a summary of the audit findings, conclusions, and specific suggestions. Clients have the option of responding to the report and submitting an action plan with a deadline. These responses are included in the final report, which is sent to the appropriate level of administration. The fifth step is the follow-up phase. Within a year after the report's release, Internal Audit follows up on all audit findings.
Following the phases of audit process is crucial since it can help in achieving and ensuring a balance and fair audit. It aids the auditor in obtaining adequate appropriate proof for such circumstances in operations and if it is properly prepared in accordance to given standards. It is essential to follow the proper audit process since failure to follow it can result in costly and harmful effects in the business.
References:
Grabillo, M.A. (2021). Operational Audit: What are its Phases? Accessed October 08, 2021. https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html?m=1
Courtnell, J. (2020). Audit Process: 5 Expert Steps for You to Get Your Audit Right. Retrieved from https://www.google.com/amp/s/www.process.st/audit-process/%3famp
Sunthorn, Honey Lizette B. (2019-103582)
Although audit process differs from one auditor to another and from one firm to another, we could say that the uniqueness of it provides a broader possibility on how to make the job efficient. Just like what I’ve read in an article from Arcadia University, “While each audit is different, the life cycle of most engagements will normally go through the following broad phases: Planning and Risk Assessment, Fieldwork, Reporting, and Follow Up Monitoring”. Meaning to say that regardless of how you audit a company’s data, following this kind of audit phase would help you stay on track.
ReplyDeleteFollowing the audit phases is important because it helps the auditor determine if the organization’s process is organized. Aside from it helps the auditor to the auditing in a more systematic way making the job easier, it also helps them to double-check their work especially if it’s risk-based. Jeff Clements from Chron wrote, “Having an effective audit system is important for a company because it enables it to pursue and attain its various corporate objectives. Business processes need various forms of internal control to facilitate supervision and monitoring, prevent and detect irregular transactions, measure ongoing performance, maintain adequate business records and to promote operational productivity. Internal auditors review the design of the internal controls and informally propose improvements, and document any material irregularities to enable further investigation by management if it is warranted under the circumstances.” Based from what Clements wrote, we could assume that a company, as well as the auditor, that is not following the audit phases, would not be able to create a reliable financial information and data.
Reference:
Arcadia University (2021). Audit process and phases. https://www.arcadia.edu/university/offices-facilities/finance-administrative-services/office-internal-audit/audit-process
Clements, J. (2019, February 4). The importance of an audit system to companies). Chron. https://smallbusiness.chron.com/importance-audit-system-companies-14705.htm
- CRUZ, IVY FRANCESCA SN. (2019-103873)
ReplyDeleteHi, Learein J. Sangol! Your work is commendable. I like the way you organized your information. It began with a good line and flowed smoothly until the end. Also, I love how you elaborate on each phase to emphasize the importance of adhering to the operational audit phases. That is excellent work by you, and I look forward to reading your next work.
- Garcia, Helen Grace M. (2019-106976)
Hi, Jake C. Dizon! As always, your work is magnificent. All of the information is well-connected and well-written. I also like how you discuss the importance of following operational audit phases in a concise and clear manner. I am looking forward to reading more of your work.
- Garcia, Helen Grace M. (2019-106976)
Hi, Chencel - Annmae F. Almodiel! You've perfected the art. You skillfully discussed the significance of each operational phase. And I really like how you organized your ideas, especially in the last paragraph. Congratulations! Keep up the good work.
- Garcia, Helen Grace M. (2019-106976)
To: Patricia Lynn Guamos
ReplyDeleteI recently had the good fortune of reading your work. It was well-written and contained sound, practical advice. In fact, You pointed out several things that I will remember for years to come. I look forward to reading your next informative work. Thank you.
-Dugay, Bernadeth (2019-103892)
TO: MR. JOHN MICHAEL F. DEMABILDO
ReplyDeleteHello, John! I hope you are safe and healthy. I like how concise and cohesive your thoughts are. Excellent work. Thank you for sharing your views!
TO: MR. EUGENE S. MALLARI
Hello, Eugene! I hope you are in a good situation. I appreciate how you logically formed your ideas into one concrete answer. Great job. Thank you for your insights!
TO: MS. ROCHEL M. BULATAO
Hello, Rochel! I hope you are in good condition. I love the way you answer the question. I agree with your views regarding this topic. Thank you for your insightful discussion!
FROM: FRANDIAN A. BLANCO, CBET 01-503A
To: Darlene Palacio
ReplyDeleteI have just finished reading your writing.I want to tell you how much I appreciated your clearly written and thought-provoking information. Keep uo the good work.
-Dugay, Bernadeth (2019-103892)
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
ReplyDeleteAn operational audit entails an evaluation of the activities performed in a program or process in the pursuit of its objectives by individuals, that are often supported by different tools (Murdock, 2017). Operational auditing is crucial in the organization as it may dictate how the business will perform in the succeeding years of operation. Thus, it should not be done in freestyle, and due professional care must be exercised.
In conducting auditing, it is imperative to follow a systematic approach so that the auditor will carry out its obligation to the entity smoothly. There are four phases in auditing that auditors should follow: the planning phase, the fieldwork or execution phase, the reporting phase, and the follow-up phase. Following these phases is essential because it allows the auditor to provide better judgment and reasonable assurances to the company, resulting in the fulfillment of operational auditing's purpose of improving the organization's operation. Moreover, as operational auditing evaluates both day-to-day and overall activities of an organization, actions should be taken one at a time to ensure that every area of the organization's operations is properly evaluated and assessed and there must be a well-defined auditing plan to examine every detail about the entity’s operation. It is important that auditing must be executed with due care, results must be communicated and reported to the management, and follow-ups must be conducted afterwards. Furthermore, following these phases avoid repetitive auditing evaluations and results in a shorter time frame of the auditing process.
In addition, adhering to the auditing phases leads to a more balanced and fairer audit. Because each activity in the business is assessed and evaluated more thoroughly, and these phases increase the work efficiency of the auditor, the auditor will be able to make more accurate and reasonable judgments regarding the entity's operations. Without these phases, the conduct of auditing would be chaotic and disorganized, which may negatively affect the accuracy, completeness, relevance, and correctness of auditing.
Reference:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World (1st ed.). Taylor and Francis Group, LCC.
GESTA, CHARLOTTE G. – 2019-100594
To: Danica Halina
ReplyDeleteYour work was very revealing and interesting.
The way you discuss the topics are always interesting and educational. I enjoy reading your work and i learn a lot about the topics that you've discussed. Keep up the good work 🙂
-Dugay Bernadeth (2019-103892)
This comment has been removed by the author.
ReplyDeleteBusiness improvements done by operational auditing ensures efficient and effective management within the firm (Qvalon, 2021). Auditors follow procedures systematically set. The phases of operational audit usually involve four to five steps. Grabillo (2021) recognizes five. These include selection, planning, executing, reporting, and follow-up phase.
ReplyDeleteDiscussing its importance, the selection phase per Grabillo implements an assessment at the end of the year for identifying risks and constructs a plan of audit based on it. It lays the foundation of the action needed to take. Planning may seem similar to the selection phase. But, it arranges the timeline, scope, report distribution, and compromises with the client. Without planning, it may fail effective project management.
The execution phase is important as we implement the strategized action and discuss what the auditor has found so far (Grabillo), and Murdock (2017) calls this the testing part. The execution phase covers the fixing of issues that may or maybe not be larger than expected. Reporting shows the results together with the proposed solution. Here, the clients are given time to make their response against the found problems. Murdock affirms that this phase is needed as this is the stage of the owner’s decision-making. Lastly, a follow-up from a year now on is issued to check if the corrections are exercised (Murdock).
Following audit phases are necessary as it serves as the backbone of the job. The phases give a structured approach that assures your actions are on the right track and is in line with the professional standards. Moreover, as the process is not customized per individual, it helps achieve balanced and fair auditing. The phases may vary in number, but the content remains the same.
References:
Grabillo, M. (2021, October 2). OPERATIONAL AUDIT: WHAT ARE ITS PHASES? Retrieved October 16, 2021 from https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html?m=1
Murdock, H. (2017). Operational Auditing (pp. 36, 41, 54) [eBook edition]. CRC Press.
QVALON. (2021, July 15). Operational Audit Overview: ☝️ Definition, Process, and Purposes. Qvalon. Retrieved October 16, 2021 from https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
DUEÑAS, ALYSSA MAE B. (2019-102691)
ReplyDeleteTO: MS. ELLEN GRACE TANHUECO
Hello, Ellen Grace! Your work is very impressive. I appreciate how it was organized logically so that we could easily comprehend your point of view. I like how you emphasized that when the standardized auditing procedure is followed properly, it ensures that better, higher-quality, more reliable, and accurate audit results are produced, which can then be used to develop more realistic judgments and recommendations about the business concerns under review. Keep it up!
TO: MR. FRANDIAN BLANCO
Hello, Frandian! I admire how you logically organized your thoughts so that we could immediately understand your point of view on this matter. Indeed, it is vital to follow these audit phases in order to achieve the ultimate purpose of operations audit which is mainly to boost the company's efficiency, effectiveness, and overall performance. Keep up the excellent work!
TO: MR. JOHN MICHAEL DEMABILDO
Hello, Dema! I loved how you presented your thoughts. You were able to widened the topic and still be able to convey it precisely. I do agree that there is no doubt that the audit process works best when all of its phases are followed properly. And that executing the audit work isn't enough as it needs to be done in the right order to create a free-flowing, objective, and time-efficient work flow that improves the results' reliability and relevance. Great work!
REMELYN SABANGAN CBET 01-503A 2019-101964
To Angelika Francia:
ReplyDeleteHi, Francia! I like how you concisely discussed your take on the topic.
To Patricia Denise Leyco:
Hi, Leyco! You clearly elaborated and organized your thoughts coherently and I commend it.
To Jennaly Batjer:
Hi, Batjer! I love how you simplify your point to make it easier and quicker to comprehend.
-Paglinawan, Eliazar A. CBET-01-501A 2019-101459
To: Alyssa Mae Dueñas
ReplyDeleteHi Aly! Your writing is really insightful, and the information is very well-connected and written. It is easy to comprehend. I also want to commend you for citing sources and following the APA format. Good job!
To: Jana Loreño
Hi Jana! Your work is commendable! It's informative and well-explained. I like how you briefly introduce and describe first the purpose of audit phases. Keep up the good work!
To: Loven Boado
Hi Loven! You did an impressive work! I like how you also put the importance of following the audit phase. It gave me further knowledge and ideas about it. Good job!
-MARANAN, PATRISHA C., 2019-100624
Audit phases include planning, fieldwork, reporting and follow-up. This is relevant to be adhered to by the operational auditor because it provides versatility in the business environment. Wherein, it can be used and applied when certain phenomena have undergone in the company’s operation. Also, audit phases help to provide continuous improvement in the management of the company because it involves jotting down old practices and suggesting new and efficient ways that have to be practiced by the company. Lastly, following audit phases is a powerful and straightforward tool because it will help to resolve new and recurring issues which therefore minimizes waste and increases efficiency. Basically, following audit phases is important especially in the operation of a company because it helps to efficiently and effectively identify risks that the company might face in the future and create plans ahead of time on how to overcome them.
ReplyDeleteBy following audit phases, I believe that it can achieve a balanced fair audit since in every audit phase you have certain principles and steps that need to be followed before you undergo in the next phase. So then, in every phase there are requisites that should be taken that are briefly analyzed before the next phase is performed. Hence, there will be a balanced fair audit because there are certain attributes that need to be focused in a certain phase and this will be the guideline for the next phases. However, there are some drawbacks or loopholes during the transition of audit phases which are perhaps the lack of security features and technology advancement which could affect the result of the audit result. But then, an operational auditor has the capability to think more logically than any other artificial intelligence and he is more capable to balance the audit for it to be fair and just which is through adhering in audit phases prepared by himself in line with the respective company. Therefore, with a proper system of audit phases, there will be a balanced fair audit and no difficulties in meeting the company’s goals.
Reference:
Operational Audit Overview: Definition, Process and Purposes (Jul 16, 2021) Retrieved October 16, 2021, from https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
Accountants Go Cardless (n.d.). What is an operational audit? Accessed September 30, 2021. https://gocardless.com/en-us/guides/posts/what-is-an-operational-audit/
By: Escritor, Rheabelle 2019-106337
This comment has been removed by the author.
ReplyDeleteAccording to Eisenhower (1961), “plans are worthless, but planning is everything”. The former US president emphasized this during the Second World War. This may sound contradictory, why bother with planning at all if plans are useless? What he means when he said this was, while sticking to the original plan under continuously changing conditions is rarely a smart idea, the availability of a pre-computed initial plan allows us to come up with a nearly optimal approach. This is the same as following audit phases, the quality of auditing depends on the process itself.
ReplyDeleteAudit phases is not a simple process. It has a lot of factors to consider, including professional standards, the organization’s management, and operations. According to the University of Oregon (n.d.), operational audit has five phases, these are: selection, planning, fieldwork, reporting, and follow up. According to Zimba (n.d.), an organization’s involvement in every audit process will lead to a quality audit. The approach works best when the auditor and the client have a strong and productive working relationship built on open and constant communication. Audit phases make sure there aren't any surprises throughout the audit, resulting in a superior final product. While following the phases of the audit, operational auditors can easily identify possible changes or errors throughout the audit. Audit phases can guarantee a high-quality audit report.
A balanced and fair audit can be achieved through audit phases. Since the audit process consists five phases, tracking each task and following the set deadlines is possible. This approach will result in a quality audit report without sacrificing the integrity of the result, as it follows a systematic approach. The Board of Directors can make a wise decision based on this high-quality audit report.
References:
Daniel J. Gartland, C. P. A. (2017, September 1). The Importance of Audit Planning. Journal of Accountancy. Accessed October 16, 2021 https://www.journalofaccountancy.com/issues/2017/sep/importance-of-audit-planning.html.
Garcia, A., Ceberio, M., & Kreinovich, V. (n.d.). Plans are worthless but planning is everything. Springer. Accessed October 16, 2021 https://link.springer.com/chapter/10.1007/978-3-030-40814-5_11.
Office of Internal Audit. Audit Process. (n.d.). Audit Process. University of Oregon. Accessed October 16, 2021 https://internalaudit.uoregon.edu/report/audit-process
Zimba, A. (n.d.). Audit process and phases. Audit Process and Phases. Arcadia University. Accessed October 16, 2021 https://www.arcadia.edu/university/offices-facilities/finance-administrative-services/office-internal-audit/audit-process.
- Oclarit, Sophia Shield G. (2019-105246)
To: Rheabelle Escritor
ReplyDeleteHi, Rheabelle! Your work is very informative! I also agree that at every phase there are requisites that should be taken that are briefly analyzed before the next phase is performed.
To: Mary Queen Rivera
Hi, Maryqueen! The organization of your thoughts is impressive! I also agree that a systematic approach to auditing also allows an objective and organized audit.
To: Marinel Nudo
Hi, Marinel! Your writing is impressive! I also agree that following audit phases is important to every auditor because this will help them to make quality reports.
An audit is a report based on the examination of specific business processes while a process is a collection of tasks that contribute to creating the desired outcome. In a sense, an audit process is a series of steps used to examine specific corporate activities.
ReplyDeleteSelection, Planning, Execution, Reporting, and Follow-Up are the five phases of audit process. First, in selection phase, during the preparation of the yearly audit plan, internal audit meets with leadership and management to examine risks and potential roadblocks to accomplishing objectives. Second, during the planning phase, Internal Audit professionals gather background information and make contact with the client. Third, after the audit has been designed, fieldwork is carried out by Internal Audit in the execution phase. Through monthly status meetings, clients are constantly updated about the audit process. Fourth, during the reporting stage, a draft report is used to provide to the customer a summary of the audit findings, conclusions, and specific suggestions. Clients have the option of responding to the report and submitting an action plan with a deadline. These responses are included in the final report, which is sent to the appropriate level of administration. The fifth step is the follow-up phase. Within a year after the report's release, Internal Audit follows up on all audit findings.
Following the phases of audit process is crucial since it can help in achieving and ensuring a balance and fair audit. It aids the auditor in obtaining adequate appropriate proof for such circumstances in operations and if it is properly prepared in accordance to given standards. It is essential to follow the proper audit process since failure to follow it can result in costly and harmful effects in the business.
References:
Grabillo, M.A. (2021). Operational Audit: What are its Phases? Accessed October 16, 2021. https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html?m=1
Courtnell, J. (2020). Audit Process: 5 Expert Steps for You to Get Your Audit Right. Retrieved from https://www.google.com/amp/s/www.process.st/audit-process/%3famp
Sunthorn, Honey Lizette B. (2019-103582)
CBET 01-501A
To: Jana Loreño
ReplyDeleteHello, Jana! You're way too imaginative! I like how you used a scenario or an example to define audit phases since it helps me comprehend it better. Your thoughts are well-organized and it flow smoothly from one to the next.
To: Patrisha Maranan
Hi! Patricia! I like how you have a lot of relevant sources to back up your claim or response.
To: Alyssa Dueñas
Good day, Alyssa! You offered an excellent response as to how important the following audits are and the way you went over each audit step one by one was well-organized and understandable.
Sunthorn, Honey Lizette B.
2019- 103582
CBET 01-501A
There are five phases of audit process: Selection, Planning, Execution, Reporting, and Follow up. In selection the Internal audit will conduct a risk assessment near the end of the year. They will develop audit plan based on the results of the assessment and the department available resources for the subsequent year. And then after that the staff will gather relevant background information and initiate contact with the client during the planning phase to identify risks and determine the objectives and scope of the audit. Once the audit is planned, they will execute the fieldwork where the clients will be informed of the audit process through regular status meeting. And then a summary of the audit findings, conclusion and specific recommendations are officially communicated to the client. Where the clients have the opportunity to have feedback and come up with an action plan and time frame based on the result of the audit. Lastly, the internal audit follows up on all audit findings within one year of when the report was issued. It is important to follow these phases to achieve a balanced and fair audit. As defined above, it has a lot of work to do and every phase has different goal to achieve. Through the process you will see the client’s involvement which is important that they will see how the audit works and have a better understanding in the audit process to see the accuracy and transparency on how the internal audit evaluate. And by that they will have to come up a better plan to achieve the objective and goal of the organization and use the resources effectively.
ReplyDeleteReference:
Grabillo, M. A. (2021). Operational Audit: What are its Phases?
https://markgrabillo.blogspot.com/2021/10/operational-audit-what-
are-its-phases
CASTOS, CHANNEL N
2019-101672
CBET-01-503A
To: Adrian Mark Colarina
ReplyDeleteI really enjoyed reading your work. It was well-explained and easy to understand because of the words and phrases that you've used. Good job!
To: Arielle Jean Drice
I love how you express your opinions and perspectives about this topic. It was nice learning new things from you.
To: Gian Tricia Tapia
Hi, Gian! Your work is really informative, your opinions are clear. I love how your thoughts are well-organized.
To: CHRISTIAN CASAL
ReplyDeleteI appreciate how you construct your sentences - it is cohesive - in a way that it can make the reader understand the thoughts you put in better.
To: DON LUIS VILLANUEVA
I love the insights you have considered in your work. A well-planned work. Keep up the good work.
To: ERIKA MAGTIBAY
The ideas are plotted well and is on point. It discusses further what we should know about the topic - thank you for that.
To: REMELYN SABANGAN
ReplyDeleteI loved how your ideas are formed to provide better understanding of the different phases in Auditing and present us a vivid idea of the importance of following these phases accordingly. Indeed, people who do not have first hand knowledge regarding this phases could catch up while reading your work. I would love to hear more of its importance from you. Thank you for that!
To: ELLEN GRACE TANHUECO
Your insights about the topic are plotted cohesively. People won't get lost in getting your main point as you have provided a clear idea about the topic. Truly, following audit phases accordingly could have a significant effect to the management. Thank you for presenting.us yiur thoughts about auditing phases and its importance.
To: FRANDIAN BLANCO
Hello! I really enjoyed reading your work. Your ideas are precise and straight forward. The sentences are constructed cohesively where readers can understand your point. A work well done. Thank ypu for sharing your knowledge with us.
PIOLIN, RICKA MAE
2019-101805
There are different audit phases depending on what the author or an auditor believes to be the phase. According to Wandering CPA (2021), there are 5 audit phases, selecting phase, planning phase, executing phase, reporting phase and a follow up.
ReplyDeleteIn my own opinion, Audit phases is important because this may serve as a guide on process in auditing for better and accurate elaboration of the actions to be done on different areas that needs to be audited. Being in the right path when an auditor is making an evaluation of the business’ operation is crucial because it will be the basis of the decisions or advices that they will provide to help the business manage risks, find areas to grow and make the systems flow smoothly within the business.
I also believe that following audit phases will make a balanced and fair audit. Following audit phase as a checklist will be beneficial to an auditor to see all the progress on the area that they audit and to determine what is the next step that they shall conduct. And as I have mentioned above, one of the important tasks of an auditor is to make sure that their audit is accurate. Following audit phase will show the accuracy of all the information and action that they shall execute. And lastly, conducting an Audit phase will make a balanced and fair audit because an auditor will be focused to a certain area that needs immediate action or audit within the business.
Wandering CPA (2021 October 2). OPERATIONAL AUDIT: WHAT ARE ITS PHASES? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
ROTONI, JOHANNA MARIE V.
2019-103691
The aim of an operational audit is ultimately to optimize efficiency. By auditing the business's internal policies and procedures, the company can identify trouble spots and operate more effectively (Grabillo, 2021). However, what would it be like if there are no specific procedures or processes to be followed in conducting internal audit? Will it still achieve its goal? Or does the produced audit report is reliable? Well, these are just some questions that would pop out of your mind considering conducting internal audit without following any processes. And here’s the reason why it is important to follow processes or what we call "audit phases” in internal audit, for you to not come up with such questions.
ReplyDeleteThe audit phases consist of – planning, fieldwork, reporting and follow-up. During the planning portion of the audit, the auditor notifies the client of the audit, discusses the scope and objectives of the examination in a formal meeting with organization management, gathers information on important processes, evaluates existing controls and plans the remaining audit steps. The fieldwork concentrates on transaction testing and informal communications. It is during this phase that the auditor determines whether the controls identified during the preliminary review are operating effectively and, in the manner, described by the client. Upon completion of the fieldwork, the auditor summarizes the audit findings, conclusions and recommendations necessary for the audit report discussion draft. Clients have the opportunity to respond to the report and submit an action plan and time frame. These responses become part of the final report which is distributed to the appropriate level of administration. And lastly, internal audit follows up on all audit findings within one year of when the report was issued.
Furthermore, here are some examples why audit processes are needed, (1) in the UK audit failures caused 30,000 Maxwell pensioners to suffer major financial loss through no fault of their own; (2) by not following audit processes exactly, auditors failed to note fraud. This led to the conviction of five officials in the Baptise Foundation of Arizona. There were 32 accounts of fraud. 11,000 investors lost £400 million and; (3) the collapse of the energy, commodity and service company Enron, has been associated with audit failure. This has been described as the world’s largest bankruptcy. From these examples, it is clear that failure to abide by an audit process results in costly and devastating consequences.
In conclusion, following the audit phases is vital as it does not just help to achieve a balance and fair audit, but also to maximize the conduct of operational audit in terms of benefits. Such as, identifying potential growth areas, improve business efficiency, provide motivation and maximize productivity and pinpoint risks and opportunities.
References:
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
QVALON. (2021). Operational Audit Overview: Definition, Process, and Purposes. Retrieved October 17, 2021. https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
Courtnell, J. (2020). Audit Process: 5 Expert Steps for You to Get Your Audit Right. Retrieved October 17, 2021. https://www.process.st/audit-process/#audit_process_auditors
Chicago State University. (2021). Audit Process. Retrieved October 17,2021. https://www.csu.edu/internalaudit/auditprocess.htm
-TANDAYU, LEXTER M. (2019-106755)
To: Fritz Reizen Lopez (2019-103689)
ReplyDeleteI really liked the paragraph structuring of your work - the conciseness and the flow of idea. Also, I highly agree that following the audit phases would justify the audit is balanced and fair whereas the information presented is not biased and in compliance with the requirements for the audit.
To: Rhea Lyn Mendoza (2019-101819)
I agree on your statements on following the audit phases would ensure that their job is being done in the right manner. Regarding to your statement on following the audit process, I would like to add that by following these audit phases, the auditing process was made for the purpose of achieving correct output.
To: Thea Sofia Barabicho
I would like to commend your line about the communication after the gathering of information for which this is aimed to the very purpose of audit. Also, you have highlighted the significance of the feaedback phase which I would like to add that the feedback phase is also a chance for improvement because it gives chances to those departments to hear their side and add input to the present information.
To: Shayne Danielle Samson
ReplyDeleteHi, Shayne!
I like how well-explained the main idea was in your discussion. Your work is simple, but covers the whole thought and elaborated the topic efficiently. Your work is concise enough and words are effectively used, to the point I just don't want it to end. All in all, it's a good job. Thank you for your work.
-Talabong, Ela Rain F. (2019-102788)
To: Charlotte Gesta
Hi. Charlotte!
Your work is well-done. The ideas are complete and well-explained. I love how your ideas are logically arranged and I think they effectively conveyed the topic. I'm looking forward to more of your works.
-Talabong, Ela Rain F. (2019-102788)
To: Joylyn Ticala
Hi, Joylyn!
The composition of your discussion is well-done. I love how you explained the topic and also the further elaboration of the information presented. All in all, I think it's a good piece of work. Great Job! I'm looking forward to more of your pieces.
-Talabong, Ela Rain F. (2019-102788)
To Don Luis Villanueva,
ReplyDeleteHi Don Luis, your work is very informative and it helped understand the differences of each phase has. I agree with a lot of your statements and hope to read more of your work in the future.
To Leila Lauren Carlos,
Hi Lauren, I like how you explained first the phases of Operational Auditing. As a reader, it helped me understand the subject even more. I also liked how you used an analogy about how to fry an egg. Overall good job and good work.
To Channel Castos,
Hi Channel, I agree with everything that you said in your work especially how the client should know the progress and see how fair and accurate the auditing has been. Hoping to read more of your work in the future.
-Hans Theo Ezequiel N. Valenzuela (2020-110421)
To: Ricka Mae Piolin
ReplyDeleteHi! I like how you tackled everything as you were able to give me additional knowledge to the topic! Thank you for your ideas!
To: Janine Louise Errua
Hello! I enjoyed reading your work and Iam looking forward to reading more of your works!
To: Remelyn Sabangan
Hi! I love your work! You were able to discuss everything in detail, keep uo the good work!
-Rochel Bulatao
2019-101054
A behind story of a successful business in the industry always comes after building a good harmony within the management and employees. What I mean when I said good harmony is that it's about everything that's happening within the organization. Which includes the established policies and regulations being followed, critical analysis of risk or threats, excellent decision making and a lot more. Sometimes, we tend to undervalue these things and continue to commend the owner behind its success. However, the fact is that all of these work are being done by the operational auditor who plays the most critical role in the success of the business and the one that should be getting more credit for it.
ReplyDeleteThe work that is being done by an operational auditor improves the overall performance of the business and some of it are, figuring out the proper approach to increase the sales while reducing the costs, developing strategic initiatives to maintain and improve the audit function, identifying operational risks and make recommendations to manage it. It truly requires great amount of patience and perseverance just to fulfill the role of an effective auditor and why am I explaining these things? It is because I believe that all these outstanding work of an operational auditor can be possibly met by considering and following the audit phases.
There, I said it. I firmly believe that following the audit phases has a significant role in the success of the business. And that is its importance. There are five phases of operational audit process: Selection, Planning, Execution, Reporting, and Follow-Up. To summarize, in selecting phase, internal audit conducts risk assessment and creates a plan out of it. It’s all about selecting risk, plan and available resources. Then, after selecting, the internal audit now plans, which includes knowing all the relevant background information such as objectives and scope of the audit. Once done, internal audit will now execute everything that is planned beforehand. Technically, the last in the process is reporting phase wherein all the findings and recommendations are discussed with the clients and once both party agreed, it will now be the final report which will go to respective areas. Because the auditor must keep these reports up to date, an additional phase is being done which is only to follow-up such findings. All these five allows the auditor to maintain a systematic process of conducting such work with efficiency and effectiveness. And so yes, I also believed that doing the necessary steps or phases mentioned above will achieve a balanced and fair audit.
REFERENCE
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
AJY B. PALAMO (2019-106334) CBET-01-503A
To Thea Sofia Barabicho, I like how you paraphrase your answer and make it understandable to whoever reads it. I really admire your work and looking forward to read your output in the future.
ReplyDeleteTo John Patrick Abraham Bentulan, the one that captures my attention is your analogy on the first part of your answer. It gives me a hint on how things work in the auditing phase. Keep up the good work.
To Kiana Zarain, what ai like on your work is how you relate a famous quotation to the things that needed to be discussed. Also you explained it concisely.
From: LOPEZ, FRITZ REIZEN V. (2019-103689)
- To Mary Ann Cebuano,
ReplyDeleteWell done, Mary Ann!
I appreciate how you discuss the topic. The ideas are organized nicely and are very understandable. Keep up the good work!
- To Fritz Reizen Lopez,
Good job, Fritz!
I agree that if the phases of audit are not properly followed, there might be problems that may arise unexpectedly in the future that is why it is crucial to follow those phases to be on track and lessen risks. Hope to read more of your works. Padayon!!
- To Celine Carandang,
Great work, Celine!
The organization of your work is good. The ideas are concise yet well explained and are logically arranged. I had gained new knowledge about each phase thanks to your work.
Lovely Rose Griarte (2019-105060)
To: HONEY SUNTHORN
ReplyDeleteHello, Honey! I like how you discussed your work in a concise way. More so, you clearly identified the importance together with the examples that made it easier to understand.
To: JANA LOREÑO
Greetings, Jana! Your artistic comparison of a company without an auditing process to a house, made me understand your subject better. I commend you for that. Aside from that, you successfully identified the importance of each process and the process as a whole. Good job!
To: PATRISHA MARANAN
Hi, Patrisha! Kudos to your informative and creative explanation of the audit phases. The opening sentence already captured your whole discussion which makes it easier to grasp what auditing is. You have also done a great job in citing references.
DUEÑAS, ALYSSA MAE B. (2019-102691)
To: Lovely Bangate
ReplyDeleteYour analogy and examples about the absence of Operational Audit phases is remarkable. It made it easier to see the importance of the phases. Also a great job in using APA format
To: Jaqueline Ligutan
You have clearly identified and classified the definition and importance of Operational Auditing Phases. You also have given interesting your insights about the topic. You have cited your sources very well
To: Catherine Buling
You have defined the phases in a very simple way that any one can understand. This just shows that you have a clear understanding about the topic. Your citations are also very reliable
Ashley Habon (2019-102695)
CBET-01-501A
In every business, auditing is fundamental since it focuses on achieving company's goals and objectives. Assessing processes, strategies to attain effectivity and efficiency. There are four phases of auditing planning, fieldwork, reporting and follow-up. Planning is where they establish strategies and method for the over-all development and risk assessment plan of the company. In order to be effective, one must have a depth understanding about the company's internal control, problems affecting the business and deficiencies. Setting-up a well audit plan requires a thorough review of the plan as well as communication. Fieldwork is a phase where evaluation and testing of methodologies takes place. Testing if the set goal were achieved and to see if the methods use were effective. The communication of result happens in the reporting phase of auditing. During the performance stage of the audit plan, observation and finding where communicated this is also where recommendations and points of improvement is done. Follow-up review is done by auditor to make sure that the corrective action was performed. Determining if all action plan were implemented and also addresses concerns, and problem. During the procedural change the auditor will continuously evaluate the performance of the revised action.
ReplyDeleteThis procedure was created to maintain balanced and fair audit. In a sense that auditor plan techniques and methods that will increase the company's effectiveness. Following the process honestly is a warranty that all results will be accurate, relevant and independent. All data and information were guaranteed to be free from all misstatement and biases since it undergoes a series of steps it has been reviewed and monitored with all professionalism and integrity.
References
Curay, M. J. (2021, September 11). Auditing: OBJECTIVES & PHASES OF OPERATIONAL AUDITS 09112021 by MJBC. Retrieved from Youtube : https://www.youtube.com/watch?v=7aUabD77FvI
Public Company Accounting Oversight Board. (n.d.). Retrieved from Google : https://pcaobus.org/oversight/standards/auditing-standards/details/AS2101
MICAH LEI C. LONGNO (2019-106978)
CBET 01- 503A
In auditing, it's critical to stick to audit phases since you can't move from one to the next without first finishing the one before it. It is critical to complete the audit phase in order to simplify duties, verify that things are done correctly, reduce confusion, and save time. Things go well when the audit steps are followed correctly. A risk-based strategy is used to choose audit activities. During the creation of the yearly audit plan, internal audit meets with leadership and management to evaluate risks and potential roadblocks to reaching objectives. The actual advantage of audit preparation comes from the process itself, which is often underestimated. Auditors achieve more than simply compliance with professional standards by carefully recording countless client information; they also produce more efficient engagements and assist decrease professional liability risk. You can't do auditing correctly without these things.
ReplyDeleteIt's critical to follow audit phase since anything may go wrong if you don't. It is comparable in following instructions, if you decide to cross the street and someone advises you not to, they are probably warning you for a cause, such as to avoid being hit by a car or being shot in a drive-by shooting. That is why audit process exist: to guarantee that auditing is conducted efficiently and effectively. It is critical to follow the audit procedure since failing to do so might result in a slew of unwanted or unjustified negative consequences. An effective operational audit may help you increase efficiency, identify hazards, and improve internal controls.
The Office of Internal Audit. (n.d.). Audit Process. https://internalaudit.uoregon.edu/report/audit-process
SALAPARE, DARYLL A.
2019-102486
TO BIENICE BARROMETRO
ReplyDeleteHello, Bien! This shows that you have a solid grasp of the issue, and I like how you presented all of the important aspects.
TO BOY VICTORIO
Hello, Boy! The subjects are well-presented, and I admire your excellent word choice.
TO MARY ROSE SALVO
Hello, Mary! You exhibited a solid grasp of the issue by presenting these thoughts in this manner, which supplied me with further information on the subject. I particularly admire the clarity and fluency with which you presented all of the information you acquired.
SALAPARE, DARYLL A.
2019-102486
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
ReplyDeleteThe advantage of auditing process comes from the procedure itself. Auditors can accomplish further than mere adherence with professionalism by carefully recording countless client information; they also produce more efficient engagements and assist in decreasing any professional liability risk.
I believe internal auditing can help achieve a balanced and fair audit because of the five phases of audit process which are Selection, Planning, Execution, Reporting and Follow-up. (Audit Process | The Office of Internal Audit 2021)
In Selection phase audit activities are selected using a risk-based approach. Internal audit meets with leadership and management during the development of the annual audit plan to discusses risks and potential impediments to meeting objectives; Planning phase each audit requires planning, starting from defining the scope and objective to developing audit steps to meet the objective. Internal audit conducts an entrance meeting with management to discuss the purpose of the audit, risk factors, and other logistics; Fieldwork phase auditors conduct the steps identified in the planning process. Steps often include conducting interviews, reviewing laws, policies and best practice, verifying sample transactions, analyzing data sets, and conducting surveys. Auditors meet regularly with management throughout fieldwork and discuss the status of the audit, preliminary observations, and potential recommendations;
Reporting phase auditors conduct an exit meeting with management at the conclusion of the fieldwork to discuss the results of the audit, specific findings and recommendations and other observations. Auditors communicate these to management through an audit observation memo and ask management to provide a response with a corrective action plan and timeline to implement. These responses are included in the final report. Management and leadership are provided an opportunity to review drafts and provide feedback; Follow-up phase all audit recommendations and management corrective action plans are followed up on to provide assurance that plans are implemented. Corrective action plans that do not appear to be progressing are reported annually to the president and Executive and Audit Committee. (Audit Process | The Office of Internal Audit 2021)
Since we are using risk-based approach, a risk assessment can help to identify any gaps in the environment and allow for a remediation plan to take place. The internal audit program will help us track and document any changes that have been made to your environment and ensure the mitigation of any found risks. (Harvey, What is the Purpose of an Internal Audit & Why Are They Important? | KirkpatrickPrice 2021) With the aforementioned details about the phases of internal auditing we can conclude that fairness and balance can be achieved by the organization if operational auditors are able to maximize their strategies in conducting these internal auditing phases so that potential risks can be prevented and improve the management making it more efficient and more effective.
References:
Audit Process | The Office Of Internal Audit. (n.d.). Audit Process | The Office of Internal Audit. https://internalaudit.uoregon.edu/report/audit-process.
Harvey, S. (2017, May 11). What Is the Purpose Of an Internal Audit & Why Are They Important? | KirkpatrickPrice. KirkpatrickPrice Home. https://kirkpatrickprice.com/blog/5-reasons-why-internal-audit-is-important/.
- LUIB, BEVERLY JANE B. 2019-105706
This comment has been removed by the author.
ReplyDeleteAudit has four broad phases namely: planning and risk assessment; fieldwork – project based work; reporting; and follow up monitoring. During the planning and risk assessment, auditors analyzes several risk factors as well as gather several sources that will be crucial in making the overall plan and/or development of the plan. Next phase is the fieldwork, wherein, auditors will discuss audit results and identify any possible corrective plans by examining the documents of transactions and records to validate if the policies are followed, efficient, and effective. Then, reporting, which is a written report that discusses the specific audited area, as well as the positive and negative audit feedback that is noted with recommendation of what action the management can take. Lastly, the follow up monitoring, it is for the verification if the agreed corrective actions and/or recommendation is implemented by the management, as well as to receive feedback on the auditors work for him to improve his skills and experience to provide better service.
ReplyDeleteThe importance of an audit process is most importantly for the compliance with professional standards, reduce liability risks, develop auditing engagement efficiency, and lay out quality audits. Following the audit phase benefits the business, as well as the company, also, through audit phase the objective of auditing is met.
From my perspective, it is a yes and no, because it really depends if the auditor if he have independence, objectivity and professional skepticism, which is a crucial characteristic as an auditor, whether an internal auditor or an external auditor.
Reference:
Zimba, A. Audit Process and Phases. https://www.arcadia.edu/university/offices-facilities/finance-administrative-services/office-internal-audit/audit-process
DE LOS SANTOS, FEBVIE ROSE C. 2019-103240
To Beverly Jane B. Luib
ReplyDeleteYour work is very informative and I like the way you organized it.
To Daryll A. Salapare
The information need to explain the importance of audit phase is well presented. The references provided also helps in improving the factuality of the work.
To Micah Lei C. Longno
It is noticeable to your work that you are knowledgeable to the things that you are explaining to your audience. It is well discussed that helps readers learn more about audit phases.
Yap, Joseph Ian C.
ReplyDeleteCBET-01-503A
According to J. Curay (2021), the two phases of an operational audit are the analysis of the functions of the company to understand the functioning of the organization and the efficiency of the processes. It's crucial to follow the phases of the operational audit because it is a systematic process wherein the internal auditor conducts risk management near the end of the year. Establish the audit plan for the following year based on the outcomes of this evaluation and the department's available resources (Selection phase). Plan each project, gather essential data, contact clients to identify risks, and set the audit's goals and scope, including the fieldwork timeline and report distribution (Planning phase). The internal audit team conducts fieldwork following the audit plan. Regular status meetings keep clients informed about the audit process. As significant as audit observations are potential occurrences and suggestions (Execution phase). A draft report provides a summary of audit findings, conclusions, and specific recommendations to the customer. Clients can reply to the account by submitting an action plan that includes a deadline. These responses are engulfing in the final report, allocated to the appropriate management level (Reporting phase). Finally, yet important internal auditor follows up on all audit findings within a year of the report's issuance.
A balanced and fair audit can achieve by the commitment of independence and objectivity. The audit report of financial statements must be relevant and faithfully represented following the prescribed accounting standards. Timeliness and accuracy of the audit are also matters. In the issue of checking financial reporting, the auditor must identify if the statements or values are accurate and not all evidence is authentic or legitimate.
Reference:
J. Curay (2021). Auditing: Objectives & Phases of Operational Audits 09112021 by MJBC. Retrieved October 16, 2021. From: https://www.youtube.com/watch?v=7aUabD77FvI&t=326s
KU Internal Audit (N.D.). The Audit Process. Retrieved October 16, 2021. From: https://internalaudit.ku.edu/project-process
Hi, Rochel. I read your work, very informative, easy to understand, and well explained. Your citations are correct. Keep it up the good work.
ReplyDeleteHi, Eugene. You did a great job, keep it up! Your work is awesome, I’m glad that I read your work, citations are correct.
Hi, Frandian! I’m speechless, I love how you explained, it’s easy to understand because well detailed and informative. Great job!
Joseph Ian C. Yap CBET-01-503A
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
ReplyDeleteAn operational audit is the examination of processes, systems, and policies of an organization primarily on its operations (Qvalon, 2021). The reasons behind this audit is to first assess whether the organization’s operation or policies and procedures are effective and can provide efficiency and second is to find any loopholes within the overall system to further improve it. Having stated all of these makes it obvious that an audit review in the operations of the organization is time consuming and costly but the outcome leads to improved performance of the organization and can future-proof the business against uncertainties (Grabillo, 2021).
One of the description of operational audit is being systematic as seen for the policies and procedures that we are considering in the review that they conducted. In order to become systematic, it should have phases, in operational audit there are four phases these are: planning and risk assessment, fieldwork-project based work, reporting, and follow up monitoring. These phases are significant because it makes the audit more organized and effective in the sense that the auditor can do his job at ease because these phases are guide or a step by step procedure on his/her progress in auditing. Also, these phases introduce the concept of “one step at a time” meaning the auditor is aware of what he/she is doing, preventing to leave any important details making the audit organize so that the auditor can further analyze and to think of best solution. An organized audit is what makes an audit effective since it can understand easily therefore overflowing conclusions may exist.
I strongly believe that considering the phases of audit can achieve a balanced and fairer audit because it undergoes a comprehensive and thorough evaluation of organization’s activities meaning these phases serve as guide to auditors so every step that they did, they can verify it whether if it is right or wrong.
Reference:
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Qvalon (2021). Operational Audit Overview: Definition, Process, and Purposes. https://qvalon.com/blog/operational-audit-overview-definition-process-and-purposes/
- Alikhan James M. Permejo (2019-102651)
This comment has been removed by the author.
ReplyDeleteOperational audit phases are critical in the audit process because they allow internal auditors to complete their work in a methodical manner. Internal auditors can carefully design and conduct audit processes, as well as get feedback from management on whether the corrective review was completed in order to achieve the organization's objectives, by following the audit phases. Planning, fieldwork, reporting, and follow-up are the steps of an operational audit. The planning step entails risk assessment, resource allocation and timeliness, data gathering that will serve as the foundation for scope selection, and the creation of an audit strategy. Internal auditors organized the audit process at the start of this phase. Fieldwork is defined as any activity involving the testing of an organization's existing process or program, as well as the collection of evidence, such as interviews, documentation, observation, and recalculation of operations. Internal auditors might utilize evidence to check if business operations are relevant to attaining the objectives and goals in this phase. Internal auditors communicate their findings, observations, and suggestions to clients during the reporting phase. Internal auditors might use this step to convey the audit to information consumers. Internal auditors do follow-up checks to see if management has implemented the corrective action. It enables internal auditors to obtain feedback on management's performance in terms of how the organization's challenges were addressed. Every phase is critical because it provides information that internal auditors can use to determine if the performance is accurate in relation to the audit objectives. Internal auditors can give balanced and fair audit reports if these steps are completed independently, without bias or third-party involvement. They may not be able to provide the highest level of assurance, but they can provide reasonable confidence that can be used by management to handle risk and challenges connected to the organization's objectives.
ReplyDeleteReference:
Auditing: Objectives & phases of operational audits ... (n.d.). Retrieved October 12, 2021, from https://www.youtube.com/watch?v=7aUabD77FvI.
Grabillo, M. A. (2021). Operational Audit: What are its Phases? https://markgrabillo.blogspot.com/2021/10/operational-audit-what-are-its-phases.html
Audit Phases include selection, planning, fieldwork, reporting, and follow-up. It is essential to go through these phases for it improves the efficiency of the organizational audits and departmental effectiveness. It also assists management in identifying and correcting inefficiencies in corporate processes. Audit phases can achieve fair audit for it involves continuous evaluation of the business process and assessing risks factors to achieve the objectives of the organization and to improve its efficiency. To further understand the essence of following through audit phases is to understand what happened to each step.
ReplyDeleteFirst is selection, where the internal audit meets with leadership and management to examine risks and potential roadblocks to achieving goals. Second is planning involves risk assessment, budgeting, and identifying what internal audit function will review based on the available resources and needs, and objectives of an organization. Hernan Murdock(2017) states that planning is one of the most significant parts of an audit and that poor planning leads to insufficient auditing practices and poor scheduling.
Fieldwork includes identifying whether the process or program under consideration is well-designed, with the associated goals and objectives likely to be met, and evaluate and see whether the controls in place are working as intended by management. It includes gathering audit evidence to evaluate during their reviews.
The fourth phase is known as reporting, which includes discussing the results of the audit. It includes discussing the review's findings, insights, and best practices, as well as making recommendations for corrective action. After reporting the finding, the next phase is follow-up where the auditors and management should verify that the problems are fixed and the corrective actions are properly applied.
Reference:
Daniels,R. (2020). What is an Operational Audit? Its Objectives, Advantages & Disadvantages. Retrieved from https://www.businessstudynotes.com/finance/auditing/operational-audit/
Murdock, H. (2017). Operational Auditing. Taylor & Francis Group, LLC
PALOGAN, DANIELLE C. 2019-101944
To: Jaqueline Ligutan
ReplyDeleteYour work shows that you clearly understand what are the phases of Operational Auditing and why it's important. I would like to commend you also for using APA format. Great job!
To: Lovely Bangate
You have discussed your perspective
in a precise and concise way. I like that it's entertaining to read and very informative.
To: Ashley Habon
I like how you discuss the topic in a short but informative way. This demonstrates that you really understand the topic. Job well done!
Catherine Buling (2019-103626)
This comment has been removed by the author.
ReplyDeleteFrandian Blanco
ReplyDeleteHi, Frandian! I love how on point your answers are, and you've elaborated them so well right from the general ideas to specific ones. Keep up the good work!
John Michael Demabildo
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Eugene Mallari
Hi, Eugene! I totally agree with your points. I am amazed by how you make them compact just within two paragraphs. Good job!
From: Ellen Grace B. Tanhueco (2019-100741)
To ELA RAIN TALABONG
ReplyDeleteHi Ela! As expected, your thoughts and ideas about the importance of auditing phases are well-presented and clearly elaborated. I had fun reading your work because of its clear construction and it is very informational. Keep up the good work, and I'm looking forward to hearing more of your thoughts in this discussion.
- Gesta, Charlotte G. (2019-100594)
To SHAYNE DANIELLE SAMSON
Hi Shayne! I love the way you presented your work. It is well constructed and clearly elaborated. It is also very informational and you pointed out the importance of following the auditing phases. I'm looking forward to see read more of your discussions soon. Keep up the good work!
- Gesta, Charlotte G. (2019-100594)
To KIANNA ERIKA ZARAIN
I really admire how you well-constructed and well-explained your work is. It is informative and you mentioned how important it is to follow the auditing processes. I'm looking forward to reading more of your discussions in the near future. Keep up the excellent work!
- Gesta, Charlotte G. (2019-100594)
Hello, Lovely Bangate.
ReplyDeleteI like how you started your discussion with a question that leads to an informative output. It is engaging to read and it is well-constructed. Nice work!
Hello, Rhea Mae Yuga.
Good day. I've learned a lot from your concise and on-point constructive work. It is evident in your discussion that you've understand the importance of following audit phases. I would also like to commend you for following the APA format. Well done!
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I admire the content of your work. The flow of infomation is organized and easy to understand. You've also established good points on the said topic, great work!
- JOANNA ELAINE MACANIP (2019-103856)
To: Shayne Danielle Samson
ReplyDeleteHi, Shayne!
I agree with all you said. I like how you explain the significance of adhering to audit phases. I really like how you described at the end that following audit phases is like climbing a stair and skipping a step increases the possibilities of falling; this is so accurate. And this is a great work!
To: Ela Rain Talabong
Hi, Ela!
Your work is very informative. I enjoy how you present your ideas in a logical manner. I absolutely agree with what you said about the importance of audit phases in correctly conducting audits and providing timely analysis of operations. This is a great work!
To: Joylyn Ticala
Hi, Joylyn!
I appreciate how you highlight the selection, planning, execution, reporting, and follow-up phases as the foundation of the audit process. It enlightens me on the subject. Your work is extremely insightful and well-organized. Excellent work!
Alcantara, Shiela Mae D. – 2019-103506
Just like other things, Audit also has its own phases. In which each phase needs to undergo a specific amount of time to fully process it. Auditing has 5 phases which compose of the following Selection, planning, execution, reporting, and followed up. Proper planning is one of the best strategies to maintain consistency and to inform the clients about the information and to identify the objectives. The actual advantage of the following phases and of the preparation comes from the process itself as along the way the auditors can learn from it. Having those engagements within the clients’ needs careful consideration and assessment. The purpose of the auditors is to make sure that the given information is free from bias.
ReplyDeleteThe importance of this is to plan the action in advance to reduce the risk that might occur. The importance of these audit phases is to follow all those specific procedures and guidelines and to ensure that the company is following them effectively and efficiently. A balanced and fair audit can be achieved by showing or providing appropriate values and business ethics. To make sure that there is no form of data manipulation, an auditor needs to possess good values and attitudes. The main objective of all of these is to make the company’s performance in a good state and provide the client the best service that they deserve.
References:
Gartland, Daniel J. (2017) The Importance of audit planning https://www.journalofaccountancy.com/issues/2017/sep/importance-of-audit-planning.html
To: ME-AN JOY A. OMPAD (2019-104916)
ReplyDeleteHello Me-an! I like how you presented your assignment. It is very informative and organized. I like how you describe each phases.
You have concise and smooth flow of ideas. I agree with your insights especially when you mentioned that planning phase is the most crucial phase out of the 5 phases. You did a great job Me-an! I hope to read more of your works in the future!
From: KRYSTAL VIEN T. LADAO (2019-106903)
To: SEAN LESTER NOMBRADO (2019-106902)
Hello Sean! I like how you presented you work with your in-depth insights. I learned a lot from your work. You didn't just tackle audit phases but also you discuss other relevant topics in your assignment. And you presented all of your insights and the informations you've gathered in an organized manner. You work is very informative! You did a great job Sean! I hope to read more of your works in the future!
From: KRYSTAL VIEN T. LADAO (2019-106903)
To: JOYLYN L. TICALA (2019-103552)
Hello Joylyn! I like how you start with an interesting quote about the importance of audit process before you tackle the audit phases. You presented your work in an organized and concise manner. Thank you for sharing your insights and the informations you've gathered. I learned a lot from your work. Job well done Joylyn! I hope to read more of your works in the future!
From: KRYSTAL VIEN T. LADAO (2019-106903)
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
ReplyDeleteAccording to Hernan Murdock, Operational auditing is defined as “A future-oriented, systematic, and independent evaluation of organizational activities.” In this definition, we can see the word systematic. When we say systematic it means that in operational auditing, we follow a certain processes or procedures to improve the organization’s profitability and to attain the organization’s objective in an effective and efficient manner. This process or procedures is considered as the guide of an organization in order for them to perform their activities and tasks correctly, to give guidelines for their decision-making and internal control, and to ensure that their policies and objectives is still applicable and if it’s not possible to use it anymore they can change or improve it.
Organizations should have a plan of action or there are procedures that they need to follow so it will increase the probability of achieving their objectives. Like any other audits, operational auditing follows phases that provides a simple, effective, and time-tested approach in organizing and performing work efficiently (Murdock, 2017). These phases can lead the auditors to exercise professional judgment, to provide a fair and objective opinion and to ensure that all information, policies and process is still in line with the policies and objectives of an entity. By not following these phases, there is a possibility wherein an organization will drift away from its objectives that could result to wasting its resources and it will be difficult for us to determine the risks and opportunities that could lessen the efficiency and effectivity of an entity.
Reference:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. Taylor & Francis Group, LLC.
-Cancino, Jovin E. (2019-106913)
To: Lexter Tandayu
ReplyDeleteHi Lex! what an excellent explanation, your work is concise and direct to the point I would also like to appreciate that you truly justify why audit phases are important great job!
To: Coline Bertiz
Good day Coline! I totally agree that audit procedures are critical in the development of the company. Also, I like how condensed your explanation to the topic, well done on making your work clear and comprehensible.
To: Erica Bandola
Hello Erica! I just want to say that your work is on point. I love how you elaborate the audit phases in an informative yet simple manner. Good job!
MICAH LEI C. LONGNO (2019 - 106978)
What is the importance of following audit phases? Can it achieve a balanced and fair audit?
ReplyDeleteFirst and foremost, we will define what is audit?
An audit is an objective examination and evaluation of the financial statements of an organization to make sure that the records are a fair and accurate representation of the transactions they claim to represent. The audit can be conducted internally by employees of the organization, or externally by an outside firm (Touvila,2020).
In order to examine the efficiency and effectiveness of the operation of the entity, an audit phases can be utilized to optimize the operation. From that, the business can reduce further losses and expenses, lessen operational costs and to make it more competitive.
There are five phases of operational audit: Selection, Planning, Execution, Reporting, and Follow-Up. These phases are substantial to achieve balanced and fair audit.
When the internal audit team or external follow the phases of operational audit, a systematic audit procedure is practice. Due to that, a relevant result will show off after the audit. Additionally, the operation after the audit will gain transparent and fair presentation of outcomes since those phases are properly followed wherein the management team can use it to form a better management control that will help the entity to operate effectively.
To sum it up, an operational audit is essential and required to examine regular basis of operation and to ensure that all the system implemented within the management are well properly executed. The ultimate goal of operational audit is to optimize efficiency. Undeniably, the business can maximize the resources, understand the risks the business may encounter with, reduce further costs and can create an impact to internal controls.
Reference:
Touvila, A. (2020). Audit. Accessed October 17, 2021. https://www.investopedia.com/terms/a/audit.asp
Landar, Connard B. (2019-105059)
To: Crishia Ellaine Ramos
ReplyDeleteFeedback: Hi, Crishia! I appreciate your work, thank you for sharing your thoughts about the importance of following audit process.
To: Myra Dianne Rillera
Feedback: Hello, Myra! I learned a lot in your work. I admire how you elaborate your ideas about following audit phases. Keep up the good work.
To: Mary Rose Salvo
Feedback: Hi, Mary Rose! I like how you emphasize your work, thank you for sharing your ideas. Keep it up!
To: Daniela T. Paragas
ReplyDeleteHi daniela! I was amazed how you research well the topic. I agree on what you said that procedures are essential to the business or organizations. It was a concise and well thought discussion. Rooting to read more of your discussion.
To: Kianna Zarain
Hi kianna! I'm impressed on how well you discuss the topic. It is well thought and organized. I also want to commend you for using right citation. Hoping to read more of your discussion.
To: Me-an joy Ompad
Hi me-an ! I love how you compose your ideas, it was organized and concise. I agree with you that auditing phase helps the organisation to allocate the limited resources of the company and identify the possible risk that may arise. I also want to commend you for using right citation. Rooting to read your another discussion.
Maria Eloisa A. Ramos
2019-101335