1 - PLANNING PHASE

During the planning phase of an audit, along with management being notified, information is gathered about the area to be reviewed, and existing controls are evaluated.

Entrance Conference

Prior to beginning an audit, management is informed of the audit indicating the scope and objectives of the review. During the entrance conference, the internal auditor meets with the management directly responsible for the unit under review, and any staff members they wish to include. Management describes the unit or system to be reviewed, the organization, personnel, facilities, equipment, funding sources, and other relevant information. It is important that management identify issues or areas of special concern that should be addressed as part of the audit.

Internal Control Analysis

The internal control structure will be reviewed to determine the areas of highest risk and design tests to be performed in the fieldwork section.

2 - FIELDWORK PHASE 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 properly and in the manner described by management and departmental personnel. The fieldwork phase concludes with a list of significant observations from which the auditor will prepare a draft audit report.

Testing

After completing the preliminary review, the auditor performs testing of major internal controls and the accuracy and propriety of the transactions.

Communication

As the fieldwork progresses, verbal and/or written communications are made on any significant observations and are discussed with management. Hopefully, management can offer insights and help the best method of resolving the observation. The goal is for there not to be any surprises.