The work carried out by supervisors must be reflected in a written document (Supervision Act) as proof of this action, which must reflect the shortcomings or technical failures detected and the recommendations derived from them, as a result of the review of the work of the supervisors. auditors, by the official or specialist in charge of executing it, which must be carried out systematically and as the different stages of the Audit progress.
The following research suggests the fundamental aspects that must be taken into account in the preparation of a Supervision Report.
Supervision of the work of the personnel assigned to the audit is necessary so that those working at all levels of the examination understand the overall objectives of the examination and the procedures necessary to achieve them.
Much of the information obtained during the planning stage related to the characteristics of the entity to be examined, especially possible accounting and review problems, and the timing with which the audit procedures should be applied, should be made known to the audit staff..
Because much of the detailed work is carried out by auditors, they must bring important auditing and accounting issues uncovered to supervisors during the review.
To this end, the working papers prepared during the audit are used to review the work carried out.
There may be variations in the way of preparing the work papers according to the skill and experience of each auditor, but always complying with the provisions of the Audit Manual on the presentation of these.
In no way should there be a lack of evidence in the working papers showing how the audit procedures and their results were actually carried out.
Staff will undoubtedly run into problems and need to seek the advice of the supervisor. These problems, including the solution, must appear on the working papers.
Thus, evidence is formed that proves that staff received proper supervision. On this matter it is necessary to make a special clarification:
The auditor should ensure that for each question reflected in the working papers a suitable solution has been fully presented and documented.
Otherwise the presence of questions without their corresponding answers could be indisputable evidence that staff supervision and due professional care were lacking.
If there are differences of opinions, when an auditor does not agree with the final solution, after the problem has been discussed, they must be recorded in the working papers.
Of course, the final solution given to the dispute must be properly founded and described in those documents.
Working papers are generally designed in such a way that the people who prepare them have to put their initials and the date of preparation.
When reviewing the work, the supervisor also signs the papers with his initials to record his intervention.
The audit manual has designed working papers so that the auditor has to initial each check, and stamps are even distributed to initial the evidence supporting a check in auditee documents.
The practice of reviewing and evaluating the implementation of a program in stages is beneficial, a procedure that helps the supervisor to assign the work to the auditors, supervise it and keep informed of the progress of the audit.
The essential purpose of supervision is to ensure compliance with the audit objectives and reasonable quality of work. Adequate supervision and control of the audit is necessary in all cases and at all stages of the work, from exploration to issuance of the report and its analysis with the factors of the audited entity.
Likewise, it must guarantee compliance with the Auditing Standards and that the final report correctly reflects the results of the verifications, verifications and investigations carried out.
Adequate supervision must ensure that:
- All members of the audit team have clearly and satisfactorily understood the audit plan, and that they do not have personal impediments that limit their participation in the work The audit is performed in accordance with the Auditing Standards and general practices accepted for this activity The audit plan prepared for this purpose is followed and the established procedures are applied, considering the authorized modifications The group leader reviews the work of the subordinate internal auditors The work performed by the group leader is reviewed by The supervisor The working papers contain evidence that adequately supports the conclusions, recommendations, and opinions and observations reflected in the final report. The final audit report contains the conclusions,details and recommendations that are considered pertinent according to the results of the reviews carried out.
The work of the internal auditors grouped in an Internal Audit Unit must be reviewed by the group leader and supervised by the leader or official authorized to do so.
Supervision is a technical process that consists of directing and controlling the Internal Audit from its inception to the presentation of the report at the competent level.
Supervision implies determining whether the objectives set out in the Internal Audit are being achieved and directing the efforts of the internal auditors towards their compliance.
The work carried out by supervisors must be reflected in a written document (Supervision Act) as proof of this action, which must reflect the shortcomings or technical failures detected and the recommendations derived from them.
The review of the work of the internal auditors, by the group leader, must be carried out systematically and as progress is made in the different stages of the Internal Audit, in order to guarantee that:
- The working papers are legible, understandable and reflect:
a) an appropriate design in accordance with the objective pursued and other questions of form;
b) sufficient information so that no further explanations are required;
c) the record of all the reviews carried out by the officials authorized to do so;
d) a description of the meaning of the revision marks used by internal auditors, in cases where these are not established centrally;
e) the results of the work performed and the notes to be included in the report, if applicable;
- The evidence obtained is relevant, sufficient and competent; The calculations reflected in the working papers are correct; y The tests carried out or the samples applied are adequate.
Supervision normally has two levels of execution: the one that corresponds to the one carried out systematically by the group leader and the one carried out by the Directorate official designated as supervisor.
This allows the group leader to review the work of the rest of the auditors related to the audit and the supervisor, the work of the group leader; in addition, more generally, that of the audit as a whole.
The review by the group leader must be carried out systematically and as the work progresses, ensuring that the work papers are legible and contain or reflect:
- The appropriate format in accordance with the intended purpose and other formal details established in the corresponding Organization Manual Sufficient information and that it does not need additional explanation The evidence of the limitations that have affected the scope of the audit. The results of the work carried out, the summaries of the verified topics, minutes or partial reports and the proposal of the final report on each topic. That the evidence obtained is sufficient, relevant, competent and reasonable. That the calculations reflected in them are correct. tests carried out and that they are adequate; that the marks on the work papers conveniently show the checks and reviews carried out; cross references between documents that are related to each other.The written record of the analysis carried out with the heads of the areas at the conclusion of the review of each issue, through the use of the Information and Analysis of Deficiencies and violations by Areas or Issues Act.
Supervisor
The review carried out by the supervisor does not have the same systematicity as that of the group leader, but it is developed in all the stages of the audit and they are:
Exploration
The supervisor must check at this stage if the degree of reliability granted by the group leader on internal control (accounting and administrative) corresponds to the elements provided by the reviews, verifications and updates of data, background and other issues, as required provided in the Exploration Document. (See Article published on this site, entitled "The previous exploration".
Likewise, you must evaluate the suggestions of the group leader regarding the convenience or need to vary the original objective or the scope of the audit.
Of planning
The supervisor verifies that the planning of the audit responds to the general objectives set initially or, to those that were added or modified later.
Likewise, if they are consistent with the results of the previous exploration performed; checking that within said planning are reflected as a minimum:
- The auditable period That the areas to be audited are the most relevant to achieve the audit objectives The detail of the main checks to be carried out, including the checks to be carried out aimed at verifying that the violations and deficiencies detected in the audit have been eradicated. Previous audits That there is a rational distribution of the tasks to be carried out between the acting auditors and specialists from other spheres who participate, as well as that they have their individual work plan That the time allocated to each task is adequate, taking into account its complexity and the experience of the auditor responsible for its execution.
After verifying the above, it proceeds to approve the planning.
Of execution
At this stage the supervisor must visit the unit in which the work is being carried out, checking, mainly, by reviewing the work papers; that the Auditing Standards are being met according to the phase of the work being carried out, including:
that a study and consequent evaluation of internal control (accounting and administrative) has been or is being carried out, the results of which will substantiate the scope and extent of the verifications and checks carried out or to be carried out in the audit.
In addition, you should consider:
- The level of compliance with the objectives set and the planning approved. That the checks carried out have the adequate depth and correctly show the results, as well as that the evidence of the findings meet the requirements of sufficiency, relevance and competence. The samples used allow, from the verifications and verifications carried out, to infer the status of the operations in the period selected as auditable. Evidence that meetings have been held with the heads of the audited areas to report the results of the verifications and verifications carried out, as well as, that their opinions are included in the Acts of Notification of the Audit Results (partial);
This being recorded by means of the signature of the entity's official and that of the acting auditor.
- That, if possible, the preparation of the final audit report is being prepared in parallel with the development of the audit. That the preparation of the working papers complies with the provisions of the corresponding Organization Manual.
Preparation of the final report
At this stage, the final audit report is finalized and generally ends when it is concluded in the field; being the stage in which the supervisor must verify that the Auditing Standards have been observed, especially referring to Standards for Reporting, and also check:
- Adequate preparation of the working papers as indicated in the Execution stage Cross references between the working papers and the final report That the qualification given to internal control (accounting and administrative) and other evaluations given are correspond to the type of audit carried out, are reasonable, adequate and are consistent with the results of the audit That everything that is consigned in the final report is reflected in the working papers and that it responds to relevant findings with sufficient and competent evidence That the results of the checks in each area have been analyzed with a comprehensive approach, so that it is possible to specify those results in their intimate interrelation, and the overall impact on the management of the entity. That the report also complies with,with what is established in the corresponding organization.
At all stages, the supervisor must record in the working papers and documents reviewed, by signature or personal stamp and date on which the verification was performed, as well as the guidance provided, if the latter is necessary.
Among its functions, the supervisor must present in writing his assessment of the development of the audit and its results, especially regarding the fulfillment of the planned objectives, as well as the guidelines given to the group leader and acting auditors.
Likewise, he must inform the head of the department the results of each supervision carried out and his final evaluation of the work
When the head of the audit department so determines, the supervisor must participate in the meeting to analyze the results of the audit with the factors of the audited entity.
It should be noted that participation in this meeting allows you to assess the performance of the group leader in that meeting.
Responsible:
The procedure will be executed by:
a) The Group Leader to the auditor.
b) The supervisor to the Group Leader
c) The supervisor to the auditor, if the Audit is not appointed Head of the Group.
Standards:
- Supervision Act
For each supervision carried out, a Report will be issued using the Standard “Supervision Act”.
Risks:
- That the auditors have impediments that limit a clear and precise understanding of the stage being supervised. The recommendations left in previous supervisions are not fulfilled. That the supervisions are not carried out at the necessary time required by the Audit and / or the auditor performing the work. Little preparation of the supervisor to assess the development of an activity and / or audit.
