A new way of reporting.
Internal auditing is a strategic activity inasmuch as, through its effective action, it allows reducing losses, costs and non-productivity. Your product is revealed through reports and recommendations.
These reports must be clear, accurate, timely, and resource-efficient.
The directors and owners to whom these reports are directed have less time every day, or to put it another way for the same amount of time, have a greater demand for activities every day. Faced with this situation, internal auditors find themselves in the urgent need to be, as previously stated, clear, concise, timely and make the most of resources.
How to achieve the above? Radically changing the way of making and presenting observations and recommendations. There is no time or resources to devote to the preparation of tedious and long reports, as well as spending excessive amount of time reading and analyzing the reports by the managers or officials to whom they are directed.
The reports must be coupled at the time of their design, to the design of the process of controls, inspections and work papers. In this way, extracting the results and observations from the work papers, they can be directly transferred to the report.
Now, what characteristics should such reports have?
1. They must reflect in a matrix, for each sector, area, process, product or service, and based on various concepts such as: internal control, compliance with tax regulations, compliance with labor standards, levels and quality control, among many others to define for each type of company and activity in particular, through the use of graphic components, the level of risk or defects detected. Giving it a red color for situations of risk, high commitment or serious defects, and a yellow color for a medium level. In this way, managers will have a clear and impressive vision at first sight of the observed situation.
2. For each control segment with observations in said matrix, give the explanation in writing briefly and clearly, advising the measures to be adopted.
1.1 Warehouses - Inventories
For a total of 10 items, appreciable differences were observed between the quantities that appear in the Auxiliary Records and the physical quantities counted. The total difference corresponds to an amount of $ 24,500.- representative of 5% of the total accounted for as inventories of inputs.
3. Generate a score for each item, and then present it graphically according to its improvement or deterioration in relation to the previous controls. In this way it will be possible to observe items that, although they do not present disadvantages, their score shows a decline in relation to the previous controls, or other items in which despite recording observations their situation (score) improves in relation to the months previous.
In the graphical case it can be observed that although the Quality of the Information of the Warehouse area does not register problems, a drop in the score can be observed. Where does this score come from? It comes from the observations, questionnaires, inventories and calculations made based on the audit.
Conclusions
If to the above we add a software specially designed for this objective, both to calculate the scores and to draw the graphs, and to this is added the possibility of consulting said information on the screen, we are facing a true revolution in terms of audit reports, where the costs of its generation suffer a significant reduction, and where, in addition, the times allocated to its analysis and understanding are significantly reduced, making Internal Audit reports valuable and agile, instead of something heavy and monotonous.
Officials and managers are not only there to read audit reports, they have many other tasks or responsibilities to attend to, therefore the Internal Audit must facilitate their appreciation of them.
Bibliography
Internal audit. A systemic approach and continuous improvement - Mauricio Lefcovich - www.monografias.com - 2003.
