Preliminary Survey by ert554898

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									Preliminary Survey


               Lectured by Dr. Siriluck Sutthachai
                          Accounting Department
                  Faculty of Management Science
                           Khon Kaen University
                             Khon Kaen, Thailand
     Preliminary Survey
   Objectives of preliminary
    survey
       Getting familiar with the
        departments
       Understanding business
        environment
       Knowing management styles
       Initially testing the reliability of
        work flow
Preliminary Survey

   Why we have to do the preliminary survey
       Scope audit program
       Gaining background of nature of work that is
        going to be audited
       Indicate strengths and weaknesses of business
        activities audited
       Gather information for audit planning
    Preliminary Survey
   Information sources
    o   Permanent files       o   Observation
    o   Current files         o   Work manual
    o   Company policies,     o   Budget and key
        pronouncement and         performance indicators
        regulations
                              o   Interviews and exchange
    o   Financial reports         opinions
    o   Performance reports   o   Meeting minutes
    o   Organization charts
    Preliminary Survey

   Initial study
   Documenting
   Meeting
   Gathering information
   Observing
   Flowcharting
   Reporting
       Initial Study

   The permanent file gives an overview of what the
    auditors can expect.
   Prior working papers can show how other auditors
    approached the assignment.
   Existing literature on the subject provide auditors an
    insight information about the subject to be audited.
   Organisation charts and statements of authority and
    responsibilities show the authorities of each position.
Documenting

   Reminder list helps to plan what to do for
    each step of auditing.
   Table of Contents will help auditors to
    discipline their job.
   Cost reductions list helps to plan ahead some
    processes that can be reduced in order to
    decrease costs for a company.
Documenting

   Records of impressions check list will help
    to assess people working in the audited
    processes.
   Questionnaires can be produced after the
    initial study. This will help auditors to
    discuss with managers at the first meeting
    before get into more details for each audited
    process.
Meeting

   Arrangements—the time and place should be
    arranged.
   Interviews
       Preparing—learn about the auditee before meeting.
       Scheduling—phone the interviewee for the interviews.
       Openning—tell the interview purpose and how the results
        will be used.
       Conducting—communication skills are needed.
       Closing—stop the interview when appropriate.
       Recording—write or record the interview for later review.
    Gathering Information
   Information to be gathered should be involved:
        Planning e.g. copies of policies, directives and
         procedures.
        Organizing e.g. organization charts and position
         description.
        Directing e.g. operating instruction to employees and
         determine authority and responsibility
        Controlling e.g. written standards and performance
         guides, review system and work flow.
        General e.g. unbudgeting? Cumbersome
         organisational structure.
Observing

   Observation and inquiry can lead to
       Determine objectives, goals, and standards.
       Assess controls to achieve these aims.
       Evaluate risk.
       Identify controls to minimize risk.
       Make statistical risk assessments.
       Assess management style.
Flowcharting

   Flowchart shows how
    the processes work.

   It should be
    standardised in the
    auditing department.

   It helps to indicate
    critical point that may
    need to be addressed.
    Reporting

   Survey report should
    contain both positive and
    negative findings.
   The report will help in
    preparing audit program.
    And auditors should suggest
    audit steps and the reason
    for them.
Reporting

   Survey reports should be
    produced and reported to:
       Head of internal auditing
        department to examine
        important issues and
        problem areas and make a
        decision if further
        investigation is needed.
Reporting

   Survey reports should be
    produced and reported to:
       Management informally
        in order to report some
        recommendations that
        can be addressed
        immediately and thus no
        further auditing.
                                  Case Study
Management Science Library
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