Beyond Audit

Your game plan for strategic success in today’s remote audit department

Beyond Audit is your guide to taking advantage of this unique moment to review and enhance your audit methodology to improve execution, operations, and audit product. Change has been thrust upon the audit industry, and every company must adapt to business interruptions and remote work environments. Now is the perfect time for audit departments to step back and turn a critical eye on their own operations. We have an opportunity to identify new ways of increasing product offerings and building more effective and efficient operations, ultimately creating better results for our partners and clients.

This book will take you from a foundational understanding of the business environment through to a reflective review of your own operational effectiveness and efficiency. You’ll gain access to the Audit Risk Barometer (ARB), an innovative self-assessment tool that scores audit department strengths and opportunities for improvement. This book also includes a detailed methodology for working with your business partner to ensure clear identification of business objectives. You’ll also learn how to identify “true process risks” to ensure that testing remains focused and adds value. Finally, you'll learn critical skills and team development ideas for every level.

• Gain a fundamental understanding of today's business environment and how traditional and remote auditing fits into the new business puzzle
• Use the exclusive Audit Risk Barometer to conduct a valuable self-assessment and uncover your team’s strengths and weaknesses
• Learn how to effectively and efficiently work with your business partner to identify objectives and value-add opportunities
• Access online resources, including video summaries and interactive tools to revamp your audit department

Beyond Audit incorporates links to online video summaries, templates mentioned throughout the book, interviews with experienced professionals, and an audit tracking software tool. This book is an enormously valuable resource for audit teams of any size and shape.

Preface xi

Acknowledgments xv

About the Author xvii

Chapter 1: What Happened 1

Audit Execution Challenges 2

Understanding Your Role 5

Critical Meeting Keys 7

Chapter 2: Understanding the Remote Approach 11

Traditional versus Remote Audit 11

Recognizing the Challenges 14

Responsibility Assignments 18

Communicating Critical Information 19

Audit Planning 22

Audit Fieldwork 24

Audit Reporting 25

Audit Wrap-Up 26

Chapter 3: Marketing the Internal Audit Department 29

Creating Your Audit Brand 29

Defining Internal Audit 30

Internal Audit’s Three Pillars 32

Explaining the Audit Phases 34

Dispelling the Myths 38

Chapter 4: Building an Effective Audit Team 41

Beyond Audit Learning Map 42

Skills Focus in the Remote Environment 44

Remote Business Partner Meetings 49

Agendas Drive the Meeting 50

Audit Status Memos 53

Remote Auditor Skills Profile 54

Beyond Audit Development Plan 59

Chapter 5: The Methodology – Objective Recognition 61

Improving the Audit Process 61

Beyond Audit – ORC Model 62

Identifying the Business Objective 66

Business Objective Identification Challenge 69

Business Objective Identification in a Remote Audit 70

Business Process Risks 73

Business Process Controls 75

Completing the Audit Planning 77

Chapter 6: Audit Fieldwork 79

Fieldwork Communication 82

Fieldwork Responsibilities 84

Workpaper Requirements 85

Beyond Audit – Baseline Workpaper Components 86

Sufficient Evidence 91

Workpaper Self-Review and Keys 93

Beyond Audit – Top 10 Keys to Managing Fieldwork 93

Chapter 7: The Methodology – Partner Results 101

Communicating Audit Results 101

Understanding the Audit Report Phase 102

Audit Report Foundation 104

Beyond Audit – Issue Discussion Keys 105

Audit Reporting throughout an Audit 106

Effective Internal Audit Report Components 107

Audit Report Challenges 119

Chapter 8: Internal Audit Value 121

Defining Real Action 122

Steps in Creating an Action Plan 125

Action Plan Adoption Process 130

CA Methodology Overview 132

Action Plan Tracking 137

Chapter 9: Internal Audit Dashboards 141

Dashboard Defined 142

Beyond Audit – DDIO Methodology 144

Audit Dashboard Functions 154

Audit Dashboard – Lessons Learned 159

Chapter 10: Communication Focus 161

Understanding the Communication Model 162

Message Delivery 165

The Value of Listening 168

Beyond Audit Advisor Approach 169

Internal Audit Relationships 173

Beyond Audit – Internal Audit Marketing 178

Beyond Audit – Meeting Facilitation Keys 179

Chapter 11: Analyzing Internal Audit 181

Beyond Audit – ARB Methodology 182

ARB Conclusion 197

Chapter 12: How Good is Audit? 199

Introducing the Top Ten 200

Creating an Action Plan 220

Chapter 13: Focused on Learning 221

Remote Learning 222

Index 227

ROBERT L. MAINARDI is the Founder of Beyond Audit (formally Mainardi & Associates), a firm that develops, facilitates, and administers custom training programs in auditing and risk. He was formerly a Vice President with Penn Mutual Life Insurance where he managed audit operations, staff, and business relationships for the life, brokerage, investment, and trust and mutual fund businesses.

Change has been thrust upon the audit industry and every company must adapt to business interruptions and remote work environments. Now is the perfect time for audit departments to take a step back and cast a critical eye on their own operations, seeking ways to improve product offerings and identify efficiencies.

In Beyond Audit: Auditing Remotely and Delivering Value, accomplished audit leader and author Robert L. Mainardi delivers a detailed guide of how audit departments must adjust their audit approach and execution in the post-COVID-19 business landscape. It emphasizes that a different skill focus for audit teams is necessary and that those teams must develop and change as they learn to audit from remote locations, while retaining their ability to strategically and effectively identify the most critical controls to be examined.

The book will take auditors from a foundational understanding of the current status of the new business environment and walk them through a reflective review of their own operational effectiveness and efficiency. It includes a detailed methodology to be followed, from planning to action item development, to ensure clear identification and agreement with the busines partner of the business objectives and corresponding “true process risks.”

You’ll learn about the Audit Risk Barometer, an innovative self-assessment tool that scores and scales individual audit department strengths and opportunities for improvement. You’ll also find links to online video summaries, interviews with experienced professionals, template explanations, technique comparisons, and recommendations for topics discussed in each chapter.

Perfect for audit teams of any size and shape, Beyond Audit is an invaluable resource for anyone seeking to gain a fundamental understanding of today’s business environment and how traditional and remote auditing fits into the new business puzzle.

A One-Stop Game Plan for Strategic Success in the Remote Audit Environment

Beyond Audit: Auditing Remotely and Delivering Value offers auditors a complete and insightful set of tools to improve your audit methodology and enhance execution, operations, and audit product. You’ll learn to identify new ways of increasing product offerings and building more effective and efficient operations, creating better results for your partners and clients.

Beginning with a foundational overview of the new business environment (post-COVID-19) and moving you through a reflective review of your own operational efficacy and efficiency, you’ll find a detailed methodology for working with your business partners to ensure clear identification of business objectives.

You’ll also discover the Audit Risk Barometer, an innovative self-assessment tool that scores your audit department’s strengths and weaknesses, revealing new opportunities for improvement. In addition, you’ll discover how to identify “true process risks” to make sure your testing remains focused and adds value, as well as critical skills and team development ideas for audit groups of all shapes and sizes.

Ideal for audit teams of any size or in any industry, Beyond Audit delivers a foundational understanding of the modern, post-COVID-19 business environment and shows you how traditional and remote auditing fits with the objectives and goals of your business partners.