IT Audit Follow-up: Assessing Recommendation Resolution – Part III

IT auditor follow-up activities has been defined “as a process by which they determine the adequacy, effectiveness and timeliness of actions taken by management on reported engagement observations and recommendations, including those made by external auditors and others“. Therefore, a follow-up process is established to enable reasonable assurance that each audit conducted by an IT auditor provides optimal benefit to the entity; through requiring that approved suggestions arising from audits are implemented in accordance with management’s intentions for the undertakings or that management recognizes and acknowledges the risks inherent in delaying, or not implementing, proposed solutions.

“View Part I of the IT Audit Follow-up: Assessing Recommendation Resolution series here“

IT Audit Follow-up: Assessing Recommendation Resolution – Part II

If management’s proposed actions to implement or otherwise address reported recommendations have been discussed with, or provided to, an IT auditor; designed remedial actions should be recorded as a management response in a final IT audit report. Whether an IT auditor is engaged in external or internal reporting; after formal audit results communication, follow-up is commonly the next IT audit process phase. Procedurally, after distributing the final audit report — with findings, recommendations and client responses — the IT auditor should request and evaluate relevant information to conclude whether appropriate actions have been taken by management in a timely manner for all documented findings included in the final audit report. However, IT audit follow-up activities can be an extension of an engagement or a separate engagement, and may only include agreed-upon procedures.

“View Part I of the IT Audit Follow-up: Assessing Recommendation Resolution series here“

IT Audit Follow-up: Assessing Recommendation Resolution – Part I

While management is responsible for addressing assurance engagement findings and recommendations as well as tracking resolution status; audit is responsible for establishing policies, procedures, standards and rules for follow-up to determine whether previous findings and recommendations are adequately addressed as well as considered in planning future engagements. In this matter, IT auditors should comply with generally accepted audit follow-up procedures addressing the risks ordinarily associated with the audit area. Contextually, an appropriate amount of follow-up is necessary to assure the effectiveness of the corrective action process and to reestablish confidence in the item or service assessed. Therefore, the audit follow-up process normally includes carrying out sufficient, timely follow-up procedures to verify that management actions address weaknesses promptly.

IT Audit Reporting: Communicating Results – Part VIII

IT auditors, like all auditors, are responsible for ‘communicating results to interested individuals.’ Interested individuals can include other members of the audit team, who must integrate the IT auditor’s findings with other aspects of the audit, as well as the client. Commonly, the audit purpose for reporting results is providing constructive feedback to management. However, in many cases, management personnel reviewing the audit report are not completely knowledgeable of the audit area’s IT services and associated terminology. For this reason, IT audit reports should be written to accommodate the lowest expected expertise level. Where readability risk is marginalized, IT audit reports will typically be readily received when they create managerial awareness regarding generally accepted information criteria (effectiveness, efficiency, confidentiality, integrity, availability, reliability and/or compliance) and induce corrective actions for detected control system weaknesses.

“View Part I of the IT Audit Reporting: Communicating Results series here“

IT Audit Reporting: Communicating Results – Part VII

Upon acknowledgement of final audit report delivery to identified recipients, the IT auditor should await responses from key audit area personnel, as stipulated in the entity’s audit charter or engagement letter. Once all client responses have been received or the stated response deadline has been reached, the IT auditor should distribute the final audit report to appropriate personnel, thus concluding the IT audit reporting phase.

“View Part I of the IT Audit Reporting: Communicating Results series here“

IT Audit Reporting: Communicating Results – Part VI

The final audit report should clearly identify ‘gaps’ in controls and the source of the vulnerabilities. Of the potential vulnerabilities documented in the audit report, it is importance to identify any significant, or material, risks. It must also include recommendations to address the issues identified. Lastly, the executive summary of the final audit report must elaborate on the ‘state of controls’ within the audit area. In particular, weaknesses need to be clearly communicated to enable management by exception.

“View Part I of the IT Audit Reporting: Communicating Results series here“

IT Audit Reporting: Communicating Results – Part V

Once the draft audit report is generated, it must be reviewed by key IT managers as well as key business managers. To facilitate this essential audit activity, the IT auditor can contact selected key audit area personnel for scheduling a ‘closing conference.’ This conference provides an opportunity to review the audit process, discuss concerns, and modify audit report responses. Thus, conference attendees adjourn with a collective understanding of the final audit report’s content.

“View Part I of the IT Audit Reporting: Communicating Results series here“

IT Audit Reporting: Communicating Results – Part IV

Generally, following audit area findings assessment completion and ensuring appropriate working papers retention, an IT auditor documents the draft audit report based on auditing standards and guidelines. Subsequently, the draft audit report is typically submitted for approval by the next higher audit management level. Specific organization, intended recipients, and any circulation restrictions should be identified in this draft audit report.

“View Part I of the IT Audit Reporting: Communicating Results series here“

IT Audit Reporting: Communicating Results – Part III

Through an IT auditor’s efforts, audit findings are facts generated which directly support and evidence conclusions as well as recommendations. Audit findings are also the product of all previously performed audit work related to the audit area under examination. Each finding form should be reviewed by an IT auditor for accurate as well as factual: criteria, condition, cause, possible effect(s) and recommendation(s). Furthermore, inconsistencies and departures from applicable accounting principles, discovered during the IT audit, should be reviewed with a qualified financial auditor.

“View Part I of the IT Audit Reporting: Communicating Results series here“

IT Audit Reporting: Communicating Results – Part II

The process utilized to ascertain ‘the degree of correspondence’ between assertions, or direct subject matter, and established criteria for IT audits is similar to that employed for manual audits; yet, slightly more complex. The process is similar because with these audit types, ‘the degree of correspondence’ requires objective and/or subjective judgment by the auditor as to what constitutes material noncompliance in the control system or error in information. The process is more complex for IT audits because the control system is commonly more sophisticated, and because it is generally more difficult to ascertain whether computer programs and data files provided to the auditor are those actually used; or bogus copies not actually invoked by the entity’s technology under examination. Consequently, to ensure an appropriate IT risk scoring, preceding audit report preparation, IT audit area findings analysis is performed.

“View Part I of the IT Audit Reporting: Communicating Results series here“