Internal Audit Manual Template.
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1. Policy & Governance
This section establishes the foundation for internal auditing, defining its mission, values,
and principles.
Internal Audit Charter
Defines the authority, purpose, and scope of the internal audit function.
Ensures auditors have independence and access to necessary information.
Mission & Vision
Mission: To protect and improve the organization’s operations through objective
auditing.
Vision: To be an innovative and trusted audit function.
Guiding Values
The audit team operates with:
Independence & Objectivity – Free from bias.
Integrity & Professionalism – Ethical standards.
Excellence & Innovation – Striving for continuous improvement.
Quality Assurance
Ensures audits meet professional standards.
Defines a successful audit as one that results in improved processes and
effective communication.
Confidentiality Policy
Internal auditors must keep all sensitive information private.
Confidential data should only be shared when legally required.
Unauthorized disclosure is considered serious misconduct.
Independence & Objectivity
Auditors should not audit areas where they have personal connections.
Auditors must disclose conflicts of interest.
Annual independence declarations are required.
Nondiscrimination & Harassment Policies
Emphasizes fairness and respect in the workplace.
Zero tolerance for discrimination and harassment.
2. Audit Planning
This section explains how the audit office prepares for audits.
Annual Audit Planning
A two-year audit plan is created.
The plan is based on a risk assessment that evaluates:
o Financial risks – Accuracy of financial transactions.
o Compliance risks – Adherence to laws and policies.
o Operational risks – Efficiency and effectiveness.
o Reputation risks – Public perception concerns.
o Safety risks – Potential harm to employees and the public.
Audit Universe
Auditors identify which areas or departments to audit.
Factors considered include previous audit results, strategic risks, and
management concerns.
3. The Audit Process
This section explains how audits are conducted from start to finish.
Types of Audits
1. Internal Control Audits – Check if financial safeguards exist.
2. Compliance Audits – Ensure rules and regulations are followed.
3. Financial Audits – Verify accuracy of financial reports.
4. IT Audits – Assess data security and system reliability.
5. Operational Audits – Review resource efficiency.
6. Investigative Audits – Look into fraud or misconduct.
7. Continuous Auditing – Ongoing monitoring using data analysis.
8. Consulting & Advisory Services – Help management improve processes.
Audit Steps
1. Audit Assignment – Directors assign audits to specific auditors.
2. Risk Assessment – Identifies key risks before fieldwork.
3. Opening Conference – Meeting with auditees to explain audit scope.
4. Fieldwork – Collecting evidence, interviews, and data analysis.
5. Workpapers – Auditors document findings clearly and concisely.
6. Audit Observations – Any errors, inefficiencies, or risks identified.
Auditor Timekeeping
Auditors log their working hours to track audit progress.
Time must be reported weekly.
4. Reporting & Follow-up
This section describes how audit results are documented and tracked.
Audit Reports
Reports include:
o Audit Objectives – What the audit examined.
o Findings – Issues found.
o Impact of findings – Impact of the issues found.
o Recommendations – How to fix them.
o Management Response – Auditee’s action plan.
Exit Conference
A final meeting with auditees to discuss findings and proposed solutions.
Auditees can clarify or challenge findings before the final report.
Follow-up Process
Auditors check if corrective actions were taken.
Issues are categorized as:
o Implemented – Fully resolved.
o In Progress – Some actions taken.
o Not Implemented – No action taken.
o Risk Accepted – Management decides not to fix the issue.
Annual Report
Summarizes all audits from the year.
Submitted to the Board of Directors (BOD) by September 30th.
Ensures audit effectiveness and accountability.
5. Personnel & Training
This section ensures auditors are well-trained and professional.
Performance Appraisals
Auditors receive annual evaluations based on:
o Technical skills.
o Adherence to audit procedures.
o Communication skills.
Training & Professional Development
Auditors must complete 80 hours of Continuing Professional Education (CPE)
every 2 years.
Professional certifications like CIA, CISA, and CFE have their own CPE
requirements.
Training may include:
o Workshops and seminars.
o University courses (with tuition waivers).
o On-the-job training.
6. Administrative Procedures
This section outlines the day-to-day rules for auditors.
Use of Computers
Auditors must follow IT security policies.
Audit reports and workpapers are stored securely.
Records Retention
Audit workpapers must be kept for a set period.
Confidential documents must be shredded when no longer needed.
General Policies
Dress code and professional behavior expectations are outlined.
Guidelines for ethics, conflicts of interest, and data security.
7. Appendices
The document includes additional guidelines, such as:
Workpaper Documentation Standards.
List of Personal Identifiers (Sensitive Data).
How to conduct Internal Audit - Beginner guide.pdf
1. Importance of Internal Audits
Internal audits help organizations:
Ensure adherence to processes, policies, and regulations.
Improve operational efficiency and competitiveness.
Identify risks, control weaknesses, and inefficiencies.
Provide valuable insights to management for better decision-making.
2. Steps to Conduct an Internal Audit
1. Prepare an Audit Plan – Define the scope, objectives, and timeline.
2. Set Audit Standards – Follow professional guidelines and industry best practices.
3. Gather Relevant Information – Review documents and policies.
4. Execute and Evaluate Findings – Assess control effectiveness and identify
issues.
5. Communicate Results – Present findings clearly to stakeholders.
6. Implement Action Plans – Take corrective measures based on findings.
3. Step-by-Step Guide
Step 1: Define the Scope
Identify areas to be audited (e.g., accounting, compliance, IT).
Set objectives, processes, and records to be reviewed.
Determine the timeline for completion.
Step 2: Plan the Audit
Set the timeline, goals, and objectives.
Assign tasks to audit team members.
Develop a risk-based approach and establish communication channels.
Step 3: Conduct the Audit
Review processes and documents.
Identify irregularities or weaknesses.
Ensure compliance with industry regulations.
Step 4: Report the Results
Summarize findings, issues, and recommendations.
Propose corrective actions with a timeline.
Submit the report to management and the board.
Step 5: Follow-up
Ensure corrective actions are implemented.
Conduct periodic reviews to track improvements.
Keep audit reports updated for future reference.
