The Anatomy of an Audit Part 2- Fieldwork

December 3, 2018

After planning, audit fieldwork can start. The audit team is delegated specific tests to perform and the fieldwork commences. Fieldwork involves gathering evidence to perform audit procedures. All team members should know and understand their assigned tasks, time allocated by task or project and applicable client (auditee) contacts.

Gathering Evidence

Planning is so important to ensure that all documents, reports, information and employees are available during the audit. The work should be performed in sequence per the audit program to help prevent delays in performing the audit. Unfortunately, in reality there is often pushback from the auditee or employee(s) being audited. These stoppages must be cleared up without delay. If the auditee does not cooperate, then the auditor should escalate to their superior to resolve the issue. Most delays come from waiting for the client or auditee, and these delays should be monitored and addressed to minimize disruption. If these delays are not properly managed, the auditor will start several cycles or tests without completing them. This situation creates a mass of incomplete cycles, causes a backlog of workpapers for the reviewer, and prevents timely completion of audit work.

Most delays come from waiting for the client or auditee, and these delays should be monitored and addressed to minimize disruption.

Audit Procedures

The auditor will perform procedures based on the type of audit and work scheduled. There are various types of fieldwork that can be performed. These procedures include:

Data analytics of the entire population of data being tested. Analysis should actually be performed before the audit starts and is used as a way of selecting the sample to be tested.
Observation of the situation or the environment being audited looking for gaps or weaknesses in the existing policies, procedures, or structure.
Inquiry with employees and management on what is actually happening as opposed to what should be happening.
Detailed or substantive testing whereby a sample of documents or transactions is selected and tested for attributes, mainly for validity, accuracy and completeness.
Control testing of processes or procedures performed by the client that may include authorization, review, information processing, physical security, segregation of duties, etc.
Application testing of transactions to determine whether the system controls are working. Positive testing determines if an application is working as expected, while negative testing attempts to execute a transaction that shouldn’t be allowed. If the transaction goes through, then the control or system control is not working properly.

Documentation

It is vitally important to ensure that tests are properly documented in the workpapers and that supporting documents are retained. All workpapers and supporting documentation should be referenced to the audit program to ensure all audit tasks were completed. The supporting documents should include evidence of testing and all exceptions or findings raised. The audit file should be structured in such a way that anyone can pick up the file and understand the work that was performed.

This concludes the second installment on the anatomy of an audit. We will continue with monitoring and supervision, wrapping up the audit, handling queries, reporting and finalization in the next article.

About the Author

Kingsley Bye

Kingsley Bye has been in the internal auditing space for over 25 years and has a diverse career crossing all sectors of industry in the private and public sector, both in South Africa and the United Kingdom. Kingsley is also a published writer and...
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Kingsley Bye

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The Anatomy of an Audit Part 2- Fieldwork