How to shift from ‘common practices’ to ‘best practices’
By Dan Zitting, CPA, CISA, CITP Vice President, Product Management & Design, ACL Services
Audit working papers serve as important reference points for the entire audit lifecycle, providing Chief Audit Executives (CAEs), independent audit firms, and risk and control consultants with a baseline of vital audit documentation and intelligence. Despite their strategic value, many organizations approach this critical audit function with a ‘check-list-type-philosophy,’ driven by tactical and often manual project management processes. Further, standards for exactly what must be included in working papers or how they are prepared are loosely defined, resulting in inconsistent practices and quality issues among audit departments.
As audit capabilities mature and organizations implement different software or computer assisted audit techniques (CAATs) to automate their audit process, a common risk for many organizations is that workflows become overly complex and disjointed. Different workflows and technology solutions exist for different functions of the audit process: audit project management, working papers, data analysis, audit analytics, external review, and reporting.
These factors contribute to a new type of business risk called the Audit Performance Gap – the strategic value that is lost due to inefficiency in the audit management process.
Integrating a fully automated and purpose-built working papers management solution into the audit lifecycle, organizations can break down the silos. Administrative tasks and resources – once spent on managing the working papers process – can be redirected to strategic and valuable audit activities such as enhancing audit analysis techniques, conducting additional audits, evaluating additional organizational risks, or training and up-skilling audit staff.
This paper explores common issues with traditional working papers methods and how to overcome them. It also provides three practical steps for establishing best practices for working papers management and closing the Audit Performance Gap.