Effective Date:  01/12/1999

Internal Audit Polices and Procedures


Chapter 9 - Coordinating Work With External Auditors

General

IIA Performance Standard 2050 requires coordination of internal and external audit work to ensure adequate audit coverage and minimize duplicative efforts.  Since audit resources are scarce and work in departments can be disrupted by too frequent audits we will coordinate our projects with the Office of the State Auditor and other external review bodies.

The State Auditorís Office performs annual financial statement audits of the University.  Other review bodies, such as the Southern Association of Colleges and Schools, the Joint Commission on Accreditation of Healthcare Operations, and the Environmental Protection agency evaluate programmatic and regulatory issues.  Individual departments or schools sometimes hire outside consultants to study and evaluate aspects of University operations.  Work performed by each of these entities offers opportunities for coordination of efforts.

Coordination of audit effort can be accomplished through:

Our approach to coordinating audit work has three major components:

Long-Range Planning 

As part of the risk assessment and annual update processes, the Director of Internal Audit will contact the State Audit supervisor who is responsible for the Universityís financial statement audit.  The purpose of this interaction is to discuss the long-term plans of the State Auditorís Office and Internal Audit, including major changes in scope, areas of emphasis, audit approach, state or federal audit requirements, etc. and to identify opportunities for sharing or relying on each others work.

The Director will also inquire with members of University management to identify any recent reviews by consultants and or other external groups whose work may be relied upon.

The Director will incorporate the results of these discussions into Internal Auditís long-range audit plans and annual work schedules; copies of these plans and schedules will be provided to the State Auditorís Office.

Individual Internal Audit Projects 

During the preliminary survey phase of a project, the in-charge auditor should contact the State Auditorís staff to determine if the nature and extent of any work performed or contemplated in that area.  If there has been any work by other external review bodies in the area being audited, the in-charge should discuss the nature of these reviews with auditee management and, if possible, review a copy of the related report.  The nature and extent of any work done by an external review body should be considered in establishing the scope and objectives for the internal audit project.

In some cases, the nature of an internal audit project may not provide opportunities for coordination of efforts.  This situation may occur with misuse investigations or when an external review has a higher materiality level or broader focus.  However, collective audit efforts should be coordinated to the extent practical.

Misuse investigations may require special coordination efforts with the State Auditorís investigative staff, Human Resources, the Campus Police, or the State Bureau of Investigation.  This topic is addressed in Chapter 13 of the Internal Audit manual.

External Reviews and Audits

While the University Controller and the Associate Vice Chancellor for Finance are the primary contacts for the State Auditorís staff, Internal Audit will also work with the audit team during the annual financial statement audit.

During the early stages of the annual audit, we will provide the State Auditorís staff with a list of projects performed and copies of audit reports and close-out letters issued since the last annual audit.  We will also make our working papers for these projects available to the State Audit staff for their review.

The Director of Internal Audit will meet with the lead auditors of the State Audit team to discuss the upcoming audit and to provide information about internal audit work that the State Audit team should consider relying on.

As long as annual work schedules permit, we will also provide a limited number of hours of direct assistance to the State Auditorís Office.  A staff member from Internal Audit will be assigned to work with the State Auditorís team during the annual audit and will perform tasks, such as inventory observations or substantive and compliance testing, assigned by the State Audit supervisor.
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