Importance of Follow up procedure in Internal Audit

CA Amrita Chattopadhyay | Last updated: 09 February 2023

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Quick Summary

Internal audits provide assurance on risk management, controls, and efficiency. However, recommendations may be delayed due to resource needs or changing methodologies, necessitating a follow-up audit. This process verifies that agreed-upon suggestions are effectively implemented, preventing the entire audit from becoming redundant. A robust follow-up ensures auditees remain alert and that audit findings are addressed, ultimately increasing the respect and value of the internal audit function within an organisation.

Internal audit is a process which provides assurance to the management regarding companys risk management, control procedures and their operational efficiency. The recommendations provided by the Internal auditor and which are agreed by the management may not be implemented during the course of audi

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FAQ :

A follow-up procedure is necessary because recommendations agreed upon during an internal audit may not be implemented immediately due to various circumstances, such as the need for additional resources or different methodologies. The follow-up ensures these recommendations are effectively actioned.

The most common reason audit findings are not implemented is that they are not given sufficient priority by managers or responsible individuals who are often busy with daily commitments.

A follow-up audit should be an important element of planning for the next internal audit cycle. It's a backward-looking process that re-examines reviewed controls and recommendations to check their implementability in the current scenario.

The follow-up procedure involves testing current period data based on previous recommendations, discussing and evaluating the implementation of these recommendations, or confirming that appropriate steps have been taken.

Yes, during a follow-up procedure, an internal auditor may identify new risks that can then be included in the planning for the next audit period.

A follow-up audit report makes the overall internal audit documentation more 'lively' by ensuring that issues and observations are not forgotten after the initial audit, keeping auditees alert and aware.