19+ Sample Internal Audit Checklists

What Is an Internal Audit Checklist?

Every human being is capable of self-improvement. We frequently look back on our actions in the past, scrutinizing, examining, and evaluating their appropriateness and righteousness. We consistently do so to improve our behavior in front of society the next time we encounter it. Humans’ social nature enables them to organize and act as a unified entity in connection with that. Thus, when they work together as a single entity, they bring the proclivity and obligation to improve the organization collectively. An internal audit checklist can assist in achieving meaningful results by promoting effective audit planning, regardless of whether you’re auditing a specific management system or simply updating an internal audit procedure.

It aids in audit planning, reporting, and problem resolution. This checklist provides concise, well-documented information that will save time and money in the long run. According to research, the ever-expanding collection of technical tools provides internal auditors with an ever-increasing opportunity to add value to their firms. According to new study research, while internal auditors have increased their usage of these technologies over the last nine years, many of them are not taking full advantage of the opportunities given by technology. According to an Internal Audit, Common Body of Knowledge study report from The Institute of Internal Auditors Research Foundation, 38 percent of chief audit executives said their firms adopt technology at an “appropriate” level or higher. Over a quarter (23%) of cases reported their firms mainly relied on manual systems and processes in internal audits. 

Benefits of an Internal Audit Checklist

When everything is handled in-house and without the assistance of a professional consultant, an internal audit checklist is a helpful tool to consider. Utilizing a template has several appealing advantages for anyone who already has a lot on their plate. If you’re interested, here are a few additional advantages.

They Are Economical: Creating all of the documentation required for a quality management system can be time-consuming. Even something as simple as an annual checklist can consume a significant amount of your time and energy. You must conduct extensive research into all of the requirements that your business must adhere to create a comprehensive checklist. All of those requirements are already included in a template, saving you time and money.Make Improvements: If you already own an internal audit checklist but aren’t entirely satisfied with it, reorganizing it using a template is a good idea. Comparing the template to your list may help you identify the necessary changes to make it even better.User-Friendly: Implementing and maintaining Quality Management Systems can be difficult, especially when it comes to paperwork. When creating a checklist for internal audits, templates will ensure that the audit system is highly user-friendly from start to finish. Anyone who needs such a checklist will have all they require at their fingertips.Meets All Requirements: When creating a checklist, you want to ensure that you include everything that needs to be considered. A well-designed template will consist of all requirements, eliminating the guesswork about whether you missed anything.Security: Internal audits examine your cybersecurity environment, for example, by counting all your digital devices and determining whether your policies properly secure them. Additionally, they scan your digital systems and networks for vulnerabilities and make recommendations to close gaps.Risk reduction: Internal audits evaluate all identified risks to your enterprise and determine whether risk mitigation measures are effective. Where they are not, audit reports will detail the steps necessary to rectify the situation.Strong internal controls: Your internal auditor’s first responsibility is to assess your company’s control environment. Internal audits examine your internal controls, including actions, systems, processes, and monitoring, to ensure that they are well-designed, implemented, and operating as they should be, regardless of who is in charge of which function.

Types of Internal Audits

While a substantial portion of internal audit is concerned with internal controls over financial report within the organization as they relate to generally accepted accounting principles that affect their financial statements. Numerous organizations also recognize the value of conducting assessments or audits in areas other than accounting or finance. Compliance, environmental, information technology, operational, and performance audits are just a few of these critical areas.

Compliance Audit

A compliance audit is an examination of an organization’s compliance with regulatory requirements. Audit reports evaluate the strength and thoroughness of compliance preparations, security policies, user access controls, and risk management plan procedures for a compliance audit.

Environmental Audit

Environmental audits are a type of evaluation used to identify gaps in environmental compliance and management system implementation and associated corrective actions. In this way, they perform a function analogous to financial audits. Environmental audits are classified into two types: compliance audits and management system audits. Compliance audits are the most common type in the United States or within multinational corporations headquartered in the United States.

IT Audit 

An IT audit evaluates an organization’s information technology infrastructure, applications, data use and management, rules, procedures, and operational processes against recognized standards or norms. Audits determine if the policies in place to safeguard information technology assets are effective and consistent with the organization’s goals and objectives.

Operational Audit 

An operational audit assesses a company’s operating activities daily and on a larger scale. An active audit dives are more profound than other audits, which may focus on a specific department or the company’s finances. It provides a comprehensive overview of all internal departments and processes that make up a company’s operations. In contrast to a regular audit, an operational audit investigates how a firm performs its business to improve overall performance. External specialists or an internal audit team could undertake operational audits.

Performance Audit

A performance audit is an unbiased examination of an organization’s operations to see if specific programs or services meet their objectives. Because most government entities receive federal funds, performance audits are commonly connected with government agencies at all levels. 

Process To Complete an Internal Audit Form

Internal audits assist organizations in achieving their corporate goals by monitoring the consistency of internal business practices. Internal audits ensure that organizational policies and procedures are followed and alert management to policy compliance gaps. With this, maintaining a consistent audit practice, on the other hand, can assist organizations in managing performance and ensuring consistent product quality. The following are some guidelines for completing an Internal Audit Form.

Organize all data and information.

Compile all data and information gathered from the organization’s various departments. These data and information can be found in multiple reports, including risk assessment reviews, production reports, and employee surveys. These statistics and information provide insight into how the organization performed as a whole during a specified time. Having a compiled list enables you to summarize each piece of information into pertinent facts and statistics, allowing you to write an Internal Audit Report that is concise and to the point.

Download a template for an internal audit form.

It’s time to prepare your Internal Audit Report after combining all of the data and information you’ve gathered from other departments’ reports. To begin, choose from the samples offered in this article to download an Internal Audit Form Template. Downloading a template allows your company to use a consistent format for their Internal Audit Reports while saving you time.

Fill in the blanks on the Internal Audit Form Template.

After downloading the Internal Audit Form Template, edit it immediately. Substitute your organization’s information for the prewritten information in the template. Then, compile all of the data and information you’ve gathered. Finally, include the auditors’ names and have them sign the document. Additionally, remember to edit the template using the editing software compatible with the template’s file format.

Print the Internal Audit Form once it is completed.

After completing the form, you can save it to your computer or print it using your office printer. By storing a soft copy of the Internal Audit Form on your laptop, you can quickly access it with your preferred time and date that you need it. Similarly, having a printed copy of the Internal Audit Form on hand enables you to conduct an on-site inspection.

Submit the Internal Audit Report

Directly after completing and printing the form, submit the Internal Audit Report to Senior Management. Internal audit reports provide Senior Management with a snapshot of the organization’s performance and plan for future improvements.

How To Make an Internal Audit Checklist?

Internal auditing is similar to personal evaluation on a grander scale. Its main goal is to improve an organization’s performance by resolving problems and avoiding them from occurring, and identifying and correcting control and process inconsistencies. An Internal Audit Checklist enables firms to improve by providing information on how they fared over a specific period. The stages for creating an Internal Audit Checklist are outlined below.

Step 1: Provide the Major Topics

Outline the audit checklist’s major subject headings to assist in visualizing the audit’s critical components. These subject headings may include information about an organization’s management, finance, and operations. These can be related to the various features of the business on which you should concentrate your audit efforts. To create the checklist, you must use a suitable program, such as a spreadsheet application or simply a paper and a pencil.

Step 2: Make a list of the subheadings.

Now is the time to organize your checklist by placing the subheadings beneath the primary subject headings. You can begin by categorizing management subjects under the management subject title, including employee development plan and management. To aid in auditing the planning procedures, make a list of subheadings such as sales plan, pricing policy, and annual budget. This section will assist in ensuring that a sales plan is in place, a pricing policy is in place, and the business is operating within a reasonable budget. To escort an audit connected to personnel management, you can include subheadings such as employee expectations, job descriptions, and punishment processes.

Step 3: Place Financial Functions-Related Topics

Outline the topics and functions that fall under the finance subject heading. You can include issues relating to accounting practices as well as business financial planning. This division is typically responsible for determining the type of accounting system used and ensuring that the various accounting statements are prepared accurately. It then verifies that the owner comprehends the significance of all of these statements.

Step 4: Plan Your Business’s Operations

Put the functions that are associated with the business’s operations under the “operations” subject heading. This will include production-related topics as well as marketing and promotion. For example, you’ll want to evaluate supplier relationships, inventory control procedures, and training programs when it comes to production. Under the marketing and promotions subheadings, you must address competitors, customer needs, and promotion plans.

Step 5: Include Any Additional Information

Ensure that you take advantage of available assistance for small businesses. You can use the audit checklist provided by the United States Small Business Administration. It can serve as a guide for developing your business’s specific list. Be sure to read it thoroughly for guidance and to include any particular details, such as those about quality and safety requirements, on your audit checklist.

Step 6: Shift your viewpoint.

Auditors are skilled in performing audits and aligning processes to regulatory requirements or industry standards to assist your operations in achieving higher quality outcomes and, as a result, producing higher quality products and services. This does not indicate that they are specialists in every field. It’s important to remember that the auditors’ purpose is to match your procedures with specific legislation or standard. They want you to be compliant, but they may need your help and collaboration to align your department. Only you know everything there is to know about your tactical business areas. During the interview, try to be receptive to an internal auditor’s line of questioning. This can assist you in identifying ways to align your processes with high-quality standards better and, as a result, meet your continuous improvement objectives. You may discover that you’re too close to your circles to explain the procedure adequately, and your documented process thus fails to provide a high-level overview of the steps.

FAQs

What do audit procedures entail?

Audit Procedures are a set of steps used by auditors to gather enough audit evidence to make an opinion on financial statements, determining whether they accurately reflect the organization’s financial situation. There are two types of procedures: substantive and analytical.

Who is in charge of appointing an internal auditor?

An internal auditor is a company’s auditor who the company’s shareholders appoint to perform internal auditing. An internal auditor is usually a company employee. However, occasionally, firms appoint an external expert as an internal auditor.

Who appoints a new internal auditor?

Internal auditors are appointed and compensated by management. The internal auditor is replaced solely by the administration, whereas the shareholders exclusively replace the statutory auditor.

Internal audit checklists are used to ascertain the extent to which your organization’s quality management system complies with regulatory requirements. This is accomplished by determining whether those requirements have been implemented effectively and are being adequately maintained. The checklist will help you choose the current state of your management system, identify any weaknesses, and provide corrective actions for improvement. With this in mind, if you’re considering creating an Internal Audit Checklist, I recommend that you follow the steps and guidelines outlined above to ensure a smooth processing flow.