ACCOUNTING 420/620

REVIEW FOR EXAM 2

Exam 2 will be cumulative. Use Review for Exam 1 for topics covered on that exam.

ALLOCATING RESOURCES TO THE INTERNAL AUDIT

1. Budgeting
2. Allocating human resources

FINDINGS AND RECOMMENDATIONS

1. Root Cause Analysis
2. Audit Findings - Five Components:
1. Condition/Description
2. Criteria or Expectation
3. Effect/Risk
4. Cause
5. Recommendation
3. Four types of recommendations

REPORTING THE INTERNAL AUDIT

1. Structure of audit report often includes:
1. Cover
2. Transmittal Letter – includes:
i. Background Information
ii. Purpose Statement
iii. Scope Statement
iv. Nature of Findings or Brief Opinion
v. Reply (or Other) Expectations, if any
3. Table of Contents
4. Executive Summary
5. Detailed Findings/Recommendations
6. Optional - Engagement client’s views about engagement conclusions
or recommendations may be included
7. Appendices, Exhibits and Attachments
2. Interim reports
3. Quality of Communications - Communications should be:
1. Objective
2. Clear
3. Concise
4. Constructive
5. Complete
6. Timely

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 4. Disseminating results
5. Clear writing techniques

FOLLOW-UP REVIEWS AND AUDIT EVALUATION

1. Implementation Guide 2500
2. Follow-Up Roles for Auditor, Audit Client, and Executive Management
3. Keys to Follow-Up Success
1. Discriminating between responses to symptoms and causes
2. Guidelines for documenting follow-up reviews
3. Guidelines for rejecting an audit client's corrective measures
4. Audit Evaluation
1. Audit Critiques
2. Audit Team Member Evaluations

COMMUNICATION
1. Factors that affect the communication planning process:
a. Audience
b. Objectives
c. Environmental Setting
d. Noise
e. Timing
f. History
2. Message Characteristics
a. Method
b. Trait (including three types of credibility)
c. Sequence
d. Substance
e. Emphasis
f. Polish
g. Feedback

READINGS
“It’s All in the Delivery,” Internal Auditor, Dec 2016, 42-47.
“Write Smart,” Internal Auditor, Apr 2008, 64-73.
“Planning for Follow-Up Testing,” Internal Auditor, Jun 2013, 15-19.
“The Value of Postmortems,” Internal Auditor, Aug 2014, 17-19.
“Why Follow Up?” Internal Auditor, Dec 2014, 18-19.

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AUDIT PROJECT

You are responsible for being knowledgeable about your audit project.

GUEST SPEAKER

Kelly Nault, MGM Resorts International

NOTE: THIS STUDY HELP WAS DESIGNED TO GUIDE YOUR STUDY EFFORTS.
IT IS NOT INTENDED TO BE A LIST OF EVERYTHING ON THE EXAM.