Write a program for auditing compliance of a law, regulation or policy

| March 31, 2017

Question
Write a program for auditing compliance of a law, regulation or policy. It should include an objective, scope and audit procedures. Select a law, regulation or policy that a company must be in compliance with from any industry. Research what is required for a company to be in compliance. Narrow down the requirements to a specific section of the law, regulation or policy to ensure the audit steps will be less than 20.

The objective is formed by first determining what management is trying to acheive and then restating their objective by adding “To ensure…” or “To determine if…”. In a compliance audit, management is trying to be in compliance with a law, regulation or policy. The auditor will ensure they are doing what is necessary to be compliant. Word the objective to the specific section being audited, not the entire law, regulation or policy.

The scope defines the section of law, regulation or policy being audited. It should include the time period of the audit (last 12 months, quarter, 2 years). what will be sampled and the sample size. Sample size may be made up but consider what you think would be reasonable to be competent and sufficient.

The audit procedures or steps should be specific and detailed clearly for an auditor to pick up and understand what action must be taken. An auditor does not perform management work, make management decisions or supervise client personnel so the steps are not a procedure manual of what management should be doing. The steps are written to ensure that each of the procedures that management should be doing is being performed. Do not use generalities such as, “Ensure the document was completed properly”. The audit steps must define what properly is and what the auditor is looking for. A minimum of 10 steps is required.

The audit program must be your own work and not an altered program downloaded from the internet.

AUDIT PROGRAM COMPONENTS
I.
Audit Objective
Development of the Audit Objective
1 Departmental objectives: Why was the department created?
2 Control requirements: What controls are in place in the department to ensure its objectives
are met?
3 Audit Objective: Why are we auditing this department? Should be a combination of
departmental objectives and control requirements.
To ensureā€¦.
To determineā€¦
II.
Audit Scope
What is the Audit Scope
a) Establishes parameters or boundaries for the audit
b) Identifies:
Area to be audited (department or function)
Timeframe
Sample size (volume or dollars)
III.
Audit Program Steps
Guidelines for Preparing Audit Programs
a) Review audit program, if any, from prior audit. Determine what was covered, how it was
covered, in what depth and with what results.
b) Perform a preliminary survey to determine objectives of the operations, existing systems of
internal control and apparent risks.
c) Review internal audit literature which addresses the operation to be reviewed and may
provide guidance to conducting the audit.
d) The objectives of the operation under review should be carefully stated and agreed to by the
client.
e) Programs should be tailor-made to the audit assignment unless compelling reasons dictate
otherwise.
f) Work steps should include positive and clear instructions. They should not be stated in the
form of questions.
g) If possible, the audit program should indicate the relative priority of the work steps. Thus,
the more important parts of the program will be completed in the allotted time.
h) Audit programs should be flexible and permit the use of initiative and sound judgment in
deviating from prescribed procedures. Audit supervisors should be informed promptly of
major deviations.
i) Programs should not be cluttered with material from sources readily available to the staff.
Incorporate by reference, where feasible.
j) Unnecessary information should be avoided. Include only what is needed to perform the
audit work. Excessive detail wastes the time of those who prepare and read the programs.
k) Audit programs should bear evidence of supervisory approval before they are carried out.
Significant changes should also be approved in advance.

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