Audit working papers pdf

Internal auditors in the university have relevant qualification and experience to influence financial performance. In addition, the independence of internal audit function and management assistance were identified as significant determinants of financial performance in the university.

Challenges including inadequate staff, accommodation, and lack of office space are currently facing internal audit in the university. Finally, management implementation of internal audit recommendation has been found not to be effective. The study concluded that there are effective internal audit practices necessary for influencing financial performance. The challenges associated with internal audit practices limits the extent to which financial performance could be improved.

It is recommended that management of the university should focus on recruitment of internal auditors for the various faculties than upgrading the existing ones. Keywords: Auditing, independence, financial performance.

In both public and private sectors, the suppliers of financial or business resources are normally different from those managing the institutions or businesses. The management of the organisations or businesses are tasked by the owners to report on financial performance of the organisations or institutions.

Agency theory, which is derived from financial economics literature ia part of the positivist group of theories Adams, It maintains that a firm is made up of a nexus of agreement between the providers of resources principals and managers agents who are responsible for utilising for an economic, efficient and effective use of resources under their care.

Again, it is of the view that managers posses more and detailed information than owners and that they would employ effective and efficient means to increase their capital or resources Adams, The public sector embodies a owner-manager principal-agent relationship. The public officers must periodically report to the stakeholders for their performance in regard to the management of resources and the level to which the objectives of the stakeholders have been attained. The stakeholders have no belief in the performance reports that are provided by the management of public organisations and therefore demand for independent report.

The principals are required to ensure that third party authenticate the integrity of financial reporting, compliance and financial performance reports. In conclusion, the functions of audit portray as an important monitory strategy of public financial management and increasingly as an activity for the improvement of public institution financial management.

Auditing today encompasses a wide range of activities, which have different set of objectives. Traditionally, it has been a control mechanism to provide assurance that the government officials or its ministries internal audit and the established legislature external audit , that public funds are received and used in accordance with the required appropriate and established relevant laws and regulations compliance audit and that the government financial performance reports are true and fair and they are prepared from the underlying financial records and represents its financial position financial audit.

It assesses compliance with underlying financial regulations, directives and measures, appraises the efficiency of adopted internal controls; evaluates the value and usefulness with which resources are utilised; evaluates the dependency and credibility of records maintenance and reporting; examines abnormalities; guarantees that resources are brought together and reported and authenticates inventory records and their identity with physical inventory INTOSAL, The Internal audit practice is value added if it achieves its objectives by improving the organization regarding to governance, risk management and internal controls.

The work of internal auditor is not complete until irregularities are rectified and remain rectified Sawyer, Van Gansberghe posists that the effectiveness of internal audit in the public institutions should be measured on the basis of their contribution to the effectiveness and efficiency of dervice delivery, which in turn propels for improved internal audit service.

Chepkorir noted that internal audit assists an institutions accomplish their objectives by putting in place an orderly, controlled approach to review and enhance the effectiveness of risk management, control and governance processes. The internal auditors are supposed to provide recommendations for enhancement in those areas where opportunities or weaknesses are identified. Conversely , the global economic crises Credit crunch has weakened the above all, lessened the credibility of the internal audit units in advancing good corporate governance.

Public sector in all countries is characterised with misappropriation of funds and corruption resulting from feeble internal control system Van Gansberghe, Hence, the motivation of the researchers in assessing the effectiveness of internal audit practices on financial management in the university.

This research will be different from the above mentioned researchers Chepkorir, ; Dawuda, ; Appiah, as it will specifically look at the internal auditing practices in promoting financial management systems in a public university in Ghana. The above researchers Chepkorir, ; Dawuda, ; Appiah, concentrated on management of risks, corporate governance and control practices but not on financial management, thus creating a research gap. This study looks at the internal audit practices on financial management in the university, the role they play in the institution, internal audit and financial assets management and how the impact on financial management, find out the basic financial management control systems and practices in universities and their effects on financial performance and find out the degree to which internal audit recommendations are executed by management.

The top management commitment and support is very necessary and fundamental for the effective internal audit practices. Management support canbe demonstratedfor internal audit by emphasizing the role of the internal audit unit in providing independent and objective assurance by identifying thrust areas that needs improvement in performance quality and also by implementation of the internal audit recommendations.

Management can also support internal audit unit by providing the necessary resources needed by the unit in order to perform its mandated activities. On serious note, internal audit practice is seen as very important as management permits to carry out its mandated activities.

When audit reports are issued and found to be very vital to the certain sectors of the institutions and Progressive Academic Publishing, UK Page 41 www. The findings of the above studies shown that people would appreciate internal audit profession to be very attractive to them and even those who accept and practice internal audit may not perform their duties with high professionalism if they do not see the value added to the overall achievement of an organizational objectives in relation to corporate governance, risk management and controls.

Audits standards and other services relating to audit are documented by the IIA and include; attribute standards, performance standards and implementation standards. In general, current auditing standards recognise that, internal auditors also provide services regarding risk management, corporaporate governance other than financial reports.

The standards require auditors to implement their assigned and mandated responsibilities in accordance with the code of ethnics of the profession. The standards required auditors to carry out their mandated responsibilities in compliance with the code of ethics of the audit profession.

In the performance of internal audit activity in relation to the required criteria for professional practice, the internal audit activity will obviously evaluate and add value to the improvement of risk management, corporate governance and control by the use of a systematic and disciplined approach.

Internal Controls Controls audits are planned to ensure that appropriate controls over systems and software are in place to ensure that internal controls and internal checks are functioning as designed. Where applicable, the standard tickmarks developed by Audit and Management Services should be used. Thought should be given in preparation of working papers to their potential use as exhibits in an audit report.

Working papers are the basis on which the entire audit rests. Since these papers are, in fact, the documentation of the audit, thoroughness in their preparation is essential. Describing the Work Performed. By fully describing the work you have performed in your working papers, you are able to render a complete accounting of the scope and depth of your coverage. Each working paper should identify the following: A.

Your conclusions usually result from selective tests. By clearly showing the scope of the work performed, you are able to support your conclusions and where probability sampling is used, support the projection of conclusions drawn from selective tests to the entire subject area under audit.

In the examination of documents, the scope must identify the size of the sample, the universe from which the sample is drawn, the method of selection, and the basis for these decisions. When sampling methods are used, the sampling plan must be carefully explained.

Working Paper Format 1. The diversity of audit assignment prevents the establishment of a single system or design of working papers to be used. Therefore, a uniform working paper format may not be used but work papers for functional areas such as cash receipts should display conformity in various types of audits. Workpapers may be in the form of paper, tapes, disks, diskettes, films, etc.

There should be backup copies of electronically generated working papers. The backup copies should not be stored with the original copies. Descriptive Heading. Each working paper shall be fully identified by a heading at the top center containing: A.

Subject matter of information presented specific activity audit procedure or other subdivision of the functional area to which the working paper pertains. Auditor's Name and Date. Each working paper shall contain the initials of the staff member preparing it and the date of preparation.

This information should be placed in the space provided in the upper right-hand corner of the standard working paper. These dates will correspond to the sign-off procedures used for the audit program. Source of Data. Source of information appearing on the working paper should be shown in the upper left corner of the working paper.

If information is supplied by operating personnel or results from your observation, show this in the working paper. If you prepare information from records on file, identify these records. Purpose and Scope of Audit Work Performed. The purpose of each audit working paper is to be specifically stated unless otherwise clearly evident from its title. Auditors Verification Procedures. The nature of verification work performed by the staff member must be disclosed for each working paper.

Mere copying of figures from the records is not, in itself, verification. The verification procedures performed must be. Colored tick marks serve this purpose well when adequately explained under the "legend". Auditor's Conclusions. Working papers must contain a conclusion with respect to each objective of the audit whether or not adverse conditions are disclosed.

The formulation of conclusions is one of the most important functions of the auditor. The conclusions are the basis for the recommendations. They must never be a product of a predisposed mind. All evaluations should be made with an attitude of professional skepticism.

They must spring from information contained in the auditor's working papers. Conclusions are trustworthy only if they are reasonable deductions from relevant information developed during the audit. They are strong only to the extent to which they are buttressed by supporting data.

Evidence of Review. Working papers must contain evidence of review by supervisory personnel. The reviewer's satisfaction with work performed and agreement with conclusions reached should be documented. The evidence of review can be documented by 1 initialing and dating each workpaper or 2 initialing and dating the audit binder that contains the workpapers. In addition, each reviewer shall prepare Audit Workpaper Review notes which will document any questions raised by the reviewer.

Ordinarily, the reviewer should not make any changes in the working papers. The review notes should be discussed between the reviewer and the auditor to answer the questions raised by the reviewer. Any corrections made as a result of this review should be noted on the workpaper.

The review notes can and should be a valuable tool in supervising and training our auditors. To avoid confusion and complications in filing, only one subject should be dealt with on a working paper. Index numbers are to be indicated on the lower center of the page. The index number should be placed on the outside of folded workpapers.

The papers should be indexed according to the Audit Workpaper Checklist Exhibit When numbering a given area consecutive numbers are to be used i.

Indexing audit fieldwork workpapers should contain the objective letter between the index number 20 and the workpaper number i. Working papers should leave no unanswered questions, open points, incomplete notes or other evidence of unfinished work.

Working papers should be legible and neat. Sloppy workpapers may lose their worth as documented evidence. The main objectives of auditing are also known as primary objectives of auditing. Investigating the internal system. Checking the authenticity and validity of transactions which is done. Examining arithmetical accuracy of books of accounts, casting, balancing etc. Settling the current value of assets and liabilities. Working papers are the property of the auditor , and some states have statutes that designate the auditor as the owner of the working papers.

The auditor's rights of ownership , however, are subject to ethical limitations relating to the confidential relationship with clients. To prepare workpapers, you want to use the following elements: A descriptive heading: It should include the client's name, the workpaper's purpose, and the date under examination. Indexing: Like a book, every workpaper has a unique page number showing its place in the audit file. Terms in this set 8 physical examination.

Audit notebook is a diary on which auditor scribble down all important inquiries to avoid the possibility of unquestioned material facts. Ownership of Audit working papers So they are his property.

Although, the client may claim them as a record of his business matters, the auditor cannot part with them as his conclusions are based on them and as they provide evidence of the audit work carried out according to the basic principles. Internal auditing is an independent, objective assurance and consulting activity designed to add value to and improve an organization's operations.

Professionals called internal auditors are employed by organizations to perform the internal auditing activity. Audit risk also referred to as residual risk refers to the risk that an auditor may issue an unqualified report due to the auditor's failure to detect material misstatement either due to error or fraud.

Audit evidence is evidence obtained by auditors during a financial audit and recorded in the audit working papers. Auditors need audit evidence to see if a company has the correct information considering their financial transactions so a C. Certified Public Accountant can confirm their financial statements. Stay up-to-date on accounting standards. Assess changes in activities. Learn from the past. Subscribe for NewsLetters. You may not alter or remove any trademark, copyright, logo or other notice from copies of the content.