Instructions
Audit Procedures – 4 to 6 pages
Imagine that the policy and procedures you developed for Part I and Part II have been adopted and implemented in your company/agency/firm.
Draft audit procedures to test the efficacy of your procedures.
Draft audit follow up recommendations (See below for details.)
Please read the guidance below regarding drafting audit procedures.
Please read the required readings below.
Drafting Audit Procedures
The purpose of audit procedures is to ensure that the company’s or agency’s procedures are not only ensuring compliance with the applicable laws and regulations, but also are assisting the employees to work efficiently. Thus, the audit procedures should include the questions you would want to ask to make sure the procedures are working, and also include questions you would want to know from a risk perspective, such as whether employees are actually following the procedures and doing the tasks that the procedures require. The audit procedures can therefore be a great tool for obtaining employee feedback regarding ways the company or firm can make the procedures better. Although they may be a bit too comprehensive, the CFPB’s Examination Manuel and the questions it includes for its field personnel to ask regarding a company’s procedures are a good example of the types of questions and verifications that your audit procedures should include. It is also a good example of the form for your audit questions.
Audit Procedures Format
In drafting your Audit procedures, you may wish to include a draft of your written procedures so that I know what information your audit procedures are designed to test, but it may not be necessary to include the procedures if your audit forms contain sufficient detail. You may use your judgment to determine which approach is best for your particular audit procedures. Please refer to the required readings for examples of audit formats and other resources.
Audit Follow-Up Recommendations
Once you develop your list of questions and then apply them to your applicable procedures, you often will notice areas of weakness or “holes” in your procedures that need to be addressed. Thus, the audit procedures assist the company or agency in its ongoing self-evaluation. It is also critical that the company or agency address the weaknesses illuminated by the audit so as to avoid an increased level of risk. If a company is aware of an issue and doesn’t correct it, the company’s knowledge may be used against it to seek a willfulness finding, if the regulator brings an enforcement action, or a private litigant brings suit.
Please provide at least two audit-follow-up recommendations for your audited policies and procedures. Note: No policies and procedures are ever perfect, so there is always room for improvement.
Required Readings
The CFPB’s Examination Procedures for the Equal Credit Opportunity Act. The format used in the Examination Procedures is a useful one, especially the checklist format. the CFPB examination manual referenced in the guidance.
Privacy Audit Checklist
Audit Procedures and Internal Control Questionnaires Hospital/Facility Compliance Audit Program
Volusia County Internal Audit Report – Purchasing Cards and Vendor Management