ABC & Associates, Chartered Accountants, having been appointed as concurrent auditors of a commerical bank. Before formal commencement of the audit and field work, auditors have asked the branch management to schedul

Importance of Kick off Meeting: After the internal audit notification is received by the internal auditor, a kick-off meeting is generally organized by the internal auditor with the relevant function owners and their subordinates to discuss the audit objectives, audit scope (more detailed), audit schedule, audit process and methodology, audit team details, escalation routes on both sides, turn-around-time for provision of information or records, and initial data requirement is discussed and agreed. Usually, a presentation is made by the internal auditor covering all these aspects and inputs, from the auditees, are invited to the same. Exchange of views and clarifications from both sides enables better understanding of the expectations from each side and helps in avoiding debate about scope of audit and process to be followed for finalization of the internal audit report later. Further, it helps in improving the perception of the internal audit activity since auditees can understand it better. Process Walkthrough(s): Process walkthroughs are step-by-step demonstrations or explanations of a process or task conducted by the process or task owner in the presence of the internal auditor. Internal auditor can use process walkthroughs to understand the process flow and identify the design of the internal controls using one or two examples chosen by the auditee for such demonstration. It helps the internal auditor in understanding how the auditees are conducting their day-to-day work, engagement objectives, and identify the key controls or stage gates which ensure that the desired output of the process is achieved by the organization. While in case of mature control environments, the flow charts explaining the flow of information and key stage gates / key controls of the process are already documented, where such documentation may not be available to a level which is detailed enough, or self-explanatory to meet the purposes of an internal auditor. Organisation chart has to be updated and see if there are significant turnover in the key persons over a period of 5 years. In such cases, the internal auditors need to draw their own flow charts for complete understanding the process. A flow chart provides a visual sequence of the steps in a process, illustrates the relationship between parts, and identifies what the process does or should do. Flowcharts created in a variety of ways by internal auditors, from informal pencil drawings on scraps of paper to technically sophisticated computer graphics. Creation of flow charts by internal auditor based on process walkthroughs has following advantages: In the process of creating the flowchart, internal auditor can discover weakness in controls such as weak responsibility/accountability definitions, supervision by the wrong level of the organization, failure to segregate functions to avoid conflict of interest, and so on. A flowchart can provide an accurate description of process design, and later on when an internal auditor finds some exceptions to the process, it is easy to understand the risk or potential impact of that observation on the outcome of the process. In these days of ERP environment across many organisations, system flow charts are also a must.