Financial Audit & Internal Audit

MORNING SESSION: INTRODUCTION AND KEY CONCEPTS

• Overview of Financial Audit and Internal Audit
• Definitions, objectives, and scope of financial and internal audits.
• Key differences between financial and internal audits.
• Regulatory framework and standards (IFRS, GAAP, IIA standards).
• Role of audit in corporate governance and risk management.

ACTIVITY 1: Group Discussion: Participants identify the role of internal and financial audits in their organizations and discuss challenges.

CASE STUDY 1: Case Analysis: Explore a real-world audit failure (e.g., Enron or WorldCom) and analyze how the failure in both financial and internal audits led to corporate collapse.

AFTERNOON SESSION: RISK-BASED AUDITING APPROACH

• Risk Assessment in Audits
• Techniques for assessing audit risk and material misstatement risks.
• Designing audit procedures based on risk assessment.

ACTIVITY 2: Risk Mapping Exercise: Participants develop a risk map for a hypothetical company and identify high-risk areas that need auditing focus.

CASE STUDY 2: Risk-based Audit Case Study: Analyze how risk-based auditing led to early detection of fraud or irregularities in a large corporation.

MORNING SESSION: FINANCIAL AUDIT TECHNIQUES

• Audit Planning and Execution
• Planning an audit engagement: scope, timelines, and audit program development.
• Techniques for testing internal controls, substantive testing, and analytical procedures.

ACTIVITY 3: Audit Simulation: Participants are given financial records and asked to plan a sample audit, focusing on areas such as cash, inventory, or revenue.

CASE STUDY 3: Audit of a Large Corporation: A case involving complex financial transactions, including off-balance-sheet items or revenue recognition issues.

AFTERNOON SESSION: INTERNAL AUDIT TECHNIQUES

• Internal Control Testing and Process Audits
• Testing operational controls, compliance, and performance.
• Continuous auditing and data analytics in internal audits.

ACTIVITY 4: Internal Control Evaluation: Participants conduct an internal control review for a company’s purchasing or HR process, identifying weaknesses and proposing improvements.

CASE STUDY 4: Internal Audit Transformation: Analyze how a company revamped its internal audit department, using IT-based audit tools, and successfully implemented a continuous audit process

MORNING SESSION: REPORTING AND COMMUNICATING AUDIT FINDINGS

• Audit Reports and Recommendations
• Structure of an audit report: key elements and best practices.
• Communicating findings to management and the board.
• Follow-up on audit recommendations and corrective actions.

ACTIVITY 5: • Audit Report Writing: Participants review audit working papers and write a sample audit report, including key findings, recommendations, and risk mitigation strategies.

CASE STUDY 5: • Audit Reporting Case Study: Examine a case where improper reporting led to misunderstandings with the audit committee and discuss how to enhance communication.

AFTERNOON SESSION: FRAUD DETECTION AND PREVENTION

• Forensic Auditing and Fraud Risk Management
• Techniques for detecting financial statement fraud.
• Investigating fraud cases and implementing controls to prevent future frauds.

ACTIVITY 6: • Fraud Detection Workshop: Participants analyze sample financial records to identify red flags indicating potential fraud, and propose forensic audit techniques to investigate.

CASE STUDY 6: • Forensic Audit Case Study: Study a famous fraud investigation (e.g., Bernie Madoff Ponzi scheme) and discuss the internal audit’s role in uncovering fraud.

CLOSING SESSION: WRAP-UP AND KEY TAKEAWAYS

• Recap of Key Learnings
• Summarizing the critical points covered in financial and internal audit processes.
• Open discussion on the challenges and future trends in auditing (e.g., AI in audits).
• Final Q&A Session
• Post-Workshop Activity:
• Participants will complete an individual audit planning assignment and receive personalized feedback from the instructor.