Three Common Audit Mistakes You Need to Avoid

Audit is a crucial part in the attempt of any organization to improve its processes, eliminate risks, get rid of unnecessary costs, and optimize products and/or service lines. However, conducting an internal audit is not as easy as it seems. Audit professionals must have sufficient understanding of the organization’s structure, the goals that they want to achieve, and the different processes that form part of the organization’s day-to-day processes.

While audit professionals can carry out these tasks seamlessly, mistakes can happen even to the most seasoned auditors. These can all have varying impacts, with some errors resulting in irreparable damages to the firm’s reputation. Fortunately, some are easier to avoid.

Here are some common audit mistakes you should keep in mind.

1. Routine and Incoherent Reporting

At the end of the audit process, auditors must submit a report containing the important details and the outcome of the audit. Just like the audit itself, the report follows a certain standard, including a format and an outline, depending on the nature of the audit.

Following such a demanding format often restricts auditors, resulting in monotonous and repetitive reporting. Reports like these are often burdensome for their clients to read since they read the same reports with the same outline time and time again. Gӧkhan Yilmaz, President of the Association of Certified Fraud Examiners (ACFE) in Turkey, suggests that auditors must update and redesign their report formats to prevent reader’s fatigue on the part of their clients. He also recommends the use of visuals in order to keep the reader’s attention on the report.

2. Miscommunication with Audit Clients

From the start of the process, auditors should keep in mind that the audit is being done to help the company’s management achieve their goals. However, even after a tedious audit planning, things can still get out of hand. The audit committee convened by the company might lack oversight and may not be supportive of audit activities. On the other hand, audit reports can result in inadequate inputs on how the company can optimize its processes and get more results efficiently.

Also, it is important to maintain clear communication with the audit committee all throughout the process. Proper communication will help you work on the audit efficiently and help you understand your client better. This will eventually reflect on how well your reports will be written and how useful the contents are.

3. Lack of Investment in Training

Audit is an ever-evolving industry. It is of utmost importance for auditors and their firms to maintain their qualifications and to keep their knowledge about the latest software and techniques in the industry updated. Investing in the proper training of your people will help you ensure the quality of their work and that they meet the widely accepted audit standards.

Failure to do so may result to a lasting damage to your firm’s reputation. Take for example one of the recent events that unfolded in the United Kingdom. The Financial Reporting Council has found that the work of one of the Big 4 firms in the country has shown “unacceptable deterioration”. The firm has now committed to taking steps in improving their audit quality.

Keeping yourself aware of these audit mistakes is the first step towards becoming a much better audit professional. Remember that mastering your craft will require more than just avoiding these mistakes, you will also have to learn along the way and continue updating yourself through relevant training.

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