In internal auditing, auditors will encounter people in the audited unit who object to the characterization of issues in the audit report, the description of issues, or even the issues themselves. One of the reasons for the objections raised by the audited unit is that the audit basis is inaccurate, or the audit basis is insufficient.
First of all, let's look at the internal audit to use the audit basis are what?
One is the national laws and regulations. National laws and regulations apply a wide range. For example, the Accounting Law is easily cited in the financial audit. However, the state's laws and regulations are extremely serious, once cited by the auditor in the audit issues, the audited unit will generally feel more sensitive.
The second is the industry's regulations, guidance and so on. Each industry will introduce some regulations, guidance to regulate the business behavior of business organizations in the industry. Business organizations in the actual operation, will inevitably touch the industry prohibited business practices, this time, the internal auditor to point out. Although the audited unit will say, the internal audit department and the business department are also the same organization, the audited unit done in violation of industry regulations is also affected by the market environment, but also to survive, but the internal auditors should stand in the overall interests of the organization, for the organization to avoid the risk of external regulation. Regulated business is not a brake that hinders the development of the organization.
Thirdly, the rules and regulations set by the organization. The more mature the business organization, the more sound its rules and regulations. The more robust the rules and regulations, the easier it is for the auditor to find a basis for an audit.
Fourth is the principle of internal control. There are still some laws, regulations, rules and systems are not explicitly stated, but the violation of the principle of internal control of economic matters, the auditor to analyze, judgment, the matters with significant risk revealed.
So, how do auditors use the audit basis?
First, familiarize yourself with the laws, regulations, rules and systems involved in the audit basis. Sometimes, auditors clearly feel that an economic behavior is a problem, but is unable to find the corresponding audit basis, which is not familiar enough with the regulations, systems and so on.
Two, can be analyzed to view the laws, regulations, rules, systems and so on. The so-called analysis, that is, auditors in-depth understanding of laws, regulations, rules, systems, etc., on the basis of analysis and deconstruction, can be more rigorous and economic behavior corresponds to.
Thirdly, the ability to look at the laws, regulations, rules, systems, etc. dialectically. In particular, a series of rules and regulations formulated by the enterprise organization, which may not be completely reasonable or in line with the actual situation. Auditors cited in the audit basis and pointed out the audit problem, to consider the actual operating conditions of the audited unit and how to rectify the problem.
Fourth, the development of laws, regulations, rules, systems, etc.. Under the market economy, the external factors affecting business organizations change rapidly. Business organizations are also constantly changing through organizational innovation, product innovation, business innovation, etc. to adapt to market changes. Many laws, regulations, rules, systems, etc. have been formulated many years ago, and whether they are in line with the current market environment, the auditor should also take a developmental perspective.
Auditors, when communicating with the audited unit, do not move directly to the statutes and regulations to point out the existence of the problem, as the power sector, but rather the basis of the audit and the audit found that the problem is organically combined, pointing out the risk of the problem, the impact of the problem.
In any case, the correct use of the audit basis will increase the authority and professionalism of the internal audit, and more effectively persuade the audited unit.