Flowcharts in Internal Auditing

Flowcharts in Internal Auditing

Financial and Operational audits are a regular feature of modern business practices. Whilst Internal Auditing techniques today are quite different from yesteryears, the core reason for our existence continue to be the same i.e. provide assurance that effective controls, governance and risk management processes are in place to safeguard the interest of our shareholders.

We may have moved away from the traditional auditing techniques, courtesy “Computer Assisted Auditing Techniques” (CAATs), but we would still not achieve the desired outcome if the we fail to understand the business processes and spread these over a well-articulated flowchart. A flowchart is a type of diagram that illustrates workflows or different process from beginning to end and help attain the objectives of an internal auditing exercise. The flowchart symbols create visual clarity, thus allowing the viewers to follow through the stages of a process easier and without experiencing complications. Yes, flowcharting is made quite simple using some of the modern day tools such as “Visio” but the science of reading, listening, comprehending and above all communication with the process owner remain a “Key” to a good flowchart.

A well prepared flowchart would help in identifying the choke points in a business processes, the points of leakage or wastage of resources, highlight the important decision points in a business hierarchy, track the outcomes that flow from such avenues, and evaluate the efficacy of creating alternative points of decision. This is therefore not only useful for a specific audit activity but business managers and other stakeholders can also use these diagrams to track the flow of actions that drive a business. These flowcharts also enable business enterprises to create scope for process improvement and thus improve business outcomes. With ever increasing demand of Internal Auditors’ assistance in fraud prevention, flowcharts could also be designed specifically to identify the scope of fraud inside a business process.

So next time you begin with your assignment, remember to have a “FLOWCHART” for each process……. Happy Flowcharting!!

Author: Jasim Khawaja FCCA, ACA, CIA, CFE, BFP, UAECA

References:

Using Flowcharts for Internal Auditing by Emily Newman | 24 April 2018

Question on Quora Answered by Christo Bahchevanov | 23 April 2018

 


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