9.4 Internal audit review reports and actions by management and those charged with governance

When the internal audit function conducts reviews and issues reports, it is important for management and those charged with governance to take appropriate actions based on the findings and recommendations. Here are the typical steps involved in the process:

1. Review of Internal Audit Reports: Management and those charged with governance review the internal audit reports, which summarize the findings, observations, and recommendations resulting from the internal audit work. The reports provide insights into the effectiveness of internal controls, areas of non-compliance, operational inefficiencies, and potential risks.
2. Assessment of Findings and Recommendations: Management and those charged with governance assess the findings and recommendations presented in the internal audit reports. They evaluate the significance of the issues identified, the potential impact on the organization, and the urgency of addressing them.
3. Action Plan Development: Based on the internal audit findings and recommendations, management and those charged with governance develop an action plan to address the identified issues. The action plan outlines the specific steps, responsibilities, and timelines for implementing the necessary corrective actions.
4. Implementation of Corrective Actions: Management and those charged with governance oversee the implementation of the corrective actions outlined in the action plan. This may involve allocating resources, updating policies and procedures, enhancing control activities, or providing additional training and guidance to employees.
5. Monitoring and Follow-up: Management and those charged with governance monitor the progress of the corrective actions and provide necessary oversight. They ensure that the actions are implemented effectively and that the desired outcomes are achieved. Regular follow-up is conducted to track the status of the actions, address any obstacles, and provide support as needed.
6. Reporting and Communication: Management and those charged with governance communicate the progress and results of the corrective actions to internal audit, stakeholders, and relevant parties as required. This helps demonstrate the commitment to addressing internal audit findings, ensuring transparency, and providing assurance that the identified issues are being appropriately resolved.
7. Continuous Improvement: Management and those charged with governance use the internal audit reports and the resulting actions as opportunities for continuous improvement. They analyze the root causes of the identified issues, explore ways to enhance processes and controls, and incorporate lessons learned into the organization’s ongoing operations.