Closing Meetings The primary purpose of an audit closing meeting is to present the audit findings and conclusions, ensure a clear understanding of the results, and agree on the timeframe for corrective actions. The meeting is conducted by the lead auditor
Lead auditor
Most publicly traded corporations typically have an internal auditing department, led by a Chief Audit Executive (“CAE”), with lead internal auditors managing small teams of internal auditors for one audit engagement. Lead auditor is a position between senior auditor and head of division.
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What is the purpose of the audit closing conference?
A purpose of the audit closing conference is to a. Inform members of the board of directors of audit results. b. Present the audit report to the chief executive officer. c. Obtain information to evaluate internal control.
Is documentation of closing conferences required by the standards?
Documentation of closing conferences is not specifically required by the Standards. Answer (c) is incorrect. Notes taken during the closing conference may lead to revised audit program, but that is not the primary use. Answer (d) is incorrect.
Which is not a primary objective of the exit Conference?
Reaching an agreement on the facts is an objective of the exit conference. Answer (c) is the correct answer. Identifying concerns for future audits is not a primary objective of the exit conference.
How do you conduct a closing meeting?
When conducting the closing meeting, speak with authority and listen with interest. Maintain good manners, watch your body language, and maintain control of the meeting. Keep a record of any issues that are raised during the meeting.
What is the purpose of closing meeting?
The primary purpose of an audit closing meeting is to present the audit findings and conclusions, ensure a clear understanding of the results, and agree on the timeframe for corrective actions. The meeting is conducted by the lead auditor.
What should be included in a closing meeting?
The Closing MeetingThe Opening remarks and thanks.The Attendee list.A Review of the Audit objective and scope.Reiterating the restrictions and limitations of the audit.Informing the Client on the good practices.A summary of the review findings.A list of problems identified and their descriptions.More items…•
What is exit conference?
Exit Conference means the conference held at the end of a survey, inspection or investigation, but prior to finalizing the same, between the department’s representatives who conducted the survey, inspection or investigation and the facility administration representative(s).
What are opening/closing meetings?
Opening and closing meetings offer the forum to do this. A well run and professional opening meeting sets the scene for the audit and, if done well, creates a great first impression. Likewise, a well run closing meeting draws the audit to a close in a professional and controlled manner.
How do you do a project closeout meeting?
The closing meeting agenda should include: 1) outstanding items 2) project performance against budget, schedule, and scope 3)lessons learned 4) other topics as needed. Once the project is closed, organize and store the project artifacts and deliverables in your organization’s project archive.
What is exit meeting in audit?
Exit Meeting is the meeting scheduled at the end of an audit between the auditors and the representative auditees. This is when a draft report of audit findings and observations are discussed and presented.
What is exit conference with COA?
The exit conference is the meeting at the end of an audit engagement where the auditors and client meet to discuss the findings of the audit and the recommendations in the report.
What is the purpose of opening meeting?
Purpose of an opening meeting An opening meeting is a face-to-face meeting that is generally held between the auditor (or auditor team), the auditee and their senior management. The opening meeting is a crucial point where an auditor can establish how an audit will be conducted in consultation with an auditee.
What is the purpose of meeting in audit?
The primary purpose of an audit opening meeting is to confirm the audit plan and prior arrangements. It is also an opportunity to introduce the audit team members and describe your audit approach.
What is closure audit?
Audit Closure (print ref: Part 3, Section 5.4) Once all the necessary Corrective Action has been checked by the Auditor and found to be satisfactory, the Audit can be formally “closed” and this will involve the following activities. Non-compliance Sign-off.
Question: V1C6-0001 During a preliminary survey, an auditor notes that several accounts payable vouchers for major suppliers show adjustments for duplicate payment of prior invoices. This would indicate Answers A: A need for additional testing to determine related controls and the current exposure to duplicate payments made to suppliers. B: An unrecorded liability for the amount of purchases that are not processed while awaiting supplier master file address maintenance. C: A lack of control in the receiving area that prevents timely notice to the accounts payable area that goods have been received and inspected. D: The existence of a sophisticated accounts payable system that correlates overpayments to open invoices and therefore requires no further audit concern.
Answer Explanations Answer (a) is the correct answer. This preliminary survey information should prompt the auditor to identify the magnitude of su…
Question: V1C6-0002 Which of the following best describes a preliminary survey? Answers A: A standardized questionnaire used to obtain an understanding of management objectives. B: A statistical sample of key employee attitudes, skills, and knowledge. C: A “walk-through” of the financial control system to identify risks and the controls that can address those risks. D: A process used to become familiar with activities and risks in order to identify areas for audit emphasis.
Answer Explanations Answer (a) is incorrect. This is only one means in fulfilling the objective of a preliminary survey. Answer (b) is incorrect. T…
Question: V1C6-0003 The following information is available from the financial statements of a manufacturing division. The director of internal auditing is reviewing the data to identify potential risks as a basis for planning the audit. The division has not been audited by the internal auditing department in the past three years. The division conducts most of its business autonomously. The division has historically relied on one major product. However, that product is aging and will soon lose its patent protection. The division had a large increase in sales in the previous year (20X2). Which of the following hypotheses would the data support regarding the potential cause of the sales increase? The division Answers Ratio Current year Previous year Prior year Industry average Current ratio 1.94 1.89 2.28 2.13 Quick ratio 0.66 0.88 1.22 1.4 Days sales in receivables 112 93 72 69 Days sales in inventory 148 167 92 73 Cost of goods sold as % of sales 0.375 0.402 0.412 0.445 Sales/tangible assets 2.89 2.58 2.53 3.01 Sales/total assets 1.33 1.31 2.53 2.78 Sales growth 0.03 0.16 0.02 0.045 Net income (thousands) ($7,600) $985 ($1,200) $4,500 A: Reduced its selling price for most of its product line. B: Acquired another company and accounted for the purchase as a purchase transaction, not a pooling. C: Liquidated a substantial part of its older inventory. D: Sold off most of its intangible assets, realizing a profit on the sale.
Answer Explanations Answer (a) is incorrect. There is no evidence that the company reduced its sales prices. If anything, it may have raised sales…
Question: V1C6-0004 The following information is available from the financial statements of a manufacturing division. The director of internal auditing is reviewing the data to identify potential risks as a basis for planning the audit. The division has not been audited by the internal auditing department in the past three years. The division conducts most of its business autonomously. The division has historically relied on one major product. However, that product is aging and will soon lose its patent protection. Which of the following would not explain the decrease in cost of goods sold as a percentage of sales ratio? The division Answers A: Liquidated inventory in conjunction with a plan to bring its current ratio more in line with the industry average. B: Increased the selling price of its products by selling to less creditworthy customers. C: Recorded subsequent year’s sales in the current year, but adjusted inventory to actual goods on hand at year-end. D: Is incorrectly capitalizing certain production costs. Ratio Current year Previous year Prior year Industry average Current ratio 1.94 1.89 2.28 2.13 Quick ratio 0.66 0.88 1.22 1.4 Days sales in receivables 112 93 72 69 Days sales in inventory 148 167 92 73 Cost of goods sold as % of sales 0.375 0.402 0.412 0.445 Sales/tangible assets 2.89 2.58 2.53 3.01 Sales/total assets 1.33 1.31 2.53 2.78 Sales growth 0.03 0.16 0.02 0.045 Net income (thousands) ($7,600) $985 ($1,200) $4,500
Answer Explanations Answer (a) is the correct answer. This is not a potential explanation because (1) there has been an increase in inventory, and…
Question: V1C6-0005 The following information is available from the financial statements of a manufacturing division. The director of internal auditing is reviewing the data to identify potential risks as a basis for planning the audit. The division has not been audited by the internal auditing department in the past three years. The division conducts most of its business autonomously. The division has historically relied on one major product. However, that product is aging and will soon lose its patent protection. Ratio Current year Previous year Prior year Industry average Current ratio 1.94 1.89 2.28 2.13 Quick ratio 0.66 0.88 1.22 1.4 Days sales in receivables 112 93 72 69 Days sales in inventory 148 167 92 73 Cost of goods sold as % of sales 0.375 0.402 0.412 0.44 5Sales/tangible assets 2.89 2.58 2.53 3.01 Sales/total assets 1.33 1.31 2.53 2.78 Sales growth 0.03 0.16 0.02 0.045 Net income (thousands) ($7,600) $985 ($1,200) $4,500 The current ratio increased during the past year while the quick ratio decreased. Which of the following explanations would best explain the reason that the current ratio increased while the quick ration decreased? Answers A: A substantial increase in accounts payable that affects the current ratio but not the quick ratio. B: The significant buildup of inventory. C: The substantial increase in accounts receivable. D: The large increase in the amount of intangible assets that affects the current ratio but not the quick ratio.
Answer Explanations Answer (a) is incorrect. It is likely that accounts payable has increased and the increase would affect the quick ratio more so…
Question: V1C6-0006 Writing an audit program occurs at which stage of the audit process? Answers A: During the planning stage. B: Subsequent to testing internal controls to determine whether to rely on the controls or audit around them. C: As the audit is performed. D: At the end of each audit, the standard audit program should be revised for the next audit to ensure coverage of noted problem areas.
Answer Explanations Answer (a) is the correct answer. Planning should include writing the audit program. Answer (b) is incorrect. The external audi…
Question: V1C6-0007 In planning an audit, an on-site survey could assist with all of the following except: Answers A: Obtaining auditee comments and suggestions on control problems. B: Obtaining preliminary information on internal controls. C: Identifying areas for audit emphasis. D: Evaluating the effectiveness of the system of internal controls.
Answer Explanations Answer (a) is incorrect. Survey would assist in obtaining auditee comments. Answer (b) is incorrect. Survey would assist in obt…
Question: V1C6-0008 Fieldwork has been defined as “a systematic process of objectively gathering evidence about an entity’s operations, evaluating it, and determining if those operations meet acceptable standards.” Which of the following is not part of the work performed during fieldwork? Answers A: Expanding or altering audit procedures if circumstances warrant. B: Applying the audit program to accomplish audit objectives. C: Creating working papers that document the audit. D: Developing a written audit program.
Answer Explanations Answer (a) is incorrect. This is a requirement of the standards that relates to fieldwork. Answer (b) is incorrect. This statem…
Question: V1C6-0009 The IIA Standards require auditors to discuss conclusions and recommendations at appropriate levels of management before issuing final written reports. Auditors usually accomplish this by conducting exit conferences. Which of the following best describes the purpose of exit conferences? Answers A: To allow auditees to get started implementing recommendations as soon as possible. B: To allow auditors to explain complicated findings before a written report is issued. C: To allow auditors to “sell” findings and recommendations to management. D: To ensure that there have been no misunderstandings or misinterpretations of facts.
Answer Explanations Answer (a) is incorrect. This is a secondary benefit of exit conferences. Answer (b) is incorrect. Complicated findings must be…
What is the purpose of an exit conference?
An exit conference has three main purposes: to confirm accuracy, to resolve any issues, and to generate commitment. If there are any misunderstandings that have impacted the result of the audit, it is critical to identify them before the audit report is issued to the final distribution.
How to derail an exit conference?
One surefire way to derail an exit conference is to have a client surprised and defensive in front of their managers. When you share the audit report with your client before the exit conference, you will likely sort out some issues that can be verbal findings instead of audit findings.
What should be included in an audit exit conference?
The exit conference should include the auditors that conducted the engagement, the clients involved, and at least one level of management above the client. If not managed well, this can create an awkward dynamic – it can feel like the auditors are ‘telling on’ the client, with the client’s boss in the room. This is the reason it is so critical to keep the client aware of how the audit is progressing and the recommendations that will be made. The client can then share that with their manager, so nothing in the exit conference (or report) comes as a surprise.
What is the primary objective of an audit engagement?
Finally, the primary objective of an audit engagement is not to produce a final report; the primary objective of any audit should be to instigate positive change in the organization. This is only done if management is committed to addressing the findings and recommendations in the audit report. The exit conference is an opportunity for …
