When an engagement is selected from the Annual Audit Plan, Internal Audit

• interviews key individuals and obtains an understanding of how the system works.
• documents the system via flowcharts and narratives.
• evaluates the adequacy of controls in the process or system.
• tests existing controls.
• identifies control concerns, risks and alternative control improvement recommendations.
• discusses the audit findings with the auditee and reaches an agreement in principle to the audit issues.
• prepares a formal audit report noting findings and recommendations and sends to the auditee.
• receives audit report responses from the auditee and incorporates responses in the final report.
• issues the final report.
• performs a six month follow-up audit and issues a report.