Before we start a step-by-step on how to write an audit program, we would like to start with the overview of internal audit along with some sort of definition and more importantly, what will you get after reading this article.

Basically, an internal audit is the independence department working and report directly to the audit committee.

The purpose of setting this department is mainly because of the risk management if the entity. And to ensure that this department could really add the benefit to the company, it has to properly manage and control.

Good audit planning and audit program are part of the good quality of internal audit department, and it this article, we will guide you on how to develop internal audit procedures that add value to works and audit quality.

Okay, before we start the internal audit program, let me explain what is the internal audit objective first.


There are many different things if we compare internal audit to external audit; however, the main objective is almost the same.

It is established to ensure that the main business operating system, internal control, financial reporting, the internal policy as well as regulation, are running effectively, efficiently, accurately and fully comply.

The other main importance is that the internal audit department seeking to provide assurance to make sure that all financial information that runs to the Board of Directors is true and fair. Yet, an Internal audit does not issue the opinion as an external audit does.

Well, that all for the internal audit objective, now let see that is an internal audit program first before we start how to prepare.

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Audit Program:

Now let start with writing,

To make sure that all of these objectives are met, proper internal audit planning needs to be done with correct procedures and follow the best practice standard.

After annual or semi-annual internal audit planning is done properly, the Internal Audit Department should prepare an internal audit program that could detect the risk that internal audit identified during their internal audit planning.

In some companies, to avoid such difficulty, the companies decided to purchases the self package software which already has good internal audit procedures which are properly linked from internal audit planning.

As the planning requires the internal audit to access and evaluate the risk, then internal audit procedures are already done for them.

They might just need to perform some specific tailor to make sure all the procedures are compatible with the companies or the internal control procedure that the company is operating.

However, some company has only a small budget for the internal audit department; therefore, purchasing internal audit software which already has internal audit program might be costly. In this case, the internal audit department needs to prepare internal audit procedures for themselves.

Preparing the internal audit procedures might be challenging if it is your first time even you have experience in internal audit or external auditing since those procedures might be all ready for you.

The following are some basic concepts that you need to do when preparing internal audit procedures for your internal audit department.

Writing Audit Program:

From internal audit planning, you will know what areas that you will perform your internal audit work for the planning period. Some internal audit planning has very specific areas however sometimes the cycles are very subjective based on the nature of business.

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For the specific cycles, it is not hard for you to tailor audit procedures. The first step is taking those cycles like cash and bank, inventories, or purchasing.

As an internal audit is a bit specific and it mainly focuses on internal control, economic review, then you have to try to understand those areas in detail and documents them properly.

Sometimes, the internal audit department has another procedure and template used to documents the internal control and nature of each cycle.

After well understanding the internal control and nature of the cycle you want to write the internal audit procedures for, then it the time to do it.

You might need Ms. Word or Excel to prepare your internal audit procedures. There are many factors and assertions that might want to confirm on the cycles you are going to test; however, please always look to the risks that you identified during the internal audit planning.

Sometimes, the internal audit program is asking to do something too much on something that is low risk and ask to do something less on the high-risk areas.

The best way to write internal audit procedures is to bench-marking from Understanding Internal control and procedure as well as the nature of those cycles. Sometimes, internal audit procedures could be write based on the risks that you identified a link with assertions.