Preliminary Survey

Lectured by Dr. Siriluck Sutthachai

Accounting Department
Faculty of Management Science
Khon Kaen University
Khon Kaen, Thailand
Preliminary Survey
Objectives of preliminary
survey
Getting familiar with the
departments
Understanding business
environment
Knowing management styles
Initially testing the reliability of
work flow
Preliminary Survey
Why we have to do the preliminary survey
Scope audit program
Gaining background of nature of work that is
going to be audited
Indicate strengths and weaknesses of business
activities audited
Gather information for audit planning
Preliminary Survey
Information sources
o Permanent files
o Current files
o Company policies,
pronouncement and
regulations
o Financial reports
o Performance reports
o Organization charts
o Observation
o Work manual
o Budget and key
performance indicators
o Interviews and exchange
opinions
o Meeting minutes
Preliminary Survey
Initial study
Documenting
Meeting
Gathering information
Observing
Flowcharting
Reporting
Initial Study
The permanent file gives an overview of what the
auditors can expect.
Prior working papers can show how other auditors
approached the assignment.
Existing literature on the subject provide auditors an
insight information about the subject to be audited.
Organisation charts and statements of authority and
responsibilities show the authorities of each position.
Documenting
Reminder list helps to plan what to do for
each step of auditing.
Table of Contents will help auditors to
discipline their job.
Cost reductions list helps to plan ahead some
processes that can be reduced in order to
decrease costs for a company.
Documenting
Records of impressions check list will help
to assess people working in the audited
processes.
Questionnaires can be produced after the
initial study. This will help auditors to
discuss with managers at the first meeting
before get into more details for each audited
process.
Meeting
Arrangementsthe time and place should be
arranged.
Interviews
Preparinglearn about the auditee before meeting.
Schedulingphone the interviewee for the interviews.
Openningtell the interview purpose and how the results
will be used.
Conductingcommunication skills are needed.
Closingstop the interview when appropriate.
Recordingwrite or record the interview for later review.
Gathering Information
Information to be gathered should be involved:
Planning e.g. copies of policies, directives and
procedures.
Organizing e.g. organization charts and position
description.
Directing e.g. operating instruction to employees and
determine authority and responsibility
Controlling e.g. written standards and performance
guides, review system and work flow.
General e.g. unbudgeting? Cumbersome
organisational structure.
Observing
Observation and inquiry can lead to
Determine objectives, goals, and standards.
Assess controls to achieve these aims.
Evaluate risk.
Identify controls to minimize risk.
Make statistical risk assessments.
Assess management style.
Flowcharting
Flowchart shows how
the processes work.
It should be
standardised in the
auditing department.
It helps to indicate
critical point that may
need to be addressed.
Reporting
Survey report should
contain both positive and
negative findings.
The report will help in
preparing audit program.
And auditors should suggest
audit steps and the reason
for them.
Reporting
Survey reports should be
produced and reported to:
Head of internal auditing
department to examine
important issues and
problem areas and make a
decision if further
investigation is needed.
Reporting
Survey reports should be
produced and reported to:
Management informally
in order to report some
recommendations that
can be addressed
immediately and thus no
further auditing.
Case Study
Management Science Library