This sample audit committee quarterly report includes a summary of internal audit activities completed and in progress, an internal audit/SOX timeline, a walkthrough/interim testing timeline, and a goals update.
Internal audit activities include: Established the internal audit budget and obtained audit committee approval for the internal audit plan; met with management and external auditors for a risk scoping exercise; began a ‘‘continuous testing’’ strategy; substantially completed 12 walkthroughs for all key financial processes, including a new process: HR/payroll; began testing the operating effectiveness of key controls in conjunction with walkthroughs; completed interim testing of controls; and began non-SOX internal audit project focused on the financial statement close process.
In addition, the report provides a status update on the goals internal audit developed to continually improve its relationship with the audit committee:
- Continue to increase dialogue and depth of discussions with the audit committee beyond the regular scheduled meetings.
- Organize procedures to consider late-year transactions and proper application of internal controls.
- Provide company-focused insights into technical areas and contribute to the board’s risk oversight process.
- Suggest internal audit procedures beyond SOX-focused on organizational improvement and areas crucial to corporate success.
- Continue to deepen interactions with external auditor to encourage reliance on and alignment with areas of inquiry.
- Provide ongoing clarity with regard to budgets, schedules and impact of decisions related to project approach.
- Continue to strive for efficiency and innovation while improving the internal audit workflow and offering process improvement ideas when possible to the underlying business.